As filed with the United States Securities and Exchange Commission on October 5, 2020

 

Registration No. 333-245057

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

 

 

Amendment No. 1
To

FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933

 

 

 

TENZING ACQUISITION CORP.

(Exact name of registrant as specified in its charter)

 

The British Virgin Islands   6770   N/A
(State or Other Jurisdiction of
Incorporation or Organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer
Identification No.)

 

250 West 55th Street, Suite 13D 

New York, New York 10019
(212) 710-5220 

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

 

 

Rahul Nayar
Chief Executive Officer
250 W. 55th Street, Suite 13D 

New York, New York 10019
(212) 710-5220 

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

 

 

Copies to:

 

Barry I. Grossman, Esq.
Tamar Donikyan, Esq.

Wei Wang, Esq.
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, NY 10105
(212) 370-1300

 

Steven M. Skolnick, Esq.

Valeska Pederson Hintz, Esq.

Lowenstein Sandler LLP

1251 Avenue of the Americas

New York, NY 10020

(212) 262-6700

 

Laxminarayan Bhat

Reviva Pharmaceuticals, Inc.

19925 Stevens Creek Blvd.,

Suite 100

Cupertino, CA 95014

(408) 501-8881

 

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after (i) this registration statement is declared effective and (ii) upon completion of the applicable transactions described in the enclosed proxy statement/prospectus.

 

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: ¨

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ¨

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

  

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

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ¨

 

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

 

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

 

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

 

 

CALCULATION OF REGISTRATION FEE

 

Title of each class of securities to be registered   Amount to be
Registered
  Proposed
Maximum
Offering
Price Per
Share
  Proposed
Maximum
Aggregate
Offering
Price
  Amount of
Registration Fee(8)
Common stock(1)(2)(3)   10,941,934   $ 10.725 ​(4)   $ 117,352,242.15   $ 15,232.32  
Warrants(6)   6,683,813       -     -     -  
Common stock underlying the warrants(1)(2)(7)   6,683,813     10.725       71,683,894.43     9,304.57  
Total               $ 189,036,136.58   $ 24,536.89

 

____________

 

(1)Prior to the completion of the business combination described herein, the registrant, a British Virgin Islands business company (the “Registrant”), intends to discontinue as a company incorporated in the British Virgin Islands with limited liability under the BVI Business Companies Act, 2004 and continue as a corporation under Section 388 of the Delaware General Corporation Law (the “Domestication”), pursuant to which the registrant’s jurisdiction of incorporation will be transferred by way of continuation from the British Virgin Islands to the State of Delaware and the name of the registrant will be changed to “Reviva Pharmaceuticals Holdings, Inc.”

 

(2)Pursuant to Rule 416(a), there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from share splits, share dividends or similar transactions.

 

(3)The number of shares of common stock represents the sum of (i) the number of ordinary shares issued by the Registrant in private placement transactions in connection with its initial public offering (358,813) (ii) the maximum number of shares of common stock the Registrant estimates will be issued in connection with the business combination (5,807,381) (iii) number of ordinary shares initially purchased by the Registrant’s sponsor in a private placement prior to its initial public offering (1,581,250) and (iv) number of ordinary shares issued by the Registrant in its initial public offering registered on Form S-1, as amended (SEC File No. 333-226263), currently outstanding, which, as a result of the Domestication, will automatically be converted by operation of law into shares of common stock (3,194,490).

 

(4)Estimated solely for the purpose of calculating the registration fee, based on the average of the high and low prices of the ordinary shares on The Nasdaq Capital Market on August 11, 2020 in accordance with Rule 457(f)(1) and Rule 457(f)(3).

 

(6)Represents the sum of (i) the number of warrants issued by the Registrant in its initial public offering registered on Form S-1 (SEC File No. 333-226263) (6,325,000), and the number of warrants issued in private placement transactions (358,813), which, as a result of the Domestication, will become warrants to acquire the same number of shares of the Company at the same price and on the same terms.

 

(7)Represents the number of shares of common stock issuable upon exercise of warrants subsequent to the completion of the business combination.
  
(8) Previously paid.

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the SEC, acting pursuant to said section 8(a), may determine.

 

As used in this Registration Statement, the term “Registrant” refers to the Registrant (a British Virgin Islands business company) prior to the Domestication and to the Company (a Delaware corporation) following the Domestication.

   

 

 

 

 

The information in this proxy statement/prospectus is not complete and may be changed. Tenzing Acquisition Corp. may not issue the securities offered by this proxy statement/prospectus until the registration statement filed with the Securities and Exchange Commission, of which this proxy statement/prospectus is a part, is declared effective. This proxy statement/prospectus does not constitute an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale of these securities is not permitted.

 

PRELIMINARY — SUBJECT TO COMPLETION, DATED OCTOBER 5, 2020

 

To the Shareholders of Tenzing Acquisition Corp.:

 

On behalf of the board of directors of Tenzing Acquisition Corp. (“Tenzing”), we are pleased to enclose the proxy statement/prospectus relating to the proposed merger (the “Business Combination”) of a wholly owned subsidiary of Tenzing with and into Reviva Pharmaceuticals, Inc. (“Reviva”), pursuant to an Agreement and Plan of Merger dated effective as of July 20, 2020 (as may be further amended or supplemented from time to time, the “Merger Agreement”) among Tenzing, Reviva and certain other parties. It is proposed that prior to the closing of the Business Combination (the “Closing”), Tenzing will domesticate by changing its domicile from the British Virgin Islands to Delaware (the “Domestication”) and will change its name to “Reviva Pharmaceutical Holdings, Inc.” Reviva Pharmaceutical Holdings, Inc. and Tenzing, following the Business Combination, are both referred to herein as the “Company.”

 

In connection with the Business Combination and the other matters described herein, you are cordially invited to attend the extraordinary general meeting of shareholders (the “Shareholders Meeting”) of Tenzing, to be held at 9:00 a.m. Eastern Time, on [●], 2020 at the offices of Ellenoff Grossman & Schole LLP, at 1345 Avenue of the Americas, 11th Floor, New York, New York 10105. Only shareholders who held ordinary shares of Tenzing at the close of business on [●], 2020 will be entitled to attend and vote at the Shareholders Meeting and at any adjournments and postponements thereof.

 

Tenzing is a blank check company incorporated on March 20, 2018 as a British Virgin Islands business company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Tenzing’s units, ordinary shares and warrants are traded on The Nasdaq Stock Market (“Nasdaq”) under the symbols “TZACU”, “TZAC” and “TZACW”, respectively. On October 1, 2020, the closing sale prices of Tenzing’s units, ordinary shares and warrants were $10.44, $10.75 and $0.48, respectively. At the closing of the Business Combination, the units will separate into shares of common stock and warrants and the units will no longer trade on Nasdaq. Tenzing has applied for the listing of the common stock and warrants of the Company on Nasdaq following the completion of the Business Combination under the symbols “RVPH” and “RVPHW,” respectively.

 

At the Shareholders Meeting, Tenzing’s shareholders will be asked to vote on the following proposals, as more fully described in the accompanying proxy statement/prospectus: (i) the Domestication Proposal, (ii) the Business Combination Proposal, (iii) the 2020 Equity Incentive Plan Proposal, (iv) the Charter Amendment Proposals, (v) the Director Election Proposal, (vi) the Working Capital Loan Conversion Proposal, and (vii) the Adjournment Proposal, if presented (collectively, the “Proposals”).

 

Tenzing’s board of directors unanimously recommends that Tenzing’s shareholders vote “FOR” each of the Proposals to be presented to them.

 

The obligations of Tenzing and Reviva to complete the Business Combination are subject to a number of conditions set forth in the Merger Agreement and are summarized in the accompanying proxy statement/prospectus. More information about Tenzing and Reviva, the Shareholders Meeting and the transactions contemplated by the Merger Agreement, is contained in the accompanying proxy statement/prospectus. You are encouraged to read the accompanying proxy statement/prospectus in its entirety, including the section entitled “Risk Factors” beginning on page 37.

  

ii 

 

 

Your vote is very important.  As a condition to the completion of the Business Combination, an affirmative vote of holders of a majority of the votes of the ordinary shares of Tenzing entitled to vote on the Proposals, who are present and vote at the Shareholders Meeting is required with respect to the Proposals. 

 

On behalf of the Board, I thank you for your support and we look forward to the successful consummation of the Business Combination.

 

Very truly yours,

   
     

Rahul Nayar

Chief Executive Officer

Tenzing Acquisition Corp.

   

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under the accompanying proxy statement/prospectus or determined that the accompanying proxy statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

 

The accompanying proxy statement/prospectus is dated         , 2020 and is first being mailed to the shareholders of Tenzing Acquisition Corp. on or about         , 2020.

 

iii 

 

 

TENZING ACQUISITION CORP. 

250 W. 55th Street, Suite 13D 

New York, New York 10019

 

NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON [●], 2020

 

TO THE SHAREHOLDERS OF TENZING ACQUISITION CORP.:

 

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of shareholders (the “Shareholders Meeting”) of Tenzing Acquisition Corp., a British Virgin Islands business company (“Tenzing”), will be held at 9:00 a.m. Eastern Time, on [●], 2020 at the offices of Ellenoff Grossman & Schole LLP, at 1345 Avenue of the Americas, 11th  Floor, New York, New York 10105. You are cordially invited to attend the Shareholders Meeting, which will be held for the following purposes:

 

(1) The Domestication Proposal — To consider and vote upon a proposal to (a) change the domicile of Tenzing by way of its continuation out of the British Virgin Islands, as a business company incorporated under the laws of the British Virgin Islands, and into Delaware to become a corporation incorporated under the laws of the State of Delaware (the “Domestication”) pursuant to Section 184(1) of the BVI Business Companies Act of 2004, or the BVI Companies Act and the applicable provisions of the Delaware General Corporation Law, as amended, respectively; (b) in connection therewith to adopt upon the Domestication taking effect, the certificate of incorporation and bylaws appended to this proxy statement as attached hereto as Annex A (the “Interim Charter”), in place of Tenzing’s memorandum and articles of association (the “Current Charter”) currently registered by the Registrar of Corporate Affairs in the British Virgin Islands and which will remove or amend those provisions of Tenzing’s Current Charter that terminate or otherwise cease to be applicable as a result of the domestication and provide for a majority of the stockholders to act by written consent; (c) filing a notice of continuation out of the British Virgin Islands with the British Virgin Islands Registrar of Corporate Affairs under Section 184 of the BVI Companies Act; and (d) file the Interim Charter with the Secretary of State of Delaware, under which we will be domesticated from the British Virgin Islands and continue as a Delaware corporation. We refer to this proposal as the “Domestication Proposal.”

 

(2)The Business Combination Proposal — To consider and vote upon a proposal to approve the Agreement and Plan of Merger dated effective as of July 20, 2020 (as amended or supplemented from time to time, the “Merger Agreement”) by and among Tenzing, Tenzing Merger Subsidiary Inc., a Delaware corporation and a wholly-owned subsidiary of Tenzing (“Merger Sub”), Tenzing LLC, solely in the capacity as the purchaser representative thereunder (the “Purchaser Representative”), Reviva Pharmaceuticals, Inc., a Delaware corporation (“Reviva”) and, solely in the capacity as the Seller Representative thereunder, Laxminarayan Bhat, (the “Seller Representative”), and the transactions contemplated by the Merger Agreement, including the issuance of the merger consideration thereunder (collectively, the “Business Combination”). Pursuant to the Merger Agreement, Merger Sub will merge with and into Reviva, with Reviva continuing as the surviving entity of the Business Combination and becoming a subsidiary of Tenzing as described in more detail in the attached proxy statement/prospectus. Following the Business Combination, Reviva Pharmaceutical Holdings, Inc. and Tenzing may be collectively referred to as the “Company”. We refer to this proposal as the “Business Combination Proposal.”

 

(3) The 2020 Equity Incentive Plan Proposal — To consider and vote upon the approval of the 2020 Equity Incentive Plan of the Company. We refer to this as the “2020 Equity Incentive Plan Proposal.”

 

(4) The Charter Amendment Proposals — To consider and vote upon seven (7) separate proposals to approve and adopt the Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), a copy of which is attached to this proxy statement/prospectus as Annex B, and the Amended and Restated Bylaws (the “Bylaws”), a copy of which is attached to this proxy statement/prospectus as Annex C, of Tenzing reflecting the following material differences from Tenzing’s Interim Charter:

 

4(a) To consider and vote upon an amendment to the Interim Charter to declassify the Tenzing board of directors into one class of directors.
     
  4(b) To consider and vote upon an amendment to the Interim Charter to provide that, subject to the limitations imposed by applicable law, directors may be removed with or without cause, by the holders of at least a majority in voting power of the shares then entitled to vote at an election of directors.

 

  4(c) To consider and vote upon an amendment to the Interim Charter to prohibit stockholder actions by written consent.

 

  4(d) To consider and vote upon an amendment to the Interim Charter to 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 of 1933, as amended, and the Delaware courts will be the exclusive forum for certain stockholder litigation.

 

  4(e) To consider and vote upon an amendment to the Interim Charter to provide that the Bylaws and the Amended and Restated Certificate of Incorporation may only be amended in accordance with the DGCL.

 

  4(f) To consider and vote upon an amendment to the Interim Charter to remove the provisions addressing indemnification and advancement of expenses for the Company’s officers and directors, as the Company’s proposed Bylaws will provide for substantially similar rights to indemnification and advancement of expenses.
     
  4(g) To consider and vote upon the amendment and restatement of the Interim Charter and authorizing all other changes in connection with the replacement of the Interim Charter with the Amended and Restated Certificate of Incorporation and Bylaws as part of the Business Combination, including (i) changing the post-Business Combination corporate name from “Tenzing Acquisition Corp.” to “Reviva Pharmaceuticals Holdings, Inc.”, and (ii) removing various provisions of the Interim Charter applicable only to a blank check company, including provisions requiring special votes with respect to the variation of rights of shares prior to a business combination, that will no longer be applicable upon consummation of the Business Combination.

 

We refer to these proposals as the “Charter Amendment Proposals.”

 

iv 

 

 

(5) The Director Election Proposal — To consider and vote upon a proposal to elect five directors to serve on the Company’s board of directors effective from the consummation of the Domestication and Business Combination until the 2021 annual meeting of stockholders and until their respective successors are duly elected and qualified. We refer to this as the “Director Election Proposal.”
     
  (6)

The Working Capital Loan Conversion Proposal — To consider and vote upon a proposal to permit Tenzing LLC, our sponsor, to convert an additional $500,000 of promissory notes that were issued or are issuable to evidence working capital loans made by Tenzing LLC, into additional private placement units of the Company at a price of $10.00 per unit. We refer to this as the “Working Capital Loan Conversion Proposal.”

     
  (7) The Adjournment Proposal — To consider and vote upon a proposal to require the chairman of the meeting to adjourn the Shareholders Meeting to a later date or dates, if necessary to permit further solicitation and vote of proxies if it is determined by Tenzing that more time is necessary or appropriate to approve one or more proposals at the Shareholders Meeting. We refer to this proposal as the “Adjournment Proposal” and, together with the Domestication Proposal, the Business Combination Proposal, the 2020 Equity Incentive Plan Proposal, the Charter Amendment Proposals, the Director Election Proposal, and the Working Capital Loan Conversion Proposal as the “Proposals.”

 

These Proposals are described in the accompanying proxy statement/prospectus, which we encourage you to read in its entirety before voting. Only holders of record of ordinary shares of Tenzing at the close of business on [●], 2020 (the “Record Date”) are entitled to notice of the Shareholders Meeting and to vote and have their votes counted at the Shareholders Meeting and any adjournments or postponements thereof.

 

After careful consideration, Tenzing’s board of directors unanimously recommends that the shareholders vote “FOR” the Domestication Proposal, “FOR” the Business Combination Proposal, “FOR” the 2020 Equity Incentive Plan Proposal, “FOR” each of the Charter Amendment Proposals, “FOR” the election of each of the director nominees pursuant to the Director Election Proposal, “FOR” the Working Capital Loan Conversion Proposal and “FOR” the Adjournment Proposal.

 

Each of the Domestication Proposal, the Business Combination Proposal, the 2020 Equity Incentive Plan Proposal, the Director Election Proposal and each of the Charter Amendment Proposals is interdependent upon the others and must be approved in order for Tenzing to complete the Business Combination. All of the Proposals must be approved by the holders of a majority of the ordinary shares of Tenzing entitled to vote that are present and vote at the Shareholders Meeting.

 

v 

 

 

All shareholders of Tenzing are cordially invited to attend the Shareholders Meeting in person. To ensure your representation at the Shareholders Meeting, however, you are urged to mark, sign and date the enclosed proxy card and return it as soon as possible in the pre-addressed postage paid envelope provided. If you are a shareholder of record of Tenzing ordinary shares, you may also cast your vote in person at the Shareholders Meeting. If your shares are held in an account at a brokerage firm or bank, or by a nominee, you must instruct your broker, bank or nominee on how to vote your shares or, if you wish to attend the Shareholders Meeting and vote in person, obtain a proxy from your broker, bank or nominee. If any of the Domestication Proposal, the Business Combination Proposal, the 2020 Equity Incentive Plan Proposal, any of the Charter Amendment Proposals or the Director Election Proposal fails to receive the required approval by the shareholders of Tenzing at the Shareholders Meeting, the Business Combination will not be completed.

 

Whether or not you plan to attend the Shareholders Meeting, we urge you to read the accompanying proxy statement/prospectus (and any documents incorporated into the accompanying proxy statement/prospectus by reference) carefully. Please pay particular attention to the section entitled “Risk Factors” in the accompanying proxy statement/prospectus.

 

Your vote is important regardless of the number of shares you own. Whether you plan to attend the Shareholders Meeting or not, please mark, sign and date the enclosed proxy card and return it as soon as possible in the envelope provided. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

 

Thank you for your participation. We look forward to your continued support.

 

By Order of the Board of Directors  
   

Rahul Nayar

Chief Executive Officer

 
   
                  , 2020  

 

IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS. YOU MAY EXERCISE YOUR RIGHTS TO DEMAND THAT TENZING REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT WHETHER YOU VOTE FOR OR AGAINST THE PROPOSALS OR DO NOT VOTE ON THE PROPOSALS AND WHETHER OR NOT YOU ARE HOLDER OF SHARES AS OF THE RECORD DATE OR ACQUIRED YOUR SHARES AFTER THE RECORD DATE. TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST TENDER YOUR SHARES TO TENZING’S TRANSFER AGENT AT LEAST TWO (2) BUSINESS DAYS PRIOR TO THE SHAREHOLDERS MEETING. YOU MAY TENDER YOUR SHARES FOR REDEMPTION BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DEPOSIT/WITHDRAWAL AT CUSTODIAN (“DWAC”) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE TENDERED SHARES WILL NOT BE REDEEMED FOR CASH AND WILL BE RETURNED TO THE APPLICABLE SHAREHOLDER. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BROKER OR BANK TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. SEE THE SECTION ENTITLED “SHAREHOLDERS MEETING — REDEMPTION RIGHTS” FOR MORE SPECIFIC INSTRUCTIONS.

  

vi 

 

 

TABLE OF CONTENTS 

 

FREQUENTLY USED TERMS   1
MARKET AND INDUSTRY DATA   5
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS   6
SUMMARY OF THE PROXY STATEMENT/PROSPECTUS   8
QUESTIONS AND ANSWERS   17
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION   28
COMPARATIVE PER SHARE INFORMATION   36
RISK FACTORS   37
SHAREHOLDERS MEETING   75
PROPOSAL 1: THE DOMESTICATION PROPOSAL   83
PROPOSAL 2: THE BUSINESS COMBINATION PROPOSAL   98
PROPOSAL 3: THE 2020 EQUITY INCENTIVE PLAN PROPOSAL   126
THE CHARTER AMENDMENT PROPOSALS   134
PROPOSAL 4(a): THE CHARTER AMENDMENT PROPOSAL   137
PROPOSAL 4(b): THE CHARTER AMENDMENT PROPOSAL   139
PROPOSAL 4(c): THE CHARTER AMENDMENT PROPOSAL   139
PROPOSAL 4(d): THE CHARTER AMENDMENT PROPOSAL   141
PROPOSAL 4(e): THE CHARTER AMENDMENT PROPOSAL   142
PROPOSAL 4(f): THE CHARTER AMENDMENT PROPOSAL   143
PROPOSAL 4(g): THE CHARTER AMENDMENT PROPOSAL   144
PROPOSAL 5: THE DIRECTOR ELECTION PROPOSAL   146
PROPOSAL 6: THE WORKING CAPITAL LOAN CONVERSION PROPOSAL 148
PROPOSAL 7: THE ADJOURNMENT PROPOSAL 149
INFORMATION ABOUT TENZING   150
DIRECTORS, OFFICERS, EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE OF TENZING   154
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF TENZING   160
DESCRIPTION OF REVIVA’S, TENZING’S, AND THE COMPANY’S SECURITIES   165
MARKET PRICE AND DIVIDENDS OF SECURITIES   186
BENEFICIAL OWNERSHIP OF SECURITIES   188
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS   190
INFORMATION ABOUT REVIVA   195
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF REVIVA   224
EXECUTIVE OFFICERS AND DIRECTORS OF REVIVA   234
EXECUTIVE COMPENSATION OF REVIVA   234
PRINCIPAL STOCKHOLDERS OF REVIVA   237
MANAGEMENT OF THE COMPANY FOLLOWING THE BUSINESS COMBINATION   241
SECURITIES ACT RESTRICTIONS ON RESALE OF THE COMPANY’S SECURITIES   246
APPRAISAL RIGHTS   247
OTHER SHAREHOLDER COMMUNICATIONS   247
LEGAL MATTERS   247
EXPERTS   247
DELIVERY OF DOCUMENTS TO SHAREHOLDERS   247
TRANSFER AGENT AND REGISTRAR   247
SUBMISSION OF PROPOSALS   248
FUTURE STOCKHOLDER PROPOSALS   248
WHERE YOU CAN FIND MORE INFORMATION   248
INDEX TO FINANCIAL STATEMENTS   249
ANNEX A Interim Certificate of Incorporation of Tenzing Acquisition Corp.   A-1
ANNEX B Amended and Restated Certificate of Incorporation of Reviva Pharmaceutical Holdings, Inc.   B-1
ANNEX C Bylaws of Reviva Pharmaceutical Holdings, Inc.   C-1
ANNEX D Agreement and Plan of Merger   D-1
ANNEX E Reviva Pharmaceutical Holdings, Inc. 2020 Equity Incentive Plan   E-1
ANNEX F Appraisal Rights   F-1

 

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FREQUENTLY USED TERMS

 

Definitions

 

Unless otherwise stated or unless the context otherwise requires, the terms “we,” “us,” “our,” and “Tenzing” refer to Tenzing Acquisition Corp. (which prior to the Domestication is a business company incorporated under the laws of the British Virgin Islands and thereafter a corporation incorporated under the laws of the State of Delaware).

 

In this document:

 

2020 Equity Incentive Plan Proposal” means the proposal to be considered at the Shareholders Meeting to approve the 2020 Equity Incentive Plan of the Company.

 

Adjournment Proposal” means the proposal to be considered at the Shareholders Meeting to require the chairman of the meeting to adjourn the Shareholders Meeting to a later date or dates, if necessary to permit further solicitation and vote of proxies if it is determined by Tenzing that more time is necessary or appropriate to approve one or more Proposals at the Shareholders Meeting.

 

Amended and Restated Certificate of Incorporation” means the proposed certificate of incorporation of the Company to be in effect following the Business Combination, a copy of which is attached to this proxy statement/prospectus as Annex B.

 

Assumed Option” means each outstanding option to acquire Reviva Common Stock (whether vested or unvested) that shall be assumed by the Company in the Business Combination and automatically converted into an option to acquire shares of Company common stock, with its price and number of shares equitably adjusted based on the conversion of the shares of Reviva Stock into the Stockholder Merger Consideration.

 

Assumed Warrant” means each outstanding warrant to acquire Reviva Common Stock that shall be assumed by the Company in the Business Combination and automatically converted into a warrant to acquire shares of Company common stock, with its price and number of shares equitably adjusted based on the conversion of the shares of Reviva Stock into the Stockholder Merger Consideration.

 

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

 

Business Combination Proposal” means the proposal to be considered at the Shareholders Meeting to approve the Business Combination.

 

Bylaws” mean the proposed bylaws of the Company to be in effect following the Business Combination, a form of which is attached to this proxy statement/prospectus as Annex C.

 

Charter Amendment Proposals” means the seven separate proposals to be considered at the Shareholders Meeting to approve and adopt the proposed Amended and Restated Certificate of Incorporation, a copy of which is attached to this proxy statement/prospectus as Annex B, and the proposed Bylaws, a copy of which is attached to this proxy statement/prospectus as Annex C.

 

“Closing” means the closing of the Business Combination.

 

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

 

Companies Act” refers to the BVI Business Companies Act, 2004, as amended.

 

Company” means Tenzing as a Delaware corporation by way of continuation out of the British Virgin Islands following the Business Combination. Following the completion of the Business Combination, Tenzing will change its corporate name to “Reviva Pharmaceutical Holdings, Inc.”

 

Company Common Stock” means the shares of common stock, par value $0.0001 per share, of Tenzing upon consummation of the Business Combination.

 

Company Board” means the board of directors of the Company subsequent to the completion of the Business Combination.

 

Current Charter” means Tenzing’s memorandum and articles of association, as amended, currently registered by the Registrar of Corporate Affairs in the British Virgin Islands.

 

1

 

 

DGCL” means the Delaware General Corporation Law, as amended.

 

Director Election Proposal” means the proposal to be considered at the Shareholders Meeting to elect five directors to serve on the Company Board until the 2021 annual meeting of shareholders and until their respective successors are duly elected and qualified.

 

Domestication” means the domestication of Tenzing by way of its continuation out of the British Virgin Islands into Delaware to become a Delaware corporation pursuant to Section 184(1) of the Companies Act and the applicable provisions of the DGCL, respectively, with the ordinary shares of Tenzing becoming shares of common stock of the Delaware corporation under the applicable provisions of the Companies Act and the DGCL; the term includes all matters and necessary or ancillary changes in order to effect such Domestication, including the adoption of the Interim Charter (as attached hereto at Annex A) consistent with the DGCL and changing the name and registered office of Tenzing.

 

Domestication Proposal” means the proposal to be considered at the Shareholders Meeting to approve the Domestication.

 

DWAC” means The Depository Trust Company’s deposit/withdrawal at custodian system.

 

Earnout Shares” means up to 1,000,000 shares of Tenzing common stock issuable to Reviva stockholders after the Closing based on the stock price performance of Tenzing common stock and the achievement by Reviva of certain clinical trial milestones during the three (3) year period following the Closing.

 

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

 

Founder Shares” means the 1,581,250 currently outstanding ordinary shares of Tenzing owned by the Sponsor.

 

GAAP” means U.S. generally accepted accounting principles.

 

Insider Letter Agreement” means Tenzing’s letter agreement with the Sponsor, directors and officers, dated August 20, 2018, containing provisions relating to transfer restrictions of the Founder Shares and Private Placement Units, indemnification of the Trust Account, waiver of Redemption Rights and participation in liquidation distributions from the Trust Account.

 

Interim Charter” means the certificate of incorporation and by-laws attached to the accompanying proxy statement as Annex A and to be adopted upon the Domestication taking effect.

 

IPO” means Tenzing’s initial public offering of its units pursuant to a registration statement on Form S-1 declared effective by the SEC on August 20, 2018 (SEC File No. 333-226263​).

 

IPO Prospectus” means the final prospectus of Tenzing, dated as of August 20, 2018, and filed with the SEC on August 22, 2018 (File Nos. 333-226263 and 333-226952).

 

Material Adverse Effect” as used in the Merger Agreement, means with respect to any specified person or entity, any fact, event, occurrence, change or effect that has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect upon (a) the business, assets, liabilities, results of operations, prospects, condition (financial or otherwise) of such person or entity and its subsidiaries, taken as a whole, or (b) the ability of such person or entity or any of its subsidiaries on a timely basis to consummate the transactions contemplated by the Merger Agreement or the ancillary documents to which it is a party or bound or to perform its obligations thereunder, in each case subject to certain customary exceptions.

 

Maxim” means Maxim Group LLC, the representative of the underwriters in the IPO.

 

Memorandum and Articles of Association” means Tenzing’s current amended and restated Memorandum and Articles of Association, as may hereafter be amended.

 

Merger” means the statutory merger of Merger Sub with and into Reviva pursuant to the terms of the Merger Agreement and under the applicable provisions of the DGCL, with Reviva continuing as the surviving entity and becoming a subsidiary of the Company.

 

Merger Agreement” means the Agreement and Plan of Merger, dated effective as of July 20, 2020 by and among Tenzing, Merger Sub, the Sponsor, in the capacity as the Purchaser Representative, Reviva Pharmaceuticals, Inc. and Laxminarayan Bhat, in the capacity as Seller Representative thereunder, as it may be amended and supplemented from time to time. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex D.

 

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Merger Sub” means Tenzing Merger Subsidiary Inc., a Delaware corporation and wholly-owned subsidiary of Tenzing.

 

Nasdaq” means The Nasdaq Stock Market, LLC.

 

Outside Date” means December 25, 2020, as extended from the original date of September 25, 2020 pursuant to the terms of the Merger Agreement.

 

Private Placement” means the private placement consummated simultaneously with the IPO in which Tenzing issued to the Sponsor and Maxim the private placement units.

 

Private Placement Shares” means the 358,813 ordinary shares underlying the Private Placement Units.

 

Private Placement Units” means the 358,813 units sold to the Sponsor and Maxim in the Private Placement.

 

Private Placement Warrants” means the 358,813 warrants underlying the Private Placement Units.

 

Proposals” means, collectively, (i) the Domestication Proposal, (ii) the Business Combination Proposal, (iii) the 2020 Equity Incentive Plan Proposal, (iv) the Director Election Proposal, (v) the Charter Amendment Proposals, (vi) the Working Capital Loan Conversion Proposal, and (vii) the Adjournment Proposal, if presented.

 

Public Shareholders” means the holders of Tenzing ordinary shares that were sold in the IPO (whether they were purchased in the IPO or thereafter in the open market).

 

Public Shares” means Tenzing’s ordinary shares sold in the IPO (whether they were purchased in the IPO or thereafter in the open market).

 

Public Warrants” means Tenzing’s warrants sold in the IPO (whether they were purchased in the IPO or thereafter in the open market).

 

Purchaser Representative” or “Sponsor” means Tenzing LLC, a Delaware limited liability company.

 

Record Date” means [●], 2020.

 

Redemption” means the redemption of Public Shares for the Redemption Price.

 

Redemption Price” means an amount equal to a pro rata portion of the aggregate amount then on deposit in the Trust Account in accordance with the Memorandum and Articles of Association (as equitably adjusted for stock splits, stock dividends, combinations, recapitalizations and the like after the Closing). The Redemption Price will be calculated two days prior to the completion of the Business Combination in accordance with Tenzing’s Memorandum and Articles of Association, as currently in effect.

 

Redemption Rights” means the rights of the Tenzing Public Shareholders to demand Redemption of their Public Shares into cash in accordance with the procedures set forth in the Memorandum and Articles of Association and this proxy statement/prospectus.

 

Reviva” means Reviva Pharmaceuticals, Inc.

 

Reviva Common Stock” means the common stock, par value $0.0001 per share, of Reviva.

 

Reviva Options” means an option to purchase Reviva Common Stock that was granted pursuant to the Reviva’s equity incentive plan.

 

Reviva Preferred Stock” means the preferred stock, par value $0.0001 per share, of Reviva.

 

Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as amended.

 

Seller Representative” means Laxminarayan Bhat, acting in the capacity as the Seller Representative of the shareholders of Reviva as set forth in the Merger Agreement.

 

SEC” means the United States Securities and Exchange Commission.

 

Shareholders Meeting” means the extraordinary general meeting of Tenzing’s shareholders, to be held at 9:00 a.m. Eastern Time on [●], 2020 at the offices of Ellenoff Grossman & Schole LLP, at 1345 Avenue of the Americas, 11th Floor, New York, New York 10105, and any adjournments or postponements thereof.

 

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Securities Act” means the Securities Act of 1933, as amended.

 

Tenzing” means Tenzing Acquisition Corp. (which prior to the Domestication is a business company incorporated under the laws of the British Virgin Islands and after the Domestication will be a corporation incorporated under the laws of the State of Delaware).

 

Tenzing Board” means the board of directors of Tenzing.

 

Tenzing Shares” means, the ordinary shares, no par value, of Tenzing prior to the Domestication.

 

Transactions” mean the Merger, Domestications and the other transactions contemplated by the Merger Agreement.

 

Transfer Agent” means Continental Stock Transfer & Trust Company.

 

Trust Account” means the trust account of Tenzing, which holds the net proceeds from the IPO and the sale of the Private Placement Units, together with interest earned thereon, less amounts released to pay taxes.

 

Units” means the units sold in the IPO (including pursuant to the overallotment option) consisting of one ordinary share of Tenzing and one warrant.

 

Warrant Agreement” means the Warrant Agreement, dated August 20, 2018, between Tenzing and the Transfer Agent, which governs Tenzing’s outstanding warrants.

 

Working Capital Loan Conversion Proposal” means the proposal to be considered at the Shareholders Meeting to permit the Sponsor to convert an additional $500,000of promissory notes that were issued or are issuable to evidence working capital loans made by the Sponsor, into additional Private Placement Units of the Company at a price of $10.00 per unit.

 

Share Calculations and Ownership Percentages

 

Unless otherwise specified (including in the sections entitled “Unaudited Pro Forma Condensed Combined Financial Information”), the share calculations and ownership percentages set forth in this proxy statement/prospectus with respect to the Company’s stockholders following the Business Combination are for illustrative purposes only and assume the following (certain capitalized terms below are defined elsewhere in this proxy statement/prospectus):

 

  1. No Public Shareholders exercise their Redemption Rights in connection with the Closing of the Business Combination, and the balance of the Trust Account as of the Closing is approximately $34.4 million. Please see the section entitled “Shareholders Meeting — Redemption Rights”.

  

2.No Tenzing warrant holders exercise any of the Tenzing warrants that will remain outstanding following the Business Combination.

 

3.The Escrow Shares are treated as if owned by Reviva shareholders, although they will be held in escrow and subject to return and cancellation by the Company. Please see the section entitled “Proposal 2: The Business Combination Proposal — The Merger Agreement — The Escrow Shares.

 

  4. The total number of post-Merger shares of common stock issued to the Reviva shareholders will be approximately 5,771,934.

 

  5. The per share redemption price will be approximately $10.81 at the closing of the Business Combination.

  

6.Reviva obtains the amendments to the 2016 Notes, 2018 Notes, and 2020 Notes from the 2016 Notes Majority Holders, the 2018 Notes Majority Holders and 2020 Notes Majority Holders, as further described in the section titled “Description of Reviva’s, Tenzing’s and the Company’s Securities– Description of Reviva’s Securities Prior to the Business Combination.”

 

7.Reviva issues the full amount of the Reviva Interim Period Notes and the Reviva Contingent Interim Period Notes prior to the closing of the Business Combination, as further described in the section titled “Description of Reviva’s, Tenzing’s and the Company’s Securities– Description of Reviva’s Securities Prior to the Business Combination.”

 

  8. No Earnout Shares are issued and the Assumed Options and Assumed Warrants are excluded.

 

  9. The Working Capital Loan Proposal is approved such that the Sponsor can convert an additional $275,000 of the working capital loans into Private Placement Units.

 

  10. The Sponsor’s working capital loans are converted into units of Tenzing.

 

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MARKET AND INDUSTRY DATA

 

Information contained in this proxy statement/prospectus concerning the market and the industry in which Reviva competes, including its market position, general expectations of market opportunity and market size, is based on information from various third-party sources, on assumptions made by Reviva based on such sources and Reviva’s knowledge of the markets for its services and solutions. Any estimates provided herein involve numerous assumptions and limitations, and you are cautioned not to give undue weight to such information. Third-party sources generally state that the information contained in such source has been obtained from sources believed to be reliable but that there can be no assurance as to the accuracy or completeness of such information. Notwithstanding the foregoing, we are liable for the information provided in this proxy statement/prospectus. The industry in which Reviva operates is subject to a high degree of uncertainty and risk. As a result, the estimates and market and industry information provided in this proxy statement/prospectus are subject to change based on various factors, including those described in the section entitled “Risk Factors — Risks Related to Reviva’s Business” and elsewhere in this proxy statement/prospectus.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This proxy statement/prospectus contains forward-looking statements. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for our business, and the timing and ability for Tenzing and Reviva to complete the Business Combination. Specifically, forward-looking statements may include statements relating to:

 

·      the benefits of the Business Combination;

 

·      the future financial performance of the Company following the Business Combination;

 

·      the risks that Reviva’s products in development fail clinical trials or are not approved by the U.S. Food and Drug Administration or other applicable authorities;

 

·      expansion plans and opportunities; and

 

·      other statements preceded by, followed by or that include the words “may,” “can,” “should,” “will,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions.

 

These forward-looking statements are based on information available as of the date of this proxy statement/prospectus and Tenzing and Reviva managements’ current expectations, forecasts and assumptions, and involve a number of judgments, known and unknown risks and uncertainties and other factors, many of which are outside the control of Tenzing, Reviva and their respective directors, officers and affiliates. Accordingly, forward-looking statements should not be relied upon as representing Tenzing’s views as of any subsequent date. Tenzing does not undertake any obligation to update, add or to otherwise correct any forward-looking statements contained herein to reflect events or circumstances after the date they were made, whether as a result of new information, future events, inaccuracies that become apparent after the date hereof or otherwise, except as may be required under applicable securities laws.

 

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

 

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

 

·      the outcome of any legal proceedings that may be instituted against Reviva or Tenzing following announcement of the proposed Business Combination and transactions contemplated thereby;

 

·      the inability to complete the Business Combination, including due to the failure to obtain approval of the Tenzing shareholders or otherwise retain sufficient cash in the Trust Account or find replacement cash to meet the requirements of the Merger Agreement or the failure to meet other conditions to closing in the Merger Agreement;

 

·      the inability to consummate the Business Combination due to the uncertainty resulting from the recent COVID-19 pandemic;

 

·      the inability to maintain the listing of the common stock of the Company on Nasdaq following the Business Combination;

 

·      the risk that the proposed Business Combination disrupts current plans and operations;

 

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

 

·      costs related to the Business Combination;

 

·      changes in the markets that Reviva targets;

 

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·      the possibility that Tenzing or Reviva may be adversely affected by other economic, business, and/or competitive factors;

 

·      the risk that the Business Combination disrupts current plans and operations of Reviva as a result of the announcement and consummation of the Business Combination;

 

·      changes to Reviva’s relationships within the pharmaceutical ecosystem;

 

·      the inability to launch new Reviva services and products or to profitably expand into new markets;

 

·      the inability to execute Reviva’s growth strategies, including identifying and executing acquisitions;

 

·      the inability to develop and maintain effective internal controls;

 

·      the exposure to any liability, protracted and costly litigation or reputational damage relating to Reviva’s data security;

 

·      changes in applicable laws or regulations;

 

·      the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; and

 

·      other risks and uncertainties indicated in this proxy statement/prospectus, including those set forth under the section entitled “Risk Factors.”

 

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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

 

This summary highlights selected information from this proxy statement/prospectus, but does not contain all of the information that may be important to you. To better understand the Proposals to be considered at the Shareholders Meeting, including the Business Combination Proposal, whether or not you plan to attend such meeting, we urge you to read this proxy statement/prospectus (including the annexes) carefully, including the section entitled “Risk Factors” beginning on page 37. See also the section entitled “Where You Can Find More Information.”

 

Parties to the Business Combination

 

Tenzing

 

Tenzing was incorporated as a British Virgin Islands business company on March 20, 2018 as a blank check company whose objective is to acquire, through a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination, one or more businesses or entities. In June 2018, Tenzing sold an aggregate of 1,437,500 ordinary shares were sold to the Sponsor at a price of approximately $0.017 per share, for an aggregate price of $25,000. On August 20, 2018, Tenzing effectuated a 1.1-for-1 share dividend resulting in an aggregate of 1,581,250 ordinary shares (the “Founder Shares”) outstanding and held by the Sponsor.

 

On August 23, 2018, Tenzing completed its initial public offering (the “IPO”) of 5,500,000 units. Each unit consists of one ordinary share of Tenzing and one warrant, with each warrant entitling the holder thereof to purchase one ordinary share for $11.50 per share. The units were sold at a price of $10.00 per Unit, generating gross proceeds to Tenzing of $55,000,000.

 

Simultaneously with the closing of the IPO, Tenzing consummated the sale of an aggregate of 323,750 units (the “Private Placement Units”) at a price of $10.00 per unit in a private placement to Tenzing’s sponsor, Tenzing LLC, a Delaware limited liability company (the managing members of which are Tenzing’s Chairman and Chief Executive Officer) (the “Sponsor”), and Maxim Group LLC the underwriter of the IPO (“Maxim”), generating total gross proceeds of $3,237,500.

 

On August 30, 2018, in connection with the underwriters’ election to fully exercise their over-allotment option, Tenzing consummated the sale of an additional 825,000 Units and the sale of an additional 35,063 Private Placement Units, each at $10.00 per unit, generating total gross proceeds of $8,600,630. Following the closing, an additional $8,415,000 of net proceeds ($10.20 per Unit) was deposited in the Trust Account, resulting in $64,515,000 held in the Trust Account, which was established for the benefit of the Public Shareholders. The remaining proceeds became available to be used to provide for business, legal and accounting due diligence on prospective business combinations and continuing general and administrative expenses.

 

On February 18, 2020, Tenzing held a special meeting of shareholders in lieu of the 2020 annual general meeting of shareholders, at which the shareholders voted to amend the Memorandum and Articles of Association to extend the date by which Tenzing must consummate a business combination from February 23, 2020 to May 26, 2020 (or June 23, 2020 if Tenzing had executed a definitive agreement for a business combination by May 26, 2020). In connection with such amendment, shareholders elected to redeem 595,886 ordinary shares, which represented approximately 9% of the shares that were part of the units that were sold in the IPO. On May 21, 2020, Tenzing held another special meeting of shareholders at which the shareholders voted to further amend the Memorandum and Articles of Association to extend the date by which Tenzing must consummate a business combination from May 26, 2020 to July 27, 2020 (or September 28, 2020 if Tenzing has executed a definitive agreement for a business combination by July 27, 2020). On September 24, 2020, Tenzing held another special meeting of shareholders at which the shareholders voted to further amend the Memorandum and Articles of Association to extend the date by which Tenzing must consummate a business combination from September 28, 2020 to December 28, 2020. In connection with such amendment, shareholders elected to redeem 10,122 ordinary shares, which represented approximately .32% of the shares that were outstanding as of the record date of such special meeting. On September 29, 2020, Tenzing delivered notice to Reviva that Tenzing had obtained an extension by which it had to complete its initial business combination and was thereby extending the Outside Date under the Merger Agreement to December 25, 2020. The net proceeds deposited into the Trust Account remain on deposit in the Trust Account earning interest except those certain amounts withdrawn in order to pay tax obligations. As of September 29, 2020, there were approximately $34.4 million held in the Trust Account and as of September 29, 2020, $244,356.48 of cash was held outside of the Trust Account and is available for working capital purposes.

 

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Tenzing’s principal executive offices are located at 250 West 55th Street, Suite 13D, New York, New York 10019 and its phone number is (212) 710-5220.

 

Merger Sub

 

Merger Sub is a Delaware corporation and wholly-owned subsidiary of Tenzing formed on July 20, 2020. In the Merger, Merger Sub will merge with and into Reviva with Reviva being the surviving entity and becoming a wholly-owned subsidiary of the Company.

 

Merger Sub’s principal executive offices are located at 250 West 55th Street, Suite 13D, New York, New York 10019 and its phone number is (212) 710-5220.

 

Reviva

 

Reviva was incorporated in the state of Delaware on May 1, 2006 and its subsidiary, Reviva Pharmaceuticals India Pvt. Ltd., was incorporated on December 23, 2014, and has a limited operating history. Reviva is a clinical-stage biopharmaceutical company that discovers, develops and seeks to commercialize next-generation therapeutics for diseases representing significant unmet medical needs and burden to society, patients, and their families. Reviva’s current pipeline focuses on the central nervous system, respiratory, and metabolic diseases. Reviva is using chemical genomics driven technology platform and proprietary chemistry to develop new medicines. Reviva’s pipeline currently has two drug candidates, RP5063 (Brilaroxazine) and RP1208. Both are new chemical entities discovered in-house. Reviva has been granted composition of matter patents for both RP5063 and R1208 in the United States (U.S.), Europe, and several other countries.

 

Following the closing of the Business Combination, Reviva’s primary focus is to complete the clinical development of RP5063 for the treatment of acute and maintenance schizophrenia.

 

Reviva’s principal executive offices are located at 19925 Stevens Creek Blvd, Suite 100, Cupertino, CA 95014 and its phone number is (408) 501-8881.

 

The Proposals to be Submitted at the Shareholders Meeting

 

The Domestication Proposal

 

Tenzing is proposing to re-domicile by way of its continuation out of the British Virgin Islands, as a company incorporated under the laws of the British Virgin Islands, and into Delaware to become a corporation incorporated under the laws of the State of Delaware, pursuant to Section 184(1) of the Companies Act and the applicable provisions of the DGCL, respectively. In connection with the Domestication, Tenzing will adopt the Interim Charter which will replace or remove certain provisions of the Current Charter which are no longer valid or otherwise applicable as a result of the Domestication (but without substantively changing such ongoing rights) and file the same with the Secretary of State of the State of Delaware. All shareholders are encouraged to read the Interim Charter in its entirety for a more complete description of its terms.

 

You should note that not only will the Interim Charter preserve the existing rights of Tenzing ordinary shares, but also that the existing provisions of the Current Charter (including Regulation 23 of the Current Charter and those provisions which cannot be amended prior to the Closing or made subject to certain restrictions or amendment) will be replicated or substantively replicated in the Current Charter. Please read the section entitled “Proposal 1: The Domestication Proposal.

 

The Business Combination Proposal

 

Tenzing and Reviva have agreed to the Business Combination under the terms the Merger Agreement. Pursuant to the terms set forth in the Merger Agreement, subject to the satisfaction or waiver of the conditions to the Closing therein, after completion of the Domestication, Merger Sub will merge with and into Reviva, with Reviva continuing as the surviving entity and becoming a subsidiary of the Company.

 

Merger Agreement

 

In connection with the completion of the Merger, the Reviva shareholders will collectively receive as consideration for their existing Reviva stock a number of Company securities with an aggregate value equal to (the “Merger Consideration”) (a) Sixty Two Million Four Hundred Thousand ($62,400,000), plus the additional contingent right to receive the Earnout Shares (as defined below) after the Closing, as described below. The Merger Consideration to be paid to Reviva stockholders will be paid solely by the delivery of new shares of Tenzing common stock, each valued at the Redemption Price.

 

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The Merger Consideration will be allocated among holders of Reviva’s common stock (“Reviva Common Stockholders”) and the holders of Reviva’s preferred stock (“Reviva Preferred Stockholders”), such that Reviva Preferred Stockholders will receive $11,000,000 in Merger Consideration (pro rata amongst them based on the number of shares of Reviva preferred stock owned) before Reviva Common Stockholders receive any Merger Consideration, and then the Reviva Common Stockholders and Reviva Preferred Stockholders will receive the remaining $51.4 million of the Merger Consideration pro rata treating the Reviva preferred stock on an as-converted to common stock basis (which is currently on a one-for one basis); provided however that the Merger Consideration otherwise payable to Reviva stockholders is subject to the withholding of the Escrow Shares (as defined below) and is subject to reduction for indemnification obligations. The Merger Consideration is not subject to any purchase price adjustments. Certain convertible promissory notes of Reviva will be required to convert into shares of Reviva common stock prior to the Closing, and will share in the Merger Consideration, as will certain obligations owed by Reviva to a broker that will be paid with Reviva common stock prior to the Closing. However, the Merger Consideration does not include any value attributable to the Assumed Warrants and Assumed Options.

 

Organizational Structure

 

The diagrams below depict simplified versions of the current organizational structures of Tenzing and Reviva, respectively.

 

 

 

* The Indian government regulates ownership of Indian companies by non-residents. Foreign investment in Indian securities is generally regulated by the Consolidated Policy on Foreign Direct Investment (the “FDI Policy”) issued by the Government and the Foreign Exchange Management Act, 1999 (the “Foreign Exchange Management Act”), which prevents 100% ownership by a foreign parent company of its Indian subsidiary.

 

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The diagram below depicts a simplified version of our organizational structure immediately following the completion of the Business Combination.

 

 

 

* The Indian government regulates ownership of Indian companies by non-residents. Foreign investment in Indian securities is generally regulated by the Consolidated Policy on Foreign Direct Investment (the “FDI Policy”) issued by the Government and the Foreign Exchange Management Act, 1999 (the “Foreign Exchange Management Act”), which prevents 100% ownership by a foreign parent company of its Indian subsidiary.

 

The Merger Agreement is subject to standard conditions to the Closing. In addition, the Closing is subject to the following additional conditions:

 

The obligations of the parties to the Merger Agreement to effect the Closing are subject to a number of closing conditions, including, among others:

 

With respect to the obligations of all of the parties to the Merger Agreement:

 

·the effectiveness of the registration statement (of which this proxy statement/prospectus forms a part);

 

·upon the Closing, after giving effect to the Redemption or equity financing, the Company shall have net tangible assets of at least $5,000,001;

 

·receipt of Tenzing shareholder approval;

 

· receipt of Required Reviva Stockholder Approval;

 

·expiration of any applicable waiting period under any antitrust laws;

 

·receipt of requisite consents from governmental authorities to consummate the Transactions, and receipt of specified requisite consents from other third parties to consummate the Transactions;

 

·the absence of any law or order that would prohibit the consummation of the Merger or other transactions contemplated by the Merger Agreement;

 

·the absence of any pending claim, demand, action, litigation complaint, or other proceeding by or before a governmental authority seeking to enjoin the consummation of the Merger and the other Transactions;

 

·the Conversion having been consummated; and

 

·the members of the Post-Closing Board shall have been elected or appointed as of the Closing.

 

See the section entitled “The Business Combination Proposal” for a summary of the terms of the Merger Agreement and additional information regarding the terms of the Business Combination Proposal.

 

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The 2020 Equity Incentive Plan Proposal

 

Tenzing is proposing that its shareholders approve the 2020 Equity Incentive Plan which will become effective upon the Closing and will be used by the Company on a going-forward basis following the Closing. A summary of the 2020 Equity Incentive Plan is set forth in the section entitled “The 2020 Equity Incentive Plan Proposal” of this proxy statement/prospectus and a complete copy of the 2020 Equity Incentive Plan is attached hereto as Annex E.

 

The Charter Amendment Proposals

 

Tenzing is proposing that its shareholders approve and adopt the following seven (7) separate proposals to approve and adopt the Amended and Restated Certificate of Incorporation, a copy of which is attached to this proxy statement/prospectus as Annex B, and the Bylaws, a copy of which is attached to this proxy statement/prospectus as Annex C:

 

· Proposal 4(a): To consider and vote upon an amendment to the Interim Charter to declassify the Tenzing board of directors into one class of directors.

 

·

Proposal 4(b): To consider and vote upon an amendment to the Interim Charter to provide that, subject to the limitations imposed by applicable law, directors may be removed with or without cause, by the holders of at least a majority in voting power of the shares then entitled to vote at an election of directors.

 

· Proposal 4(c): To consider and vote upon an amendment to the Interim Charter to prohibit stockholder actions by written consent.

 

· Proposal 4(d): To consider and vote upon an amendment to the Interim Charter to 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 of 1933, as amended, and the Delaware courts will be the exclusive forum for certain stockholder litigation.

 

· Proposal 4(e): To consider and vote upon an amendment to the Interim Charter to provide that the Bylaws and the Amended and Restated Certificate of Incorporation may only be amended in accordance with the DGCL.

 

·

Proposal 4(f): To consider and vote upon an amendment to the Interim Charter to remove the provisions addressing indemnification and advancement of expenses for the Company’s officers and directors, as the Company’s proposed Bylaws will provide for substantially similar rights to indemnification and advancement of expenses.

 

·

Proposal 4(g): To consider and vote upon the amendment and restatement of the Interim Charter and authorizing all other changes in connection with the replacement of the Interim Charter with the Amended and Restated Certificate of Incorporation and Bylaws as part of the Business Combination, including (i) changing the post-Business Combination corporate name from “Tenzing Acquisition Corp.” to “Reviva Pharmaceuticals Holdings, Inc.”, and (ii) removing various provisions of the Interim Charter applicable only to a blank check company, including provisions requiring special votes with respect to the variation of rights of shares prior to a business combination, that will no longer be applicable upon consummation of the Business Combination.

 

The Charter Amendment Proposals are set forth in the section entitled “Proposal 4: The Charter Amendment Proposals” of this proxy statement/prospectus.

 

The Director Election Proposal

 

Tenzing is proposing that its shareholders approve the election of five directors to serve on the Company Board from the Domestication and Business Combination becoming effective until the 2021 annual meeting of stockholders, respectively, and until their respective successors are duly elected and qualified. It is noted in this regard that the appointments of the five directors under the Director Election Proposal will take effect under the terms of the Amended and Restated Certificate of Incorporation and the Bylaws of the Company as continued into Delaware. A summary of the Director Election Proposal is set forth in the section entitled “Proposal 5: The Director Election Proposal” of this proxy statement/prospectus.

 

The Working Capital Loan Conversion Proposal

 

Tenzing is proposing that its shareholders permit our Sponsor to convert an additional $500,000 of promissory notes that were issued or are issuable to evidence working capital loans made by our Sponsor into additional Private Placement Units of the Company at a price of $10.00 per unit. A summary of the Working Capital Loan Conversion. Proposal is set forth in the section entitled “Proposal 6: The Working Capital Loan Conversion Proposal” of this proxy statement/prospectus.

 

The Adjournment Proposal

 

The Adjournment Proposal, if adopted, will allow the Tenzing Board to adjourn the Shareholders Meeting to a later date or dates, including, if necessary to permit further solicitation and vote of proxies if it is determined by Tenzing that more time is necessary or appropriate to approve one or more Proposals at the Shareholders Meeting. A summary of the Adjournment Proposal is set forth in the section entitled “Proposal 7: The Adjournment Proposal” of this proxy statement/prospectus.

 

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The Shareholders Meeting

 

Date, Time and Place of Shareholders Meeting

 

The Shareholders Meeting will be held at 9:00 a.m. Eastern time, on [●], 2020, at the offices of Ellenoff Grossman & Schole LLP, at 1345 Avenue of the Americas, 11th Floor, New York, New York 10105, or at such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the Proposals.

 

Record Date; Outstanding Shares; Shareholders Entitled to Vote

 

Tenzing has fixed the close of business on [●], 2020 as the Record Date for determining the Tenzing shareholders entitled to notice of and to attend and vote at the Shareholders Meeting. As of the close of business on such date, there were 5,124,431 ordinary shares outstanding and entitled to vote. Each share is entitled to one vote per share at the Shareholders Meeting.

 

Pursuant to the Insider Letter Agreement, 1,581,250 of Founder Shares owned by the Sponsor will be voted in favor of the Business Combination Proposal.

 

Proxy Solicitation

 

Proxies with respect to the Shareholders Meeting may be solicited by telephone, by facsimile, by mail, on the Internet or in person. Tenzing has engaged Advantage Proxy to assist in the solicitation of proxies. If a shareholder grants a proxy, it may still vote its shares in person if it revokes its proxy before the Shareholders Meeting. A shareholder may also change its vote by submitting a later-dated proxy, as described in the section entitled “Shareholders Meeting — Revoking Your Proxy — Changing Your Vote.”

 

Quorum and Required Vote

 

A quorum of Tenzing shareholders is necessary to hold the Shareholders Meeting. The presence, in person or by proxy, of Tenzing shareholders representing at least 50% of the ordinary shares issued and outstanding on the Record Date and entitled to vote on the Proposals to be considered at the Shareholders Meeting will constitute a quorum for the Shareholders Meeting.

 

Each of the Domestication Proposal, the Business Combination Proposal, the 2020 Equity Incentive Plan Proposal, the Director Election Proposal and each of the Charter Amendment Proposals is interdependent upon the others and must be approved in order for Tenzing to complete the Business Combination as contemplated by the Merger Agreement Each of the Domestication Proposal, the Business Combination Proposal, the 2020 Equity Incentive Plan Proposal, the Director Election Proposal, the Charter Amendment Proposals, and the Working Capital Loan Conversion Proposal will require the affirmative vote of the holders of a majority of the Tenzing Shares that are present and vote at the Shareholders Meeting.

 

Management of the Company Following the Business Combination

 

The Company’s directors and executive officers upon completion of the Business Combination will be as follows:

 

Name   Age   Position
Laxminarayan Bhat   55   President Chief Executive Officer, Director
Marc Cantillon, MD   62   Chief Medical Officer
Parag Saxena   63   Chairman of the Board
Richard Margolin, MD   69   Director
Purav Patel   38   Director

Les Funtleyder

  51   Director

 

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For more information on the directors and executive officers upon completion of the Business Combination, see “Management of the Company Following the Business Combination.”

 

Anticipated Accounting Treatment

 

The Business Combination will be accounted for as a business combination under the scope of the Financial Accounting Standards Board’s Accounting Standards Codification 805, Business Combinations, or ASC 805. Under ASC 805, Reviva has been determined to be the accounting acquirer. Under ASC 805, the acquiring entity (Reviva) in a business combination recognizes 100 percent of the acquired assets and assumed liabilities, regardless of the percentage owned, at their estimated fair values as the date of acquisition. Any excess of the purchase price over the fair value of net assets and other identifiable intangible assets acquired is recorded as goodwill. To the extent the fair value of net assets acquired, including other identifiable assets, exceeds the purchase price, a bargain purchase gain is recognized. Assets acquired and liabilities assumed from contingencies must also be recognized at fair value, if the fair value can be determined during the measurement period. Results of operations of an acquired business are included in the statement of income (loss) from the date of acquisition. Acquisition-related costs, including conversion and restructuring charges, are expensed as incurred.

 

Regulatory Approvals

 

The Business Combination and the transactions contemplated by the Merger Agreement are not subject to any additional regulatory requirement or approval, except for (i) filings with British Virgin Islands and Delaware necessary to effectuate the Domestication, and (ii) filings required with the SEC pursuant to the reporting requirements applicable to Tenzing, and the requirements of the Securities Act of 1933, as amended (the “Securities Act”) and the Securities Exchange Act of 1934, including the requirement to file the registration statement of which this proxy statement/prospectus forms a part and to disseminate this proxy statement/prospectus to Tenzing’s shareholders.

 

Redemption Rights

 

Public Shareholders may seek to have their shares redeemed by Tenzing, regardless of whether they vote for or against the Business Combination or any other Proposals and whether they held Tenzing ordinary shares as of the Record Date or acquired them after the Record Date. It is anticipated that the per share redemption price will be approximately $10.88 at the closing of the Business Combination assuming the closing occurs on the Outside Date. A Public Shareholder that has properly tendered his or her shares for Redemption will be entitled to receive his or her pro rata portion of the aggregate amount then on deposit in the Trust Account in cash for such shares only if the Business Combination is completed. If the Business Combination is not completed, the Redemptions will be canceled and the tendered shares will be returned to the relevant Public Shareholders as appropriate. Any Public Shareholder who holds ordinary shares of Tenzing on or before [●], 2020 (two (2) business days before the Shareholders Meeting) will have the right to demand that his or her shares be redeemed for a full pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid. See the section entitled “Shareholders Meeting – Redemption Rights” for the procedures to be followed if you are to redeem your shares for cash.

 

Appraisal Rights

 

If the Business Combination is completed, Reviva stockholders who do not deliver a written consent approving the Business Combination are entitled to appraisal rights under Section 262 of the DGCL (“Section 262”) provided that they comply with the conditions established by Section 262. For more information about such rights, see the provisions of Section 262 of the DGCL, attached hereto as Annex F, and the section entitled “Shareholders Meeting—Appraisal Rights.” Tenzing’s shareholders do not have appraisal rights under the Companies Law or otherwise in connection with the Business Combination Proposal or the other Proposals.

 

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

 

As discussed more fully under the section entitled “Proposal 1: The Domestication Proposal — Material U.S. Federal Income Tax Consequences of the Domestication to Tenzing Shareholders and Warrant Holders” below, it is intended that the Domestication will constitute a tax-free reorganization within the meaning of Section 368(a)(l)(F) of the Code. However, due to the absence of guidance directly on how the provisions of Section 368(a) of the Code apply in the case of a statutory conversion of a corporation with no active business and only investment type assets such as Tenzing, this result is subject to some uncertainty. Assuming that the Domestication so qualifies, U.S. Holders (as defined in such section) of Tenzing Shares will be subject to Section 367(b) of the Code and, as a result:

 

·A U.S. Holder of Tenzing Shares whose Tenzing Shares have a fair market value of less than $50,000 on the date of the Domestication and who does not own actually and constructively 10% or more (by vote or value) of Tenzing will not recognize any gain or loss and will not be required to include any part of Tenzing’s earnings in income;

 

·A U.S. Holder of Tenzing Shares whose Tenzing Shares have a fair market value of $50,000 or more, but who on the date of the Domestication owns (actually and constructively) less than 10% of the total combined voting power or value of Tenzing will generally recognize gain (but not loss) on the exchange of Tenzing Shares for shares in the Company (a Delaware corporation) pursuant to the Domestication. As an alternative to recognizing gain, such U.S. Holders may file an election to include in income as a dividend the “all earnings and profits amounts,” (as defined in Treasury Regulation Section 1.367(b)-2(d)) attributable to their Tenzing Shares, provided certain other requirements are satisfied. Tenzing does not expect to have significant cumulative earnings and profits on the date of the Domestication; and

 

·A U.S. Holder of Tenzing Shares whose Tenzing Shares have a fair market value of $50,000 or more, and who on the date of the Domestication owns (actually and constructively) 10% or more of the total combined voting power or value of Tenzing will generally be required to include in income as a dividend the “all earnings and profits amount,” (as defined in Treasury Regulation Section 1.367(b)-2(d))) attributable to its Tenzing Shares, provided certain other requirements are satisfied. Tenzing does not expect to have significant cumulative earnings and profits on the date of the Domestication.

 

Furthermore, even if the Domestication qualifies as a reorganization under Section 368(a) of the Code, a U.S. Holder of Tenzing Shares may still recognize gain (but not loss) upon the exchange of its Tenzing Shares for the common stock of the Delaware corporation pursuant to the Domestication 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 Domestication and the U.S. Holder’s adjusted tax basis in the corresponding Tenzing Shares surrendered in exchange therefor. The tax on any such gain so recognized would be imposed at the rate applicable to ordinary income and an interest charge would apply. In such event, the U.S. Holder’s aggregate tax basis in the common stock of the Delaware corporation received in connection with the Domestication should be the same as the aggregate tax basis of Tenzing Shares surrendered in the Domestication, increased by any amount included in the income of such U.S. Holder under the PFIC rules. For a more complete discussion of the potential application of the PFIC rules to U.S. Holders as a result of the Domestication, see the discussion in the section entitled “The Domestication Proposal — Material U.S. Federal Income Tax Consequences of the Domestication to Tenzing Shareholders and Warrant Holders — U.S. Holders PFIC Considerations.

 

For a description of the tax consequences for Public Shareholders exercising Redemption Rights in connection with the Business Combination, see the sections entitled “The Business Combination Proposal — Material U.S. Federal Income Tax Considerations to Shareholders Exercising Redemption Rights” and “The Domestication Proposal — Material U.S. Federal Income Tax Consequences of the Domestication to Tenzing Shareholders and Warrant Holders — Tax Consequences to Non-U.S. Holders That Elect to Have Their Tenzing Shares Converted for Cash.”

 

Material U.S. Federal Income Tax Consequences of the Business Combination

 

Each of Tenzing and Reviva intend that the Business Combination qualify as a reorganization within the meaning of Section 368(a) of the Code. In general, and subject to the qualifications and limitations set forth in the section titled “The Business Combination – Material U.S. Federal Income Tax Consequences of the Business Combination,” if the Merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, the material tax consequences to U.S. Holders (as defined below) of Reviva common stock will be as follows:

 

• a Reviva stockholder should not recognize gain or loss upon the exchange of Reviva common stock for Tenzing common stock pursuant to the Merger, except to the extent of cash received in lieu of a fractional share of Tenzing common stock as described below;

 

• a Reviva stockholder should recognize gain or loss to the extent any cash received in lieu of a fractional share of Tenzing common stock exceeds or is less than the basis of such fractional share;

 

• a Reviva stockholder’s aggregate tax basis for the shares of Tenzing common stock received in the Merger should equal the stockholder’s aggregate tax basis in the shares of Reviva common stock surrendered in the Merger, decreased by the amount of any tax basis allocable to a fractional share for which cash is received; and

 

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• the holding period of the shares of Tenzing common stock received by a Reviva stockholder in the Merger should include the holding period of the shares of Reviva common stock surrendered in exchange therefor.

 

In connection with the filing of the registration statement of which this proxy statement/prospectus is a part, Ellenoff Grossman & Schole LLP will deliver an opinion that the statements under the section titled “The Business Combination—Material U.S. Federal Income Tax Consequences of the Business Combination” constitutes the opinion of Ellenoff Grossman & Schole LLP. In rendering its opinion, counsel assumes that the statements and facts concerning the Business Combination set forth in this proxy statement/prospectus and in the Merger Agreement, are true and accurate in all respects, and that the Business Combination will be completed in accordance with this proxy statement/prospectus and the Merger Agreement. Counsel’s opinion also assumes the truth and accuracy of certain representations and covenants as to factual matters made by Tenzing, Reviva and Merger Sub in tax representation letters provided to counsel. In addition, counsel bases its tax opinion on the law in effect on the date of the opinion and assumes that there will be no change in applicable law between such date and the time of the Business Combination. If any of these assumptions is inaccurate, the tax consequences of the Merger could differ from those described in this proxy statement/prospectus.

 

Tax matters are very complicated, and the tax consequences of the Business Combination to a particular Reviva stockholder will depend on such stockholder’s circumstances. Accordingly, you are strongly urged to consult your tax advisor for a full understanding of the tax consequences of the Business Combination to you, including the applicability and effect of federal, state, local and non-U.S. income and other tax laws.

 

 

Recommendation to Shareholders of Tenzing

 

The Tenzing Board has unanimously approved the Proposals.

 

The Board unanimously recommends that shareholders:

 

·        Vote “FOR” the Domestication Proposal;

 

·        Vote “FOR” the Business Combination Proposal;

 

·        Vote “FOR” the 2020 Equity Incentive Plan Proposal;

 

·        Vote “FOR” each of the Charter Amendment Proposals;

 

·        Vote “FOR” the election of each of the director nominees pursuant to the Director Election Proposal;

 

·       Vote “FOR” the Working Capital Loan Conversion Proposal; and 

 

·        Vote “FOR” the Adjournment Proposal, if it is presented at the Shareholders Meeting.

 

The existence of any financial and personal interests of one or more of Tenzing’s directors may be argued to result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of Tenzing and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the Proposals. See the section entitled “The Business Combination Proposal — Interests of Tenzing’s Directors and Officers and Others in the Business Combination” in this proxy statement/prospectus for a further discussion of such interests and potential conflicts of interest.

 

Comparison of the Rights of Holders of Reviva Stock and Company Stock after the Business Combination

 

As a result of the Merger, the holders of shares of Reviva Common Stock and Reviva Preferred Stock will become holders of the Company Common Stock and their rights will be governed by Delaware law (and by the Company’s proposed Amended and Restated Certificate of Incorporation and Bylaws (instead of the Reviva amended and restated certificate of incorporation and the Reviva bylaws)). Following the Merger, former Reviva stockholders may have different rights as Company stockholders than they had as Reviva stockholders.

 

Please see the section entitled “Description of Reviva’s, Tenzing’s, and the Company’s Securities - Comparison of the Rights of Holders of Reviva Stock and Company Stock after the Business Combination.”

 

Reviva Solicitation of Written Consents

 

Following the registration statement on Form S-4, of which this proxy statement/prospectus is a part, being declared effective by the SEC, Reviva will seek an action by written consent from its stockholders authorizing, approving and consenting to, the execution, delivery and performance of the Merger Agreement and each of the ancillary documents to the Merger Agreement to which Reviva is or is required to be a party or bound, and the consummation of the transactions contemplated by the Merger Agreement and such ancillary documents (the “Required Reviva Stockholder Approval”), thereby approving the Merger Agreement, the Business Combination and related transactions. Therefore, no meeting of holders of Reviva will be held to obtain the Required Reviva Stockholder Approval. The Required Reviva Stockholder Approval requires the affirmative vote of the holders of shares of Reviva capital stock representing a majority of the votes represented by all outstanding shares of capital stock of Reviva entitled to vote.

 

Risk Factors

 

In evaluating the Proposals set forth in this proxy statement/prospectus, you should carefully read this proxy statement/prospectus, including the annexes, and especially consider the factors discussed in the section entitled “Risk Factors” beginning on page 37.

 

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QUESTIONS AND ANSWERS

 

Q.   Why am I receiving this proxy statement/prospectus?

 

A.   You are receiving this proxy statement/prospectus in connection with the Shareholders Meeting. Tenzing is holding the Shareholders Meeting to consider and vote upon the Proposals described below. Your vote is important. You are encouraged to vote as soon as possible after carefully reviewing this proxy statement/prospectus.

 

Tenzing’s shareholders are being asked to consider and vote upon the Domestication Proposal to change the domicile of Tenzing by way of its continuation from the British Virgin Islands, as a business company incorporated under the laws of the British Virgin Islands to Delaware to become a corporation incorporated under the laws of the State of Delaware. The Domestication will be effected by Tenzing filing a Certificate of Corporate Domestication and the Interim Charter with the Delaware Secretary of State and filing an application to de-register with the Registrar of Companies of the British Virgin Islands and all outstanding securities of Tenzing will convert to outstanding securities of the Company, as described in more detail in this proxy statement/prospectus. The form of the proposed Interim Charter of the Company is attached to this proxy statement/prospectus as Annex A. See the section entitled “The Domestication Proposal.

 

Tenzing’s shareholders are also being asked to consider and vote upon the Business Combination Proposal to approve the Merger Agreement and the Merger contemplated thereby. The Merger Agreement provides that, among other things, Tenzing’s wholly-owned subsidiary, Merger Sub, will merge with and into Reviva, with Reviva continuing as the surviving entity and becoming a subsidiary of the Company. Shareholder approval of the Merger Agreement and the transactions contemplated thereby is required by the Merger Agreement and the Memorandum and Articles of Association. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex D and Tenzing encourages its shareholders to read it in its entirety. See the section entitled “The Business Combination Proposal.”

 

Tenzing’s shareholders are also being asked to consider and vote upon the 2020 Equity Incentive Plan Proposal to adopt the 2020 Equity Incentive Plan. Among other things, the 2020 Equity Incentive Plan, which would become effective upon the completion of the Business Combination, is intended to maintain and strengthen the Company’s ability to attract and retain key employees, directors, consultants and certain other individuals providing services to the Company and to motivate them to remain focused on long-term shareholder value. See the section entitled “The 2020 Equity Incentive Plan Proposal.” A copy of the 2020 Equity Incentive Plan is attached to this proxy statement/prospectus as Annex E, and Tenzing encourages its shareholders to read the plan in its entirety.

 

Tenzing’s shareholders are also being asked to consider and vote upon each of the Charter Amendment Proposals to approve and adopt the Amended and Restated Certificate of Incorporation and the Bylaws. See the section entitled “Proposal 4: The Charter Amendment Proposals” for a summary of the material provisions of and reasons for adoption of the Amended and Restated Certificate of Incorporation and the Bylaws. A copy of the Amended and Restated Certificate of Incorporation is attached to this proxy statement/prospectus as Annex B, and a copy of the Bylaws is attached to this proxy statement/prospectus as Annex C. Tenzing encourages its shareholders to read the Amended and Restated Certificate of Incorporation and the Bylaws in their entirety.

 

Tenzing’s shareholders are also being asked to consider and vote upon the Director Election Proposal to elect five directors to serve on the Company Board from the consummation of the Domestication and Business Combination becoming effective until the 2021 annual meeting of stockholders and until their respective successors are duly elected and qualified. It is noted in this regard that the appointments of the five directors under the Director Election Proposal will take effect under the terms of the Amended and Restated Certificate of Incorporation and the Bylaws of the Company as continued into Delaware. See the section entitled “The Director Election Proposal.”

 

Tenzing’s shareholders are also being asked to consider and vote upon the Working Capital Loan Conversion Proposal to permit the Sponsor to convert an additional $500,000 of promissory notes that were issued or are issuable to evidence working capital loans made by our Sponsor into additional Private Placement Units of the Company at a price of $10.00 per unit. See the section entitled “The Working Capital Loan Conversion Proposal.”

 

Tenzing’s shareholders are also being asked to consider and vote upon the Adjournment Proposal to adjourn the Shareholders Meeting to a later date or dates, including, if necessary, including to permit further solicitation and vote of proxies if it is determined by Tenzing that more time is necessary or appropriate to approve one or more Proposals at the Shareholders Meeting. See the section entitled “The Adjournment Proposal.”

 

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The presence, in person or by proxy, of Tenzing shareholders representing a majority of the issued and outstanding ordinary shares on the Record Date and entitled to vote on the Proposals to be considered at the Shareholders Meeting will constitute a quorum for the Shareholders Meeting.

 

YOUR VOTE IS IMPORTANT. YOU ARE ENCOURAGED TO VOTE AS SOON AS POSSIBLE AFTER CAREFULLY REVIEWING THIS PROXY STATEMENT/PROSPECTUS.

 

Q:     What is being voted on at the Shareholders Meeting?

 

A:     At the Shareholders Meeting, the shareholders of Tenzing are being asked to vote on the following Proposals:

 

·        The Domestication Proposal;

 

·        The Business Combination Proposal;

 

·        The 2020 Equity Incentive Plan Proposal;

 

·        Each of the Charter Amendment Proposals;

 

·        Each of the nominees in the Director Election Proposal;

 

·        The Working Capital Loan Conversion Proposal; and

 

·        The Adjournment Proposal, if presented.

 

Q:   Are the Proposals conditioned on one another?

 

A:   Each of the Domestication Proposal, the Business Combination Proposal, the Director Election Proposal, each of the Charter Amendment Proposals and the 2020 Equity Incentive Plan Proposal is interdependent upon the others and each must be approved in order for Tenzing to complete the Business Combination contemplated by the Merger Agreement. All of the Proposals must be approved by the holders of a majority of the Tenzing Shares that are present and vote at the Shareholders Meeting.

 

Q.   Why is Tenzing proposing the Domestication?

 

A.   The Tenzing Board believes that it would be in the best interests of Tenzing to effect the Domestication to enable the Company to avoid certain taxes that would be imposed on the Company if the Company were to conduct an operating business in the United States as a foreign corporation following the Business Combination. In addition, the Tenzing Board believes Delaware provides a recognized body of corporate law that will facilitate corporate governance by the Company’s officers and directors. Delaware maintains a favorable legal and regulatory environment in which to operate. For many years, Delaware has followed a policy of encouraging companies to incorporate there and, in furtherance of that policy, has adopted comprehensive, modern and flexible corporate laws that are regularly updated and revised to meet changing business needs. As a result, many major corporations have initially chosen Delaware as their domicile or have subsequently reincorporated in Delaware in a manner similar to the procedures Tenzing is proposing. Due to Delaware’s longstanding policy of encouraging incorporation in that state and consequently its popularity as the state of incorporation, the Delaware courts have developed a considerable expertise in dealing with corporate issues and a substantial body of case law has developed construing the DGCL and establishing public policies with respect to Delaware corporations. It is anticipated that the DGCL will continue to be interpreted and explained in a number of significant court decisions that may provide greater predictability with respect to the Company’s corporate legal affairs. In connection with the Domestication, Tenzing will be filing the Interim Charter with the Secretary of State of Delaware prior to closing, which amends and removes the provisions of Tenzing’s Current Charter that terminate or otherwise become inapplicable because of the Domestications and provides Tenzing’s shareholders with the same or substantially the same rights in connection with the business combination; provided that the Interim Charter will also permit a majority of the Tenzing shareholders to act by written consent.

 

The Domestication will not occur unless the Tenzing shareholders have approved the Domestication Proposal, the Business Combination Proposal, the Charter Amendment Proposals, the Director Election Proposal and the Merger Agreement is in full force and effect prior to the Domestication.

 

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Q.    What is involved with the Domestication?

 

A.   The Domestication will require Tenzing to file certain documents in both the British Virgin Islands and the State of Delaware. At the effective time of the Domestication, Tenzing will cease to be a company incorporated under the laws of the British Virgin Islands and in connection with the Business Combination, Tenzing will continue as a Delaware. The Current Charter will be replaced by the Interim Charter and your rights as a shareholder will cease to be governed by the laws of the British Virgin Islands and will be governed by Delaware law.

 

Q.    How will the Domestication affect my securities of Tenzing?

 

A.    Pursuant to the Domestication and without further action on the part of Tenzing’s shareholders, each outstanding ordinary share of Tenzing will convert to one outstanding share of the Company’s common stock and each outstanding warrant of Tenzing will convert to one outstanding warrant of the Company. Although it will not be necessary for you to exchange your certificates representing ordinary shares and warrants after the Domestication, the Company will, upon request, exchange your Tenzing share or warrant certificates for the applicable number of shares of Company’s common stock or warrants and all certificates for securities issued after the Domestication will be certificates representing securities of the Company.

 

Q:   What changes are being made to Tenzing’s Current Charter in connection with the business combination?

 

A:   In connection with the Domestication, Tenzing will be filing the Interim Charter with the Secretary of State of the State of Delaware prior to the Closing, which amends and removes the provisions of Tenzing’s Current Charter that terminate or otherwise become inapplicable because of the Domestication and provides Tenzing’s shareholders with the same or substantially the same rights in connection with the business combination. However, the Interim Charter will provide that Tenzing’s stockholders may act by written consent of the stockholders holding a majority of the issued and outstanding shares of Tenzing common stock, which is not permitted under the Current Charter. The Amended and Restated Charter, which will be effective as of the Closing and will provide for the following: (1) change the name of Tenzing to Reviva Pharmaceuticals Holdings, Inc., (2) remove or amend those provisions of our Interim Charter which terminate or otherwise cease to be applicable following the Closing, and (3) add new provisions to our Interim Charter which will be applicable following the Closing. For a summary of the differences between the Current Charter and Interim Charter and the Interim Charter and the Amended and Restated Charter, see the sections entitled “Proposal 1: The Domestication Proposal” and “Proposal 4: The Charter Amendment Proposals.”

 

Q.   What are the material U.S. federal income tax consequences of the Domestication to U.S. Holders of Tenzing Shares?

 

A.   The Domestication 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) of the Code apply in the case of a statutory conversion of a corporation with no active business and only investment-type assets such as Tenzing, this result is subject to some uncertainty. If the Domestication qualifies as a reorganization within the meaning of Section 368(a), a U.S. Holder of Tenzing Shares will be subject to Section 367(b) of the Code and as a result:

 

·      A U.S. Holder of Tenzing Shares whose Tenzing Shares have a fair market value of less than $50,000 and who does not own actually and constructively 10% or more (by vote or value) of Tenzing on the date of the Domestication will not recognize any gain or loss and will not be required to include any part of Tenzing’s earnings in income;

 

·      A U.S. Holder of Tenzing Shares whose Tenzing Shares have a fair market value of $50,000 or more, but who on the date of the Domestication owns (actually and constructively) less than 10% of the total combined voting power or value of Tenzing will generally recognize gain (but not loss) on the exchange of Tenzing Shares for shares in the Company (a Delaware corporation) pursuant to the Domestication. As an alternative to recognizing gain, such U.S. Holders may file an election to include in income as a dividend the “all earnings and profits amounts,” (as defined in Treasury Regulation Section 1.367(b)-2(d)) attributable to their Tenzing Shares, provided certain other requirements are satisfied. Tenzing does not expect to have significant cumulative earnings and profits on the date of the Domestication; and

 

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·      A U.S. Holder of Tenzing Shares whose Tenzing Shares have a fair market value of $50,000 or more, and who on the date of the Domestication owns (actually and constructively) 10% or more of the total combined voting power or value of Tenzing will generally be required to include in income as a dividend the “all earnings and profits amount,” (as defined in Treasury Regulation Section 1.367(b)-2(d))) attributable to its Tenzing Shares, provided certain other requirements are satisfied. Tenzing does not expect to have significant cumulative earnings and profits on the date of the Domestication.

 

Furthermore, even if the Domestication qualifies as a reorganization, the Domestication may be a taxable event to U.S. Holders of Tenzing Shares under special rules applicable to U.S. Holders who hold shares of a “passive foreign investment company,” or “PFIC” as described in “Proposal 1: The Domestication Proposal — Material U.S. Federal Income Tax Consequences of the Domestication to Tenzing Shareholders — U.S. Holders — PFIC Considerations.” Tenzing believes it has been treated as a PFIC since its inception. If the Domestication should fail to qualify as a reorganization under Section 368(a), a U.S. Holder of Tenzing Shares generally would recognize gain or loss with respect to its Tenzing Shares in an amount equal to the difference, if any, between the fair market value of the corresponding Company Common Stock received in the Domestication and the U.S. Holder’s adjusted tax basis in its Tenzing Shares surrendered. For a more complete discussion of the material U.S. federal income tax consequences of the Domestication, see the discussion in the section entitled “Proposal 1: The Domestication Proposal — Material U.S. Federal Income Tax Consequences of the Domestication to Tenzing Shareholders and Warrant Holders.”

 

Q.   What are the material U.S. federal income tax consequences to U.S. Holders that exercise their Redemption Rights?

 

A.   U.S. Holders that elect to exercise their Redemption Rights generally will recognize capital gain or loss equal to the difference between the amount of cash received on the Redemption of the Tenzing Shares and such U.S. Holder’s adjusted tax basis in such Tenzing Shares, which generally will be equal to the cost of such Tenzing Shares. A U.S. Holder who purchased Tenzing Shares in the IPO generally will have a tax basis in the Tenzing Shares that were part of the units equal to the portion of the purchase price of such units allocated to the Tenzing Shares (such allocation based on the relative fair market value of the Tenzing Shares and the Warrants at the time). However, in certain circumstances, the cash paid to such U.S. Holders will be treated as dividend income for U.S. federal income tax purposes. Moreover, because Tenzing should be considered a PFIC for U.S. federal income tax purposes, such U.S. Holders may be subjected to special rules applicable to PFICs as described in “The Domestication Proposal — Material U.S. Federal Income Tax Consequences of the Domestication to Tenzing Shareholders — U.S. Holders — PFIC Considerations.” For a more complete discussion of the material U.S. federal income tax consequences to U.S. Holders that elect to exercise their Redemption Rights, see the discussion in the section entitled “The Business Combination Proposal — Material U.S. Federal Income Tax Considerations to Shareholders Exercising Redemption Rights.”

 

Q.   Why is Tenzing proposing the Business Combination?

 

A.   Tenzing was organized to effect a merger, capital stock exchange, asset acquisition or other similar business combination with one or more businesses or entities. Since Tenzing’s organization, the Tenzing Board has sought to identify suitable candidates in order to effect such a transaction. In its review of Reviva, the Tenzing Board considered a variety of factors weighing positively and negatively in connection with the Business Combination. After careful consideration, the Tenzing Board has determined that the Business Combination presents a highly-attractive business combination opportunity. The Tenzing Board believes that, based on its review and consideration, the Business Combination with Reviva presents an opportunity to increase shareholder value. However, there can be no assurance that the anticipated benefits of the Business Combination will be achieved. Shareholder approval of the Business Combination is required by the Merger Agreement and the Memorandum and Articles of Association as well as to comply with Nasdaq Listing Rule 5635(a) and (d).

 

Q.   What will happen in the Business Combination?

 

A.   The Business Combination consists of a series of transactions pursuant to which (i) Tenzing will complete the Domestication and (ii) Merger Sub will following the Domestication, merge with and into Reviva with Reviva continuing as the surviving entity and a subsidiary of the Company. Upon the completion of the Domestication and the Merger, each issued and outstanding ordinary share of Tenzing will become a share of common stock of the Company, and each issued and outstanding warrant to purchase ordinary shares of Tenzing will become a warrant to purchase an equal number of shares of common stock of the Company.

 

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Q.    What is the form of consideration that shareholders of Reviva will receive in return for the acquisition of Reviva by Tenzing?

 

A.In connection with the completion of the Merger, shareholders of Reviva will collectively receive as consideration for their existing Reviva Common Stock and Reviva Preferred Stock shares of Company Common Stock pursuant to the Merger Agreement. However, the Merger Consideration does not include any value attributable to the Assumed Warrants or Assumed Options.

 

Based on the assumptions set forth under the section entitled “Frequently Used Terms — Share Calculations and Ownership Percentages,the total number of post-Merger shares of common stock issuable to the Reviva shareholders will be approximately 5,771,934, entitling such holders collectively to exchange Reviva securities for approximately 52.12% of the Company’s common stock in the aggregate.

 

Each share of Company Common Stock will provide the holder the rights to vote, receive dividends, and share in distributions in connection with a liquidation and other stockholder rights with respect to the Company.

 

Q.    How much consideration will the holders of securities of Reviva receive in connection with the acquisition of Reviva by Tenzing?

 

A.    In connection with the completion of the Merger, the holders of securities of Reviva will collectively receive as consideration for their existing Reviva Common Stock a number of successor securities with an aggregate value equal to (the “Merger Consideration”) (a) Sixty Two Million Four Hundred Thousand ($62,400,000), plus the additional contingent right to receive the Earnout Shares after the Closing; provided however that the Merger Consideration otherwise payable to Reviva stockholders is subject to the withholding of the Escrow Shares (as defined below) and is subject to reduction for indemnification obligations. The Merger Consideration to be paid to Reviva stockholders will be paid solely by the delivery of new shares of Tenzing common stock, each valued at the Redemption Price.

 

The Merger Consideration will be allocated among Reviva Common Stockholders” and Reviva Preferred Stockholders, such that Reviva Preferred Stockholders will receive $11,000,000 in Merger Consideration (pro rata amongst them based on the number of shares of Reviva preferred stock owned) before Reviva Common Stockholders receive any Merger Consideration, and then the Reviva Common Stockholders and Reviva Preferred Stockholders will receive the remaining $51.4 million of the Merger Consideration pro rata treating the Reviva preferred stock on an as-converted to common stock basis (which is currently on a one-for one basis); provided however that the Merger Consideration otherwise payable to Reviva stockholders is subject to the withholding of the Escrow Shares (as defined below) and is subject to reduction for indemnification obligations. The Merger Consideration is not subject to any purchase price adjustments. Certain convertible promissory notes of Reviva will be required to convert into shares of Reviva common stock prior to the Closing, and will share in the Merger Consideration, as will certain obligations owed by Reviva to a broker that will be paid with Reviva common stock prior to the Closing. However, the Merger Consideration does not include any value attributable to the Assumed Warrants and Assumed Options.

 

See the section entitled, “The Business Combination Proposal — The Merger Agreement — Merger Consideration.”

 

Q.    What equity stake will current Tenzing shareholders and Reviva shareholders hold in the Company immediately after the completion of the Business Combination?

 

A.    Upon the completion of the Business Combination (assuming, among other things, that no Tenzing shareholders exercise Redemption Rights with respect to their ordinary shares upon completion of the Business Combination and the other assumptions described under the section entitled “Frequently Used Terms — Share Calculations and Ownership Percentages”), the holders of securities of Reviva are expected to own approximately 52.12% of the Company’s outstanding common stock and the current holders of Tenzing Shares are expected to own approximately 47.88% of the Company’s outstanding common stock.

 

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If any of Tenzing’s shareholders exercise their Redemption Rights, the percentage of the Company’s outstanding common stock held by the current holders of Tenzing Shares will decrease and the percentages of the Company’s outstanding common stock held by the holders of securities of Reviva will increase, in each case relative to the percentage held if none of the Tenzing Shares are redeemed.

 

All of the relative percentages above are for illustrative purposes only and are based upon certain assumptions as described in the section entitled “Frequently Used Terms — Share Calculations and Ownership Percentages.”

 

Should one or more of the assumptions prove incorrect, actual beneficial ownership percentages may vary materially from those described in this proxy statement/prospectus as anticipated, believed, estimated, expected or intended.

 

Q.    Did the Tenzing Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

 

A.    No. The Tenzing Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. Tenzing’s officers and directors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and backgrounds, together with the experience and sector expertise of Tenzing’s advisors, enabled them to make the necessary analyses and determinations regarding the Business Combination. Accordingly, investors will be relying solely on the judgment of the Tenzing Board in valuing Reviva’s business and assuming the risk that the Tenzing Board may not have properly valued such business.

 

Q.    What happens to the funds deposited in the Trust Account after completion of the Business Combination?

 

A.    After completion of the Business Combination, the funds in the Trust Account will be used to pay holders of the Public Shares who exercise Redemption Rights and, after paying the Redemptions, a portion will be used to pay, as well as to pay transaction expenses incurred in connection with the Business Combination, including deferred IPO underwriting fees to Tenzing’s investment bankers and for working capital of the Company and its subsidiaries and general corporate purposes of the Company and its subsidiaries. Such funds may also be used to reduce the indebtedness and certain other liabilities of the Company and its subsidiaries. As of September 24, 2020, there were cash and marketable securities held in the Trust Account of approximately $34.4 million. These funds will not be released until the earlier of the completion of the Business Combination or the Redemption of the Public Shares if Tenzing is unable to complete a Business Combination by December 28, 2020 (except that interest earned on the amounts held in the Trust Account may be released earlier as necessary to pay for any franchise or income taxes and up to $50,000 in liquidation expenses).

 

Q.    What happens if a substantial number of Public Shareholders vote in favor of the Merger Proposal and exercise their Redemption Rights?

 

A.    Public Shareholders may vote in favor of the Business Combination and still exercise their Redemption Rights, provided that Tenzing (without regard to any assets or liabilities of Reviva) after payment of all such Redemptions, has at least $5,000,001 in net tangible assets immediately prior to the Closing. The Business Combination may be completed even though the funds available from the Trust Account and the number of Public Shareholders is substantially reduced as a result of Redemptions by Public Shareholders. If the Business Combination is completed notwithstanding Redemptions, the Company will have fewer Public Shares and Public Shareholders, the trading market for the Company’s securities may be less liquid and the Company may not be able to meet the minimum listing standards for a national securities exchange. Furthermore, the funds available from the Trust Account for working capital purposes of the Company after the Business Combination may not be sufficient for its future operations and may not allow the Company to reduce Reviva’s indebtedness and/or pursue its strategy for growth.

 

Q.    What conditions must be satisfied to complete the Business Combination?

 

A.    Unless waived by the parties to the Merger Agreement, and subject to applicable law, the consummation of the Business Combination is subject to a number of conditions set forth in the Merger Agreement including, among others, receipt of the requisite shareholder approvals contemplated by this proxy statement/prospectus. For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination, see the section entitled, “Proposal 2: The Business Combination Proposal—The Merger Agreement—Closing Conditions.”

 

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Q.    When do you expect the Business Combination to be completed?

 

A.    It is currently expected that the Business Combination will be completed in November 2020. This timing depends, among other things, on the approval of the Proposals to be presented at the Shareholders Meeting. However, such meeting could be adjourned if the Adjournment Proposal is adopted at the Shareholders Meeting and Tenzing elects to adjourn the Shareholders Meeting to a later date or dates to permit further solicitation and vote of proxies if reasonably determined to be necessary or desirable by Tenzing.

 

Q.    Will Tenzing enter into any financing arrangements in connection with the Business Combination?

 

A.Tenzing may enter into certain backstop arrangements and/or private placements of equity securities of Tenzing which Reviva has consented to. As the amount of any such equity issuances is not currently known, Tenzing cannot provide exact figures as to percentage ownership that may result therefrom. If Tenzing enters into a binding commitment in respect of any such additional equity financing, Tenzing will file a Current Report on Form 8-K with the SEC to disclose details of any such equity financing.

 

Q.    Why is Tenzing proposing the 2020 Equity Incentive Plan Proposal?

 

A.    The purpose of the 2020 Equity Incentive Plan is to enable the Company to offer eligible employees, directors and consultants cash and stock-based incentive awards in order to attract, retain and reward these individuals and strengthen the mutuality of interests between them and the Company’s stockholders. For more information, see the section entitled “The 2020 Equity Incentive Plan Proposal.”

 

Q.    Why is Tenzing proposing the Charter Amendment Proposals?

 

A.    Tenzing is proposing the Charter Amendment Proposals to (1) change the name of Tenzing to Reviva Pharmaceuticals Holdings, Inc., (2) remove those provisions of the Interim Charter which terminate or otherwise cease to be applicable following the closing of the Business Combination, and (3) adopt the Amended and Restated Certificate of Incorporation and Bylaws which will be applicable following the Domestication and the closing of the Business Combination. For a summary of the material provisions of and reasons for adoption of the Certificate of Incorporation and the Amended and Restated Bylaws, see the section entitled “Proposal 4: The Charter Amendment Proposals.”

 

Q.    Why is Tenzing proposing the Director Election Proposal?

 

A. Pursuant the Merger Agreement, Tenzing and Reviva have agreed that the initial Company Board following the completion of the Business Combination be comprised of five individuals. Purav Patel, Laxminarayan Bhat and Les Funtleyder, designated by Reviva, and Richard Margolin and Parag Saxena, designated by Tenzing, will serve as directors from the Domestication and Business Combination becoming effective for terms expiring at the Company’s annual meeting in 2021. The Director Election Proposal is being presented to implement the requirement of the Merger Agreement to install the Company Board. It is noted in this regard that the appointments of the five directors under the Director Election Proposal will take effect under the terms of the Amended and Restated Certificate of Incorporation and the Bylaws of the Company as continued into Delaware.

 

Q.   Why is Tenzing proposing the Working Capital Loan Conversion Proposal?

 

A. Tenzing is proposing the Working Capital Loan Conversion Proposal to permit our Sponsor to convert an additional $500,000 of promissory notes that were issued or are issuable to evidence working capital loans made by our Sponsor into additional Private Placement Units of the Company at a price of $10.00 per unit. A summary of the Working Capital Loan Conversion. Proposal is set forth in the section entitled “Proposal 6: The Working Capital Loan Conversion Proposal” of this proxy statement/prospectus. Tenzing believes that permitting the Sponsor to convert more than $1,500,000 of promissory notes into additional Private Placement Units incentivizes the Sponsor to provide additional capital to Tenzing. The conversion of the working capital loans would also reduce the balance sheet liabilities of Tenzing.

 

Q.   Why is Tenzing proposing the Adjournment Proposal?

 

A.    Tenzing is proposing the Adjournment Proposal to allow the adjournment of the Shareholders Meeting to a later date or dates, including if necessary to permit further solicitation and vote of proxies if it is determined by Tenzing that more time is necessary or appropriate to approve one or more Proposals at the Shareholders Meeting.

 

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Q.    When and where will the Shareholders Meeting be held?

 

A.    The Shareholders Meeting will be held at 9:00 a.m. Eastern Time on [●], 2020 at the offices of Ellenoff Grossman & Schole LLP, at 1345 Avenue of the Americas, 11th Floor, New York, New York 10105. Only shareholders who held ordinary shares of Tenzing at the close of business on [●], 2020 will be entitled to attend and vote at the Shareholders Meeting and at any adjournments and postponements thereof.

 

Q.    Who is entitled to vote at the Shareholders Meeting?

 

A.    Tenzing has fixed [●], 2020 as the Record Date. If you were a shareholder of Tenzing at the close of business on the Record Date, you are entitled to vote on matters that come before the Shareholders Meeting. However, a shareholder may only vote his, her or its shares if he, she or it is present in person or is represented by proxy at the Shareholders Meeting.

 

Q.    How do I vote?

 

A.    If you are a record owner of your shares, there are two ways to vote your Tenzing Shares at the Shareholders Meeting:

 

You Can Vote By Signing and Returning the Enclosed Proxy Card.    If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted as recommended by the Tenzing Board “FOR” the Domestication Proposal, the Business Combination Proposal, the 2020 Equity Incentive Plan Proposal, each of the Charter Amendment Proposals, the election of each of the director nominees pursuant to the Director Election Proposal, the Working Capital Loan Conversion Proposal, and the Adjournment Proposal (if presented). Votes received after a matter has been voted upon at the Shareholders Meeting will not be counted.

 

You Can Attend the Shareholders Meeting and Vote in Person. When you arrive, you will receive a ballot that you may use to cast your vote.

 

If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. If you wish to attend the Shareholders Meeting and vote in person and your shares are held in “street name,” you must obtain a legal proxy from your broker, bank or nominee. That is the only way Tenzing can be sure that the broker, bank or nominee has not already voted your shares.

 

Q:    What if I do not vote my Tenzing Shares or if I abstain from voting?

 

A:    The approval of the Domestication Proposal, the Business Combination Proposal, the 2020 Equity Incentive Plan Proposal, the Charter Amendment Proposals, the Director Election Proposal, the Working Capital Loan Conversion Proposal, and the Adjournment Proposal, if presented, requires the affirmative vote of a majority of the outstanding Tenzing Shares as of the Record Date that are present and vote at the Shareholders Meeting. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, are not treated as votes cast. As a result, if you abstain from voting on the Proposals, your Tenzing Shares will be counted as present for purposes of establishing a quorum (if so present in accordance with the terms of the Memorandum and Articles of Association), but will not be counted as votes cast.

 

Q:    What Proposals must be passed in order for the Business Combination to be completed?

 

A:    The Business Combination will not be completed unless the Domestication Proposal, the Business Combination Proposal, the 2020 Equity Incentive Plan Proposal, the Charter Amendment Proposals, and the Director Election Proposal, are approved. If Tenzing does not complete a business combination by December 28, 2020, Tenzing will be required to dissolve and liquidate itself and return the monies held within its Trust Account to its Public Shareholders unless Tenzing submits and its shareholders approve an extension.

 

Q:    How does the Tenzing Board recommend that I vote on the Proposals?

 

A:    The Tenzing Board unanimously recommends that the shareholders of Tenzing entitled to vote on the Proposals, vote as follows:

 

“FOR” approval of the Domestication Proposal;

 

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“FOR” approval of the Business Combination Proposal;

 

“FOR” approval of the 2020 Equity Incentive Plan Proposal;

 

FOR” approval of each of the Charter Amendment Proposals;

 

“FOR” approval of the election of each of the director nominees pursuant to the Director Election Proposal;

 

“FOR” approval of the Working Capital Loan Conversion Proposal; and

 

“FOR” approval of the Adjournment Proposal, if presented;

 

Q:    How many votes do I have?

 

A:    Tenzing shareholders have one vote per each ordinary share of Tenzing held by them on the Record Date for the Shareholders Meeting.

 

Q.    How will the Sponsor and Tenzing’s officers and directors vote in connection with the Proposals?

 

A. As of the Record Date, the Sponsor owned of record an aggregate of 1,581,250 Founder Shares, representing 30.9% of the issued and outstanding Tenzing Shares. Pursuant to the Insider Letter Agreement, the Sponsor and Tenzing’s directors and officers have agreed to vote the ordinary shares owned by them (including the Founder Shares) in favor of the Proposals. The Sponsor and Tenzing’s officers and directors, as of the Record Date, have not acquired any Tenzing ordinary shares during or after its IPO in the open market. However, any subsequent purchases of Tenzing ordinary shares prior to the Record Date by the Sponsor or Tenzing’s officers and directors in the aftermarket will make it more likely that the Proposals will be approved as such shares would be voted in favor of the Proposals.

 

Q.    Do I have Redemption Rights with respect to my Tenzing Shares?

 

A.    Under Section 23.5 of the Memorandum and Articles of Association, prior to the completion of the Business Combination, Tenzing will provide all of the Public Shareholders with the opportunity to have their shares redeemed upon the completion of the Business Combination, subject to certain limitations, for cash equal to the applicable Redemption Price; provided, however, that Tenzing may not redeem such shares to the extent that such Redemption would result in Tenzing having net tangible assets (as determined under the Exchange Act) of less than $5,000,001 upon the completion of the Business Combination.

 

Public Shareholders may seek to have their shares redeemed regardless of whether they vote for or against the Business Combination, whether or not they were holders of Tenzing ordinary shares as of the Record Date or acquired their shares after the Record Date. The Redemptions will be effectuated in accordance with the Memorandum and Articles of Association and British Virgin Islands law. Any Public Shareholder who holds ordinary shares of Tenzing on or before [●], 2020 (two business days before the Shareholders Meeting) will have the right to demand that his, her or its shares be redeemed for a pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid, at the completion of the Business Combination); provided that such Public Shareholders follow the procedures provided for exercising such Redemption as set forth in the Memorandum and Articles of Association, as described below, by such date. However, the proceeds held in the Trust Account could be subject to claims that could take priority over those of Public Shareholders exercising Redemption Rights, regardless of whether such holders vote for or against the Business Combination Proposal and whether such holders are holders of Tenzing ordinary shares as of the Record Date. Therefore, the per-share distribution from the Trust Account in such a situation may be less than originally anticipated due to such claims. A Public Shareholder will be entitled to receive cash for these shares only if the Business Combination is completed.

 

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Q:    May the Sponsor, Tenzing’s directors, officers, advisors or their affiliates purchase shares in connection with the Business Combination?

 

A:    The Sponsor and Tenzing’s directors, officers, advisors or their affiliates may purchase Tenzing Shares in privately negotiated transactions or in the open market either prior to or after the Closing of the Business Combination, including from Tenzing shareholders who would have otherwise exercised their Redemption Rights. However, the Sponsor, directors and officers have no current commitments or plans to engage in such transactions and have not formulated any terms or conditions for any such transactions at the date of this proxy statement/prospectus. If Tenzing engages in such transactions, any such purchases will be subject to limitations regarding possession of any material nonpublic information not disclosed to the seller of such shares and they will not make any such purchases if such purchases are prohibited by Regulation M under the Exchange Act. Any such purchase after the Record Date would include a contractual acknowledgement that the selling shareholder, although still the record holder of Tenzing Shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its Redemption Rights. In the event the Sponsor or Tenzing’s directors, officers or 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. Any such privately negotiated purchases may be effected at purchase prices that are in excess of the per-share pro rata portion of the aggregate amount then on deposit in the Trust Account.

 

Pursuant to the Insider Letter Agreement, the Sponsor and Tenzing’s directors and officers have agreed to waive their Redemption Rights with respect to the Founder Shares and Private Placement Shares owned by the Sponsor and any Public Shares purchased during or after the IPO in connection with the consummation of the Business Combination. However, if the Sponsor or Tenzing’s directors, officers and their affiliates acquired Public Shares in or after the IPO (or acquire Public Shares following the date of this proxy statement/prospectus), they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if Tenzing fails to complete a Business Combination by September 28, 2020.

 

Q.    Is there a limit on the number of shares I may redeem?

 

A.    Each Public Shareholder, together with any affiliate or any other person with whom such Public Shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking Redemption Rights with respect to 20% or more of the Public Shares. Accordingly, any shares held by a Public Shareholder or “group” in excess of such 20% cap will not be redeemed by Tenzing. Any Public Shareholder who holds less than 20% of the Public Shares may have all of the Public Shares held by him or her redeemed for cash.

 

Q.    How do I exercise my Redemption Rights?

 

A.    If you are a Public Shareholder and you seek to have your shares redeemed, you must (i) demand, no later than 5:00 p.m., Eastern time on [●], 2020 (two (2) business days before the Shareholders Meeting), that Tenzing redeem your shares into cash; (ii) affirmatively certify in your request to Tenzing’s Transfer Agent for Redemption if you “ARE” or “ARE NOT” acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) and (iii) submit your request in writing to Tenzing’s Transfer Agent, at the address listed at the end of this section and deliver your shares to Tenzing’s Transfer Agent physically or electronically using The Depository Trust Company’s DWAC system at least two business days prior to the vote at the Shareholders Meeting.

 

Any request for Redemption, once made by a Public Shareholder, may be withdrawn at least two (2) business days before the vote is taken with respect to the Business Combination Proposal at the Shareholders Meeting. In addition, if you deliver your shares for Redemption to Tenzing’s Transfer Agent and later decide prior to the Shareholders Meeting not to elect Redemption, you may request that Tenzing’s Transfer Agent return the shares (physically or electronically). You may make such request by contacting Tenzing’s Transfer Agent at the phone number or address listed at the end of this section.

 

Any corrected or changed written demand of Redemption Rights must be received by Tenzing’s secretary two business days prior to the vote taken on the Business Combination Proposal at the Shareholders Meeting. No demand for Redemption will be honored unless the holder’s shares have been delivered (either physically or electronically) to the Transfer Agent at least two business days prior to the vote at the Shareholders Meeting.

 

Public Shareholders seeking to exercise their Redemption Rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the Transfer Agent and time to effect delivery. It is Tenzing’s understanding that shareholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, Tenzing does not have any control over this process and it may take longer than two weeks. Shareholders who hold their shares in street name will have to coordinate with their banks, brokers or other nominees to have the shares certificated or delivered electronically. There is a cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC system. The Transfer Agent will typically charge a nominal fee to the tendering broker and it would be up to the broker whether or not to pass this cost on to the redeeming shareholder. In the event the Business Combination is not completed, this may result in an additional cost to shareholders for the return of their shares.

 

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If a Public Shareholder properly demands Redemption as described above, then, if the Business Combination is completed, Tenzing will redeem the shares subject to the Redemptions for cash. Such amount will be paid promptly after completion of the Business Combination. If you exercise your Redemption Rights, then you will be exchanging your Tenzing Shares for cash and will no longer own these shares following the Business Combination.

 

If you are a Public Shareholder and you exercise your Redemption Rights, it will not result in either the exercise or loss of any Tenzing warrants that you may hold. Your Tenzing warrants will continue to be outstanding following a Redemption of your Tenzing Shares and will become exercisable in connection with the completion of the Business Combination.

 

If you intend to seek Redemption of your Public Shares, you will need to deliver your shares (either physically or electronically) to Tenzing’s Transfer Agent prior to the Shareholders Meeting, as described in this proxy statement/prospectus. If you have questions regarding the certification of your position or delivery of your shares, please contact:

 

Continental Stock Transfer & Trust Company

One State Street, 30th Floor

New York, New York 10004

Attention: Mark Zimkind

E-mail: mzimkind@continentalstock.com

 

Q.    What happens if the Business Combination is not completed?

 

A.    If a Public Shareholder has tendered shares to be redeemed but the Business Combination is not completed, the Redemptions will be canceled and the tendered shares will be returned to the relevant Public Shareholders as appropriate. The current deadline set forth in the Memorandum and Articles of Association for Tenzing to complete its initial Business Combination is September 28, 2020.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

Introduction

 

Tenzing is providing the following unaudited pro forma combined financial information to aid you in your analysis of the financial aspects of the Business Combination.

 

The unaudited pro forma combined balance sheet as of May 31, 2020 gives pro forma effect to the Business Combination as if it had been consummated as of that date. The unaudited pro forma combined statements of operations for the three months ended May 31, 2020 and for the year ended February 29, 2020 give pro forma effect to the Business Combination as if it had occurred as of the earliest period presented. This information should be read together with Reviva’s and Tenzing’s respective audited and unaudited financial statements and related notes, “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Reviva,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Tenzing” and other financial information included elsewhere in this proxy statement.

 

The unaudited pro forma combined balance sheet as of May 31, 2020 has been prepared using the following:

 

  Reviva’s unaudited historical condensed consolidated balance sheet as of June 30, 2020, as included elsewhere in this proxy statement; and

 

  Tenzing’s unaudited historical condensed balance sheet as of May 31, 2020, as included elsewhere in this proxy statement.

 

The unaudited pro forma combined statement of operations for the three months ended May 31, 2020 has been prepared using the following:

 

  Reviva’s unaudited historical condensed consolidated statement of operations for the six months ended June 30, 2020, as included elsewhere in this proxy statement; and

 

  Tenzing’s unaudited historical condensed statement of operations for the three months ended May 31, 2020, as included elsewhere in this proxy statement.

 

The unaudited pro forma combined statement of operations for the year ended February 29, 2020 has been prepared using the following:

 

  Reviva’s audited historical consolidated statement of operations for the year ended December 31, 2019, as included elsewhere in this proxy statement; and

 

  Tenzing’s audited historical statement of operations for the year ended February 29, 2020, as included elsewhere in this proxy statement.

 

Description of the Transactions

 

On July 20, 2020, Tenzing entered into the Merger Agreement. Pursuant to the Merger Agreement, subject to the terms and conditions set forth therein, (i) prior to the Closing, Tenzing will consummate the Domestication, and (ii) upon the Closing, Merger Sub will merge with and into Reviva, with Reviva continuing as the surviving corporation in the Merger and a wholly-owned subsidiary of Tenzing (after itsdomestication to Delaware).

  

28

 

 

The aggregate merger consideration to be paid pursuant to the Merger Agreement to Reviva shareholders will be an amount equal to the Merger Consideration, plus the additional contingent right to receive the Earnout Shares after the Closing, as described below. The Merger Consideration to be paid to Reviva stockholders will be paid solely by the delivery of new shares of the Company’s common stock, each valued at the Redemption Price.

 

In addition to the Merger Consideration set forth above, the Reviva Stockholders will also have a contingent right to receive the Earnout Shares after the Closing based on the stock price performance of the Company’s common stock and the achievement by Reviva of certain clinical trial milestones during the Earnout Period.

 

For more information about the Business Combination, please see the section entitled “Proposal 1: The Business Combination Proposal.” A copy of the Merger Agreement is attached to the accompanying proxy statement as Annex A.

 

Accounting for the Business Combination

 

The Business Combination will be accounted for as a reverse merger in accordance with U.S. GAAP. Under this method of accounting, Tenzing will be treated as the “acquired” company for financial reporting purposes. This determination was primarily based on the holders of Reviva expecting to have a majority of the voting power of the post-combination company, Reviva senior management comprising substantially all of the senior management of the post-combination company, the relative size of Reviva compared to Tenzing, and Reviva operations comprising the ongoing operations of the post-combination company. Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of Reviva issuing stock for the net assets of Tenzing, accompanied by a recapitalization. The net assets of Tenzing will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of Reviva.

 

Basis of Pro Forma Presentation

 

The historical financial information has been adjusted to give pro forma effect to events that are related and/or directly attributable to the Business Combination, are factually supportable, and as it relates to the unaudited pro forma combined statement of operations, are expected to have a continuing impact on the results of the post-combination company. The adjustments presented on the unaudited pro forma combined financial statements have been identified and presented to provide relevant information necessary for an accurate understanding of the post-combination company upon consummation of the Business Combination.

 

The unaudited pro forma combined financial information is for illustrative purposes only. The financial results may have been different had the companies always been combined. You should not rely on the unaudited pro forma combined financial information as being indicative of the historical financial position and results that would have been achieved had the companies always been combined or the future financial position and results that the post-combination company will experience. Reviva and Tenzing have not had any historical relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

 

There is no historical activity with respect to Merger Sub, and accordingly, no adjustments were required with respect to this entity in the pro forma combined financial statements.

 

29

 

 

The unaudited pro forma combined financial information has been prepared assuming two alternative levels of redemption into cash of Tenzing ordinary shares:

 

  Scenario 1 — Assuming no redemptions for cash: This presentation assumes that no Tenzing shareholders exercise redemption rights with respect to their ordinary shares upon consummation of the Business Combination; and

 

  Scenario 2 — Assuming redemptions of 2,002,460 ordinary shares for cash: This presentation assumes that Tenzing shareholders exercise their redemption rights with respect to a maximum of 2,002,460 ordinary shares upon consummation of the Business Combination at a redemption price of approximately $10.81 per share. The maximum redemption amount is derived so that there is a minimum net tangible asset value of $5,000,001, after giving effect to the payments to redeeming shareholders. Scenario 2 includes all adjustments contained in Scenario 1 and presents additional adjustments to reflect the effect of the maximum redemptions.

   

Included in the shares outstanding and weighted average shares outstanding as presented in the pro forma combined financial statements are 5,771,934 shares of common stock to be issued to Reviva stockholders in connection with the Merger Agreement.

 

As a result of the Business Combination and immediately following the closing of the Business Combination, assuming no Tenzing shareholders elect to redeem their shares for cash, Reviva will own approximately 52.1% of the outstanding Company common stock and the former shareholders of Tenzing will own approximately 47.9% of the outstanding Company common stock, as of May 31, 2020 (in each case, not giving effect to any shares issuable to them upon the exercise of warrants).

 

If 2,002,460 ordinary shares are redeemed for cash, which assumes the maximum redemption of Tenzing ordinary shares providing for a minimum net tangible asset value of $5,000,001, after giving effect to payments to redeeming shareholders, Reviva will own approximately 63.6% of the outstanding Company common stock and Tenzing former shareholders will own approximately 36.4% of the outstanding Company common stock, as of May 31, 2020 (in each case, not giving effect to any shares issuable to them upon the exercise of warrants).

 

As the issuance of the additional 1,000,000 shares of common stock is contingent on the future performance of the trading price of the common stock and the achievement by Reviva of certain clinical trial milestones, they have been classified as an equity arrangement and therefore have not been recorded in the unaudited pro forma combined financial statements.

 

30

 

 

PRO FORMA COMBINED BALANCE SHEET
AS OF MAY 31, 2020
(UNAUDITED)

 

                Scenario 1
Assuming No
Redemptions into Cash
    Scenario 2
Assuming Maximum
Redemptions into Cash
 
    (A)
Reviva
    (B)
Tenzing
    Pro Forma
Adjustments
    Pro Forma
Combined
    Pro Forma
Adjustments
    Pro Forma
Combined
 
Assets                                                
Current assets:                                                
Cash   $ 194,798     $ 197,983     $ 334,080 (1)                        
                      34,535,125 (2)                        
                      (4,900,000 )(4)   $ 30,361,986     $ (21,648,463 )(5)   $ 8,713,523  
Prepaid expenses and other current assets     7,019       41,708       -       48,727       -       48,727  
Total Current Assets     201,817       239,691       29,969,205       30,410,713       (21,648,463 )     8,762,250  
Marketable securities held in Trust Account     -       34,219,205       315,920 (1)                        
                      (34,535,125 )(2)     -       -       -  
Property and equipment, net     269       -       -       269       -       269  
Non-current assets     1,816       -       -       1,816       -       1,816  
Total Assets   $ 203,902     $ 34,458,896     $ (4,250,000 )   $ 30,412,798     $ (21,648,463 )   $ 8,764,335  
                                                 
Liabilities and Shareholders' Equity                                                
Current liabilities:                                                
Accounts payable and accrued expenses   $ 4,192,154     $ 501,261     $ (977,567 )(4)   $ 3,715,848     $ -     $ 3,715,848  
Contingent warrant, net     48,486       -       -       48,486       -       48,486  
Convertible promissory notes, net     4,375,087       -       (4,375,087 )(6)     -       -       -  
Total Current Liabilities     8,615,727       501,261       (5,352,654 )     3,764,334       -       3,764,334  
Convertible promissory notes - related party     -       1,125,000       650,000 (1)                        
                      (1,775,000 )(3)     -       -       -  
Deferred underwriting fees     -       2,213,750       (2,213,750 )(4)     -       -       -  
Total Liabilities     8,615,727       3,840,011       (8,691,404 )     3,764,334       -       3,764,334  
                                                 
Commitments and Contingencies                                                
                                                 
Ordinary shares subject to redemption     -       25,618,883       (25,618,883 )(5)     -       -       -  
                                                 
Stockholders’ Equity                                                
Ordinary shares     -       3,963,734       1,775,000 (3)                        
                      25,618,883 (5)                        
                      53,126,630 (6)                        
                      (84,484,247 )(7)     -               -  
Preferred stock     29,069,974       -       (29,069,974 )(6)     -       -       -  
Common stock     618       -       (618 )(6)                        
                      1,107 (7)     1,107       (200 )(7)     907  
Additional paid-in capital     18,644,683       -       (18,644,683 )(6)             (21,648,463 )(5)        
                      84,483,140 (7)     84,483,140       200 (7)     62,834,877  
Retained earnings (Accumulated deficit)     (56,127,100 )     1,036,268       (1,708,683 )(4)                        
                      (1,036,268 )(6)     (57,835,783 )     -       (57,835,783 )
Total Stockholders' Equity     (8,411,825 )     5,000,002       30,060,287       26,648,464       (21,648,463 )     5,000,001  
Total Liabilities and Stockholders’ Equity   $ 203,902     $ 34,458,896     $ (4,250,000 )   $ 30,412,798     $ (21,648,463 )   $ 8,764,335  

 

31

 

 

Pro Forma Adjustments to the Unaudited Combined Balance Sheet

 

  (A) Derived from the unaudited condensed consolidated balance sheet of Reviva as of June 30, 2020. See Reviva’s financial statements and the related notes appearing elsewhere in this proxy statement.

 

  (B) Derived from the unaudited condensed balance sheet of Tenzing as of May 31, 2020. See Tenzing’s financial statements and the related notes appearing elsewhere in this proxy statement.

 

  (1) Reflects the additional funding of $315,920 received to extend the time by which the Company has to consummate a Business Combination to October 28, 2020 and working capital loans in the amount of $334,080.

 

  (2) Reflects the release of cash from marketable securities held in the trust account.

 

  (3) Reflects the conversion of promissory notes in the aggregate amount of $1,775,000 due to the Sponsor into 177,500 Private Placement Units at $10.00 per unit.

  

  (4) Reflects the payment of fees and expenses related to the Business Combination, including $977,567 of accounts payable and accrued expenses directly attributable to the Business Combination, the deferred underwriting fee of $2,213,750 and legal, financial advisory, accounting and other professional fees of $1,708,683. The direct, incremental costs of the Business Combination related to the legal, financial advisory, accounting and other professional fees of approximately $1,708,683 is reflected as an adjustment to accumulated deficit and is not shown as an adjustment to the statement of operations since it is a nonrecurring charge resulting directly from the Business Combination.

 

  (5) In Scenario 1, which assumes no Tenzing shareholders exercise their redemption rights, the ordinary shares subject to redemption for cash amounting to $25,618,883 would be transferred to permanent equity. In Scenario 2, which assumes the same facts as described in Items 1 through 4 above, but also assumes the maximum number of shares are redeemed for cash by the Tenzing shareholders, $21,648,463 would be paid out in cash. The $21,648,463, or 2,002,460 ordinary shares, represents the maximum redemption amount, assuming a minimum net tangible asset value of $5,000,001, after giving effect to payments to redeeming shareholders based on a consummation of the Business Combination on May 31, 2020.

 

  (6) Reflects the recapitalization of Tenzing through (a) the contribution of all the share capital in Reviva to Tenzing in the amount of $47,715,275, (b) the conversion of convertible promissory notes into common stock in the amount of $4,375,087, (c) the issuance of 5,771,934 newly issued shares of common stock in connection with the Business Combination and (d) the elimination of the historical retained earnings of Tenzing, the legal acquiree.

 

  (7) Reflects the conversion of ordinary shares into shares of common stock upon the re-domestication of Tenzing from the British Virgin Islands to the State of Delaware.

  

32

 

 

PRO FORMA COMBINED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MAY 31, 2020
(UNAUDITED)

 

                Scenario 1
Assuming No
Redemptions into Cash
    Scenario 2
Assuming Maximum
Redemptions into Cash
 
    (A)
Reviva
    (B)
Tenzing
    Pro Forma
Adjustments
    Pro Forma
Combined
    Pro Forma
Adjustments
    Pro Forma
Combined
 
Research and development   $ 36,471     $ -     $ -     $ 36,471     $ -     $ 36,471  
General and administrative     740,913       264,941       (884,252 )(1)     121,602       -       121,602  
Operating loss     (777,384 )     (264,941 )     884,252       (158,073 )     -       (158,073 )
                                                 
Other income (expense):                                                
Interest income     25,004       109,175       (109,175 )(2)     25,004       -       25,004  
Interest expense     (99,053 )     -       -       (99,053 )     -       (99,053 )
Loss before income taxes     (851,433 )     (155,766 )     775,077       (232,122 )     -       (232,122 )
Provision for income taxes     -       -       - (3)     -       -       -  
Net loss   $ (851,433 )   $ (155,766 )   $ 775,077     $ (232,122 )   $ -     $ (232,122 )
                                                 
Weighted average shares outstanding, basic and diluted             2,704,587       8,369,278 (4)     11,073,865       (2,002,460 )(4)     9,071,405  
Basic and diluted net loss per share           $ (0.09 )           $ (0.02 )           $ (0.03 )

 

33

 

 

PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED FEBRUARY 29, 2020
(UNAUDITED)

 

                Scenario 1
Assuming No
Redemptions into Cash
    Scenario 2
Assuming Maximum
Redemptions into Cash
 
    (C)
Reviva
    (D)
Tenzing
    Pro Forma
Adjustments
    Pro Forma
Combined
    Pro Forma
Adjustments
    Pro Forma
Combined
 
Research and development   $ 195,744     $ -     $ -     $ 195,744     $ -     $ 195,744  
General and administrative     181,116       724,740       -       905,856       -       905,856  
Operating loss     (376,860 )     (724,740 )     -       (1,101,600 )     -       (1,101,600 )
                                                 
Other income (expense):                                                
Interest income     201       1,323,935       (1,323,935 )(2)     201       -       201  
Unrealized gain on marketable securities     -       18,708       (18,708 )(2)     -       -       -  
Interest expense     (469,373 )     -       -       (469,373 )     -       (469,373 )
Loss before income taxes     (846,032 )     617,903       (1,342,643 )     (1,570,772 )     -       (1,570,772 )
Provision for income taxes     800       -       - (3)     800       -       800  
Net loss   $ (846,832 )   $ 617,903     $ (1,342,643 )   $ (1,571,572 )   $ -     $ (1,571,572 )
                                                 
Weighted average shares outstanding, basic and diluted             2,610,315       8,463,550 (4)     11,073,865       (2,002,460 )(4)     9,071,405  
Basic and diluted net loss per share           $ (0.21 )           $ (0.14 )           $ (0.17 )

  

34

 

 

Pro Forma Adjustments to the Unaudited Combined Statements of Operations

 

  (A) Derived from the unaudited condensed consolidated statement of operations of Reviva for the three months ended June 30, 2020. See Reviva’s financial statements and the related notes appearing elsewhere in this proxy statement.

 

  (B) Derived from the unaudited condensed statement of operations of Tenzing for the three months ended May 31, 2020. See Tenzing’s financial statements and the related notes appearing elsewhere in this proxy statement.

 

  (C) Derived from the audited consolidated statement of operations of Reviva for the year ended December 31, 2019. See Reviva’s financial statements and the related notes appearing elsewhere in this proxy statement.

 

  (D) Derived from the audited statement of operations of Tenzing for the year ended February 29, 2020. See Tenzing’s financial statements and the related notes appearing elsewhere in this proxy statement.

 

  (1) Represents an adjustment to eliminate direct, incremental costs of the Business Combination which are reflected in the historical financial statements of Reviva and Tenzing in the amount of $696,329 and $187,923, respectively, for the three months ended June 30, 2020 and May 31, 2020, respectively. There were no such amounts recorded for the year ended December 31, 2019 for Reviva and February 29, 2020 for Tenzing.

 

  (2) Represents an adjustment to eliminate interest income and unrealized gain on marketable securities held in the trust account as of the beginning of the period.

 

  (3) To record normalized blended statutory income tax benefit rate of 21% for pro forma financial presentation purposes resulting in the recognition of an income tax benefit, which however, has been offset by a full valuation allowance as the combined company expects to incur continuing losses.

 

  (4) The calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that Tenzing’s initial public offering occurred as of the earliest period presented. In addition, as the Business Combination is being reflected as if it had occurred on this date, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares have been outstanding for the entire period presented. This calculation is retroactively adjusted to eliminate the number of shares redeemed in the Business Combination for the entire period.

 

The following presents the calculation of basic and diluted weighted average ordinary shares outstanding. The computation of diluted loss per share excludes the effect of 6,861,313 warrants to purchase 6,861,313 shares of common stock, because the inclusion of these securities would be anti-dilutive.

 

    Scenario 1
Combined
(Assuming
No
Redemptions
Into Cash)
    Scenario 2
Combined
(Assuming
Maximum
Redemptions
Into Cash)
 
Weighted average shares calculation, basic and diluted                
Tenzing public shares     3,184,368       1,181,908  
Tenzing Sponsor shares     2,117,563       2,117,563  
Tenzing shares issued in the Business Combination     5,771,934       5,771,934  
Weighted average shares outstanding     11,073,865       9,071,405  
Percent of shares owned by Reviva     52.1 %     63.6 %
Percent of shares owned by Tenzing     47.9 %     36.4 %

 

35

 

 

COMPARATIVE SHARE INFORMATION

 

The following table sets forth the historical comparative share information for Reviva and Tenzing on a stand-alone basis and the unaudited pro forma combined per share information after giving effect to the Business Combination, (1) assuming no Tenzing shareholders exercise redemption rights with respect to their ordinary shares upon the consummation of the Business Combination; and (2) assuming that Tenzing shareholders exercise their redemption rights with respect to a maximum of 2,002,460 ordinary shares upon consummation of the Business Combination.

 

The historical information should be read in conjunction with the information in the sections entitled “Selected Historical Financial Information of Tenzing” and “Selected Historical Consolidated Financial and Other Data of Reviva” and the historical financial statements of Tenzing and Reviva  incorporated by reference in or included elsewhere in this proxy statement. The unaudited pro forma condensed combined per share information is derived from, and should be read in conjunction with, the information contained in the section of this proxy statement entitled “Unaudited Pro Forma Condensed Combined Financial Information.”

 

The unaudited pro forma combined share information below does not purport to represent what the actual results of operations or the earnings per share would been had the companies been combined during the periods presented, nor to project the Company’s results of operations or earnings per share for any future date or period. The unaudited pro forma combined shareholders’ equity per share information below does not purport to represent what the value of Tenzing and Reviva would have been had the companies been combined during the periods presented.

 

    Reviva     Tenzing    

Pro Forma
Combined
Assuming

No

Redemptions

into Cash

   

Pro Forma
Combined
Assuming
Maximum Redemptions

into Cash

 
Three Months Ended June 30, 2020 (Reviva) and Three Months Ended May 31, 2020 (Tenzing)                                
Net loss   $ (851,433 )   $ (155,766 )   $ (232,122 )   $ (232,122 )
Stockholders’ (deficit) equity     (8,411,825 )     5,000,002       26,648,464       5,000,001  
Weighted average shares outstanding — basic and diluted             2,704,587       11,073,865       9,071,405  
Basic and diluted net loss per share             (0.09 )     (0.02 )     (0.03 )
Shareholders’ equity per share — basic and diluted             1.85       2.41       0.55  

 

    Reviva     Tenzing    

Pro Forma
Combined
Assuming

No

Redemptions

into Cash

   

Pro Forma
Combined
Assuming
Maximum
Redemptions

into Cash

 
Year Ended December 31, 2019 (Reviva) and Year Ended February 29, 2020 (Tenzing)                                
Net (loss) income   $ (846,832 )   $ 617,903     $ (1,571,572 )   $ (1,571,572 )
Weighted average shares outstanding — basic and diluted           $ 2,610,315     $ 11,073,865       9,071,405  
Basic and diluted net (loss) income per share           $ (0.21 )   $ (0.14 )   $ (0.17 )

 

36

 

 

RISK FACTORS

 

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

 

The value of your investment following the completion of the Business Combination will be subject to significant risks affecting, among other things, the Company’s business, financial condition and results of operations. If any of the events described below occur, the Company’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 Company’s securities 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 Tenzing and Reviva.

 

Throughout this section, references to the “Company” refer to the Company and its consolidated subsidiaries as the context so requires.

 

Risks Related to the Domestication and the Business Combination

 

Tenzing’s shareholders will experience dilution due to the issuance of Company Common Stock to the Reviva shareholders as consideration in the Merger entitling them to a significant voting stake in the Company.

 

Based on Reviva’s and Tenzing’s current capitalization (and the assumptions regarding the Merger Consideration paid at Closing described under the section entitled “Frequently Used Terms — Share Calculations and Ownership Percentages”), we anticipate issuing to the Reviva shareholders approximately an aggregate of 5,771,934 shares of Company Common Stock pursuant to the Merger Agreement, and it is currently expected that Tenzing’s current shareholders would hold in the aggregate approximately 47.88% of the outstanding common stock of the Company. If any of the Public Shares are redeemed in connection with the Merger, the percentage of the outstanding ordinary shares held by the Public Shareholders will decrease and the percentages of the outstanding common stock held immediately following the Business Combination by the Sponsor and outstanding common stock issuable to Reviva shareholders will increase. To the extent that any of the outstanding warrants and Assumed Options are exercised for Company Common Stock, or additional awards are issued under the proposed 2020 Equity Incentive Plan, Tenzing’s existing shareholders may experience substantial dilution. Such dilution could, among other things, limit the ability of Tenzing’s current shareholders to influence the Company’s management through the election of directors following the Business Combination.

 

The ability of Tenzing’s shareholders to exercise Redemption Rights with respect to the Public Shares may prevent Tenzing from completing the Business Combination or optimizing its capital structure.

 

Tenzing does not know how many shareholders will ultimately exercise their Redemption Rights in connection with the Business Combination. As such, the Business Combination is structured based on Tenzing’s expectations (and those of the other parties to the Merger Agreement) as to the number of shares that will be submitted for Redemption. In addition, if a larger number of shares are submitted for Redemption than Tenzing initially expected, Tenzing may need to seek to arrange for additional third party financing to be able to have the minimum amount of cash required pursuant to the Merger Agreement.

 

Furthermore, raising such additional financing may involve dilutive equity issuances at higher than desirable levels. For information on the consequences if the Business Combination is not completed or must be restructured, please see the section of this proxy statement/prospectus entitled “Risk Factors — Risks Related to Tenzing.

 

37

 

 

Subsequent to the completion of the Business Combination, the Company 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.

 

Tenzing cannot assure you that the due diligence Tenzing has conducted on Reviva will reveal all material issues that may be present with regard to Reviva, or that factors outside of Tenzing’s or Reviva’s control will not later arise. As a result of unidentified issues or factors outside of Tenzing’s or Reviva’s control, the Company 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 Tenzing’s due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with the preliminary risk analysis conducted by Tenzing. Even though these charges may be non-cash items that would not have an immediate impact on the Company’s liquidity, the fact that the Company reports charges of this nature could contribute to negative market perceptions about the Company or its securities. In addition, charges of this nature may cause the Company to violate leverage or other covenants to which it may be subject. Accordingly, any shareholders who choose to remain shareholders following the Business Combination could suffer a reduction in the value of their shares from any such write-down or write-downs.

 

The Company’s ability to be successful following the Business Combination will depend upon the efforts of the Company Board and Reviva’s key personnel and the loss of such persons could negatively impact the operations and profitability of the Company’s business following the Business Combination.

 

The Company’s ability to be successful following the Business Combination will be dependent upon the efforts of the Company Board and key personnel. Tenzing cannot assure you that, following the Business Combination, the Company Board and the Company’s key personnel will be effective or successful or remain with the Company. 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 Company’s management to expend time and resources becoming familiar with such requirements.

 

The COVID-19 pandemic triggered an economic crisis which may delay or prevent the consummation of the Business Combination.

 

In December 2019, a coronavirus (COVID-19) outbreak was reported in China, and, in March 2020, the World Health Organization declared it a pandemic. Since being initially reported in China, the coronavirus has spread throughout the world and has resulted in unprecedented restrictions and limitations on operations of many businesses, educational institutions and governmental entities, including in the United States and Canada. Given the ongoing and dynamic nature of the COVID-19 crisis, it is difficult to predict the impact on the business of Reviva, Tenzing and Reviva Pharmaceutical Holdings, Inc., and there is no guarantee that efforts by Reviva, Tenzing and Reviva Pharmaceutical Holdings, Inc. to address the adverse impact of COVID-19 will be effective. If Reviva or Tenzing is unable to recover from a business disruption on a timely basis, the Business Combination and Reviva Pharmaceutical Holdings, Inc.’s business and financial conditions and results of operations following the completion of the Business Combination would be adversely affected. The Business Combination may also be delayed and adversely affected by the coronavirus outbreak and become more costly. Each of Reviva and Tenzing may also incur additional costs to remedy damages caused by such disruptions, which could adversely affect its financial condition and results of operations.

 

The Company will be a holding company and its only material asset after completion of the Business Combination will be its interest in Reviva, and it is accordingly dependent upon distributions made by its subsidiaries to pay taxes and pay dividends.

 

Upon completion of the Business Combination, the Company will be a holding company with no material assets other than cash in the approximate amount of approximately $8.6 million assuming maximum redemption or approximately $29.9 million if no redemption and its ownership of all of the issued and outstanding Reviva Common Stock. As a result, the Company will have no independent means of generating revenue or cash flow. The Company’s ability to pay taxes and pay dividends will depend on the financial results and cash flows of Reviva and its subsidiaries and the distributions it receives from Reviva. Deterioration in the financial condition, earnings or cash flow of Reviva and its subsidiary for any reason could limit or impair Reviva’s ability to pay such distributions. Additionally, to the extent that the Company needs funds and Reviva and/or its subsidiary are restricted from making such distributions under applicable law or regulation or under the terms of any financing arrangements, or Reviva is otherwise unable to provide such funds, it could materially adversely affect the Company’s liquidity and financial condition.

 

Dividends on the Company’s common stock, if any, will be paid at the discretion of the Company Board, which will consider, among other things, the Company’s business, operating results, financial condition, current and expected cash needs, plans for expansion and any legal or contractual limitations on its ability to pay such dividends. Financing arrangements may include restrictive covenants that restrict the Company’s ability to pay dividends or make other distributions to its stockholders. In addition, Reviva is generally prohibited under Delaware law from making a distribution to a shareholder to the extent that, at the time of the distribution, after giving effect to the distribution, liabilities of Reviva (with certain exceptions) exceed the fair value of its assets. Reviva’s subsidiaries are generally subject to similar legal limitations on their ability to make distributions to Reviva. If Reviva does not have sufficient funds to make distributions, the Company’s ability to declare and pay cash dividends may also be restricted or impaired.

 

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Some of Tenzing’s officers and directors may be argued to have conflicts of interest that may influence or have influenced them to support or approve the Business Combination without regard to your interests or in determining whether Reviva is appropriate for Tenzing’s initial business combination.

 

The personal and financial interests of Tenzing’s Sponsor, officers and directors may influence or have influenced their motivation in identifying and selecting a target for the Business Combination, their support for completing the Business Combination and the operation of the Company following the Business Combination.

 

Tenzing’s Sponsor owns 1,581,250 ordinary shares, which were initially acquired prior to Tenzing’s IPO and for an aggregate purchase price of $25,000 and Tenzing’s directors and officers have pecuniary interests in such ordinary shares through their ownership interest in the Sponsor. In addition, the Sponsor purchased an aggregate of 323,750 Private Placement Units at a price of $10 per unit. Such shares had an aggregate market value of approximately $20.6 million based on the last sale price of $10.75 per share on Nasdaq on October 1, 2020. Tenzing’s Memorandum and Articles of Association require Tenzing to complete an initial business combination prior December 28, 2020 (unless Tenzing submits and its shareholders approve an extension of such date). If the Business Combination is not consummated and Tenzing is forced to wind up, dissolve and liquidate in accordance with Tenzing’s Memorandum and Articles of Association, the securities of Tenzing currently held by the Sponsor will be worthless as the holders have waived liquidation rights with respect to such securities.

 

Certain officers and directors of Tenzing also participate in arrangements that may be argued to provide them with other interests in the Business Combination that are different from yours, including, among others, arrangements for the continued service as directors of the Company. Tenzing’s officers and directors collectively (including entities controlled by and families of officers and directors)  have made an aggregate average investment per share of $1.78 (including the Founder Shares and Private Placement Shares allotted as part of Private Placement Units; excluding the Private Placement Warrants) as of the consummation of Tenzing’s initial public offering, exclusive of their aggregate working capital contributions of ($1,775,000) as of September 25, 2020.  If such working capital contributions are included, Tenzing’s officers and directors collectively have made an aggregate average investment per share of $2.47 (including Founder Shares and Private Placement Shares allotted as part of Private Placement Units; excluding Private Placement Warrants allotted as part of Private Placement Units) as of September 25, 2020 (assuming $1,775,000 of working capital units convert to units at $10.00 per share). The officers’ and directors’ significantly lower investment per share in their ordinary shares of Tenzing results in a difference between a transaction that increases the value of the officers' and directors' investment and a transaction that increases the value of the public shareholders' investment.  As such, Tenzing's officers’ and directors’ risk to lose their entire investment if the Business Combination is not approved may be argued to create a conflict of interest that may cause them to support or approve the Business Combination.

 

Further, Tenzing’s Sponsor, officers and directors have, pursuant to the Insider Letter Agreement, each agreed (A) to vote any Tenzing shares owned by them in favor of the Business Combination and (B) not to redeem any shares in connection with a shareholder vote to approve the Business Combination.

 

These interests, among others, may influence or have influenced the Sponsor and the officers and directors of Tenzing and Reviva to support or approve the Business Combination. For more information concerning the interests of Tenzing’s officers and directors, see the section entitled “The Business Combination Proposal — Interests of Tenzing’s Directors and Officers and Others in the Business Combination” and the risk factor entitled “ — Risks Related to Tenzing — The Sponsor controls a substantial interest in Tenzing and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support in this proxy statement/prospectus.

 

Tenzing has not obtained an opinion from an independent investment banking firm or another independent firm, and consequently, you may have no assurance from an independent source that the terms of the Business Combination are fair to Tenzing from a financial point of view.

 

The Tenzing Board did not obtain a third-party valuation or fairness opinion in connection with their determination to approve the Business Combination. Tenzing is not required to obtain an opinion from an independent investment banking firm that is a member of FINRA or from another independent firm that the price it is paying is fair to Tenzing from a financial point of view. In analyzing the Business Combination, the Tenzing Board and Tenzing’s management conducted due diligence on Reviva and researched the industry in which Reviva operates and concluded that the Business Combination was in the best interest of its shareholders. Accordingly, Tenzing’s shareholders will be relying solely on the judgment of the Tenzing Board in determining the value of the Business Combination, and the Tenzing Board may not have properly valued such business. The lack of third-party valuation or fairness opinion may also lead an increased number of shareholders to vote against the Business Combination or demand Redemption of their shares, which could potentially impact our ability to consummate the Business Combination. For more information about our decision-making process, see the section entitled “The Business Combination Proposal — Tenzing Board’s Reasons for the Approval of the Business Combination.”

 

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Tenzing does not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible to complete a Business Combination in which a substantial majority of Tenzing’s shareholders do not intend to retain their investment in which case the Reviva shareholders may receive a greater number of post-Business Combination Company Common Stock as a result of redemptions.

 

The Memorandum and Articles of Association of Tenzing does not provide a specified maximum Redemption threshold, except that in no event will Tenzing redeem its Public Shares in an amount that would cause its net tangible assets, without regard to any assets or liabilities of Reviva, to be less than $5,000,001 immediately prior to the completion of the Business Combination (such that Tenzing is not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement contained in the Merger Agreement. As a result, Tenzing 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 Sponsor, officers, directors, advisors or their affiliates. In the event the aggregate cash consideration we would be required to pay for all Public Shares 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 Tenzing, Tenzing will not consummate the Business Combination or redeem any shares, all Public Shares submitted for redemption will be returned to the holders thereof and Tenzing will be required to liquidate.

 

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

 

Tenzing’s securities are currently listed on Nasdaq and it is anticipated that, following the Business Combination, the Company’s securities will continue to be listed on Nasdaq. However, there can be no assurance that the Company’s securities will continue to be listed on Nasdaq in the future. In order to continue to maintain the listing of the Company’s securities on Nasdaq, the Company must maintain certain financial, distribution, liquidity and stock price levels. For instance, the Company’s stock price would generally be required to be at least $4 per share and its stockholders’ equity would generally be required to be at least $5 million and the Company would be required to have a minimum of 300 public holders of “round lots” of 100 shares (with at least 50% of such round lot holders holding securities with a market value of at least $2,500). In addition to the listing requirements for the Company’s common stock, Nasdaq imposes listing standards on warrants. There can be no assurance that the Company will be able to meet those initial listing requirements.

 

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

 

•        a limited availability of market quotations for its securities;

 

•        reduced liquidity for its securities;

 

•        a determination that the Company common stock is a “penny stock” which will require brokers trading in the common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for the Company’s securities;

 

•        a limited amount of news and analyst coverage; and

 

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

 

With respect to Tenzing ordinary shares before the Business Combination, if these shares are delisted from trading by Nasdaq, then such an event may be considered a Material Adverse Event under the Merger Agreement, and Reviva is not obligated to close the Business Combination for as long as such Material Adverse Event is continuing and uncured.

 

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The unaudited pro forma financial information included in the section entitled Unaudited Pro Forma Condensed Combined Financial Information” may not be representative of the Company’s results if the Business Combination is completed.

 

Tenzing and Reviva currently operate as separate companies and have had no prior history as a combined entity, and their operations have not previously been managed on a combined basis. The pro forma financial information included in this proxy statement/prospectus 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 Company. The pro forma statement of operations 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 future market conditions on revenues or expenses. The pro forma financial information included in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” has been derived from Tenzing’s and Reviva’s historical financial statements and certain adjustments and assumptions have been made regarding the Company after giving effect to the Business Combination. There may be differences between preliminary estimates in the pro forma financial information and the final acquisition accounting, which could result in material differences from the pro forma information presented in this proxy statement/prospectus in respect of the estimated financial position and results of operations of the Company.

 

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

 

During the pendency of the Business Combination, Tenzing will not be able to enter into a business combination with another party because of restrictions in the Merger Agreement. Furthermore, certain provisions of the Merger Agreement will 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 Tenzing to make acquisitions or complete other transactions that are not in the ordinary course of business pending completion of the Business Combination. As a result, Tenzing may be at a disadvantage to its competitors during that period. In addition, while the Merger Agreement is in effect, neither Tenzing nor Reviva may solicit, assist, facilitate the making, submission or announcement of, or intentionally encourage any alternative acquisition proposal, such as a merger, material sale of assets or equity interests or other business combination, with any third party, even though any such alternative acquisition could be favorable to Tenzing’s shareholders than the Business Combination. In addition, if the Business Combination is not completed, these provisions will make it more difficult to complete an alternative business combination following the termination of the Merger Agreement due to the passage of time during which these provisions have remained in effect.

 

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

 

Even if the Merger Agreement is approved by the shareholders of Tenzing and Reviva, specified conditions must be satisfied or waived before the parties to the Merger Agreement are obligated to complete the Business Combination. For a list of the material closing conditions contained in the Merger Agreement, see the section entitled “The Business Combination Proposal — The Merger Agreement — Closing Conditions.” Tenzing and Reviva may not satisfy all of the closing conditions in the Merger Agreement. If the closing conditions are not satisfied or waived, the Business Combination will not occur, or will be delayed pending later satisfaction or waiver, and such delay may cause Tenzing and Reviva to each lose some or all of the intended benefits of the Business Combination.

 

Each of Tenzing and Reviva may waive one or more of the conditions to the Business Combination.

 

Each of Tenzing and Reviva may agree to waive, in whole or in part, some of the conditions to their respective obligations to complete the Business Combination, to the extent permitted by their respective existing charters and applicable laws. For example, it is a condition to Tenzing’s obligations to close the Business Combination that the representations and warranties of Reviva and its subsidiaries are true and correct in all respects as of the date of the Merger Agreement and as of the date of the Closing Date (as defined in the Merger Agreement) (or an earlier date to the extent that an earlier date is referenced in the representation and warranty), except, for certain of the representations and warranties, for such inaccuracies that, individually or in the aggregate, would not result in a Material Adverse Effect (as defined in the Merger Agreement) on Reviva and its subsidiaries. Tenzing is not able to waive the condition that its stockholders approve the Business Combination. Reviva is not able to waive the condition that its stockholders approve the Business Combination. The following closing conditions also may not be waived: expiration of any applicable waiting period under any antitrust laws; receipt of requisite consents from governmental authorities to consummate the Transactions; the absence of any law or order that would prohibit the consummation of the Merger or other transactions contemplated by the Merger Agreement; upon the Closing, after giving effect to the completion of the Redemption, the Company having net tangible assets of at least $5,000,001; and the effectiveness of this registration statement. If either Tenzing or Reviva elects to waive any conditions to their respective obligations to complete the Business Combination, the parties may close the Business Combination without the satisfaction of any such conditions.

 

Because Tenzing is incorporated under the laws of the British Virgin Islands, in the event the Business Combination is not completed, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. Federal courts may be limited.

 

Because Tenzing is currently incorporated under the laws of the British Virgin 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 Domestication. Tenzing is currently a business company under the laws of the British Virgin Islands. As a result, it may be difficult for investors to effect service of process within the United States upon Tenzing’s directors or officers, or enforce judgments obtained in the United States courts against Tenzing’s directors or officers.

 

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Until the Domestication is effected, Tenzing’s corporate affairs are governed by the Memorandum and Articles of Association, the Companies Act and the common law of the British Virgin Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of its directors to Tenzing under the laws of the British Virgin Islands in part governed by the common law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the British Virgin 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 British Virgin Islands. The rights of Tenzing’s shareholders and the fiduciary responsibilities of its directors under British Virgin Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the British Virgin Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition, British Virgin Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the United States.

 

Tenzing has been advised by its British Virgin Islands legal counsel that the courts of the British Virgin Islands are unlikely (i) to recognize or enforce against Tenzing judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the British Virgin Islands, to impose liabilities against Tenzing predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the British Virgin Islands of judgments obtained in the United States, the courts of the British Virgin Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the British Virgin Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a British Virgin Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the British Virgin Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A British Virgin Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

 

The Public Shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the Tenzing Board or controlling shareholders than they would as public shareholders of a United States company.

 

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

 

The Tenzing Board believes the Domestication 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) of the Code apply in the case of a statutory conversion of a corporation with no active business and only investment-type assets such as Tenzing, this result is subject to some uncertainty. Accordingly, due to the absence of such guidance, it is not possible to predict whether the IRS or a court considering the issue would take a contrary position. If the Domestication should fail to qualify as a reorganization under Section 368(a) of the Code, a U.S. Holder (as that term is defined in the section entitled “Proposal 1: The Domestication Proposal — Federal Income Tax Consequences of the Domestication to Tenzing Shareholders and Warrant Holders”) of Tenzing Shares generally would recognize a gain or loss with respect to its Tenzing 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 Domestication and the U.S. Holder’s adjusted tax basis in its Tenzing Shares surrendered.

 

As discussed more fully under the section entitled “Proposal 1: The Domestication Proposal — Material U.S. Federal Income Tax Consequences of the Domestication to Tenzing Shareholders and Warrant Holders” below, it is intended that the Domestication will constitute a tax-free reorganization within the meaning of Section 368(a)(l)(F) of the Code.

 

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Upon effectiveness of the Domestication, the rights of holders of the Company’s common stock arising under the DGCL will differ from and may be less favorable to the rights of holders of Tenzing’s ordinary shares arising under the British Virgin Islands Companies Act.

 

Upon the effectiveness of the Domestication, the rights of holders of the Company’s common stock will arise under the DGCL. The DGCL contains provisions that differ in some respects from those in the Companies Act, and, therefore, some rights of holders of the Company’s common stock could differ from the rights that holders of Tenzing ordinary shares currently possess. For instance, while class actions are generally not available to shareholders under British Virgin Islands law, such actions are generally available under Delaware law. This change could increase the likelihood that the Company becomes involved in costly litigation, which could have a material adverse effect on the Company.

 

The application of Delaware law to Tenzing as a result of the Domestication may have the effect of deterring hostile takeover attempts or a change in control. Section 203 of the Delaware General Corporation Law, or the DGCL, restricts certain “business combinations” with “interested stockholders” for three years following the date that a person becomes an interested stockholder unless: (1) the “business combination” or the transaction which caused the person or entity to become an interested stockholder is approved by the Board of Directors prior to such business combination or transactions; (2) upon the completion of the transaction in which the person or entity becomes an “interested stockholder” such interested stockholder holds at least 85% of the voting stock of the combined company not including (x) shares held by officers and directors and (y) shares held by employee benefit plans under certain circumstances; or (3) at or after the person or entity becomes an “interested stockholder,” the “business combination” is approved by the Board of Directors and holders of at least 66 2/3% of the outstanding voting stock, excluding shares held by such interested stockholder. A Delaware corporation may elect not to be governed by Section 203. We do not anticipate making such an election.

 

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For a more detailed description of the rights of holders of the Company’s common stock under the DGCL and how they may differ from the rights of holders of Tenzing ordinary shares under the Companies Act, please see the section entitled “The Domestication Proposal — Comparison of Shareholder Rights under the Applicable Corporate Law Before and After the Domestication.

 

Delaware law and the Amended and Restated 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 Amended and Restated Certificate of Incorporation and Bylaws that will be in effect upon completion of the Business Combination differ from the Memorandum and Articles of Association. Among other differences, the Amended and Restated Certificate of Incorporation, and the DGCL, contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by the Company Board and therefore depress the trading price of the Company 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 Company Board or taking other corporate actions, including effecting changes in management. Among other things, the Amended and Restated Certificate of Incorporation and Bylaws include provisions regarding:

 

the ability of the Company Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

 

the limitation of the liability of, and the indemnification of, the Company’s directors and officers;

 

the right of the Company Board to elect a director to fill a vacancy created by the expansion of the Company Board or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on the Company Board;

 

a prohibition on stockholder action by written consent (except as required for holders of future series of preferred stock), which forces stockholder action to be taken at an annual or special meeting of stockholders and could delay the ability of stockholders to force consideration of a stockholder proposal or to take action, including the removal of directors;

 

the requirement that a special meeting of stockholders may be called only by the Company Board, the chairman of the Company Board, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors;

 

controlling the procedures for the conduct and scheduling of the Company Board and stockholder meetings;

 

the requirement for the affirmative vote of holders of at least a majority of the voting power of all of the voting power of the then outstanding shares of the voting stock, voting as a single class, to amend, alter, change or repeal any provision of the Company’s Bylaws and certain provisions in the Amended and Restated Certificate of Incorporation, respectively, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the Company Board and also may inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt;

 

the ability of the Company Board to amend the Bylaws by an affirmative vote of a majority of the Board, which may allow the Company Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the Bylaws to facilitate an unsolicited takeover attempt; and

 

advance notice procedures with which stockholders must comply to nominate candidates to the Company Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the Company Board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of Company.

 

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These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in the Company Board or management.

 

In addition, as a Delaware corporation, the Company will generally be subject to provisions of Delaware law, including Section 203 of the DGCL. See the section entitled “Description of Reviva’s, Tenzing’s and the Company’s Securities — Capital Stock of the Company after the Business Combination — Anti-Takeover Effects of the Certificate of Incorporation, the Bylaws and Certain Provisions of Delaware Law — Business Combinations.”

 

Any provision of the Amended and Restated 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 Company’s capital stock and could also affect the price that some investors are willing to pay for the Company’s common stock.

 

The form of the Amended and Restated Certificate of Incorporation is attached as Annex B to this proxy statement/prospectus and we urge you to read it.

 

The 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 Company and its stockholders, which could limit the Company’s stockholders’ ability to choose the judicial forum for disputes with the Company or its directors, officers, or employees.

 

The Amended and Restated Certificate of Incorporation will provide that, unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware, or if such court does not have subject matter jurisdiction, any other court located in the State of Delaware with subject matter jurisdiction, will be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee or stockholder of the Company to the Company or the Company’s stockholders, (iii) any action asserting a claim against the Company or its officers or directors arising pursuant to any provision of the Delaware General Corporate Law or the Amended and Restated Certificate of Incorporation or Bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (iv) any action asserting a claim against the Company or any director or officer of the Company governed by the internal affairs doctrine of the law of the State of Delaware; provided, that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state court sitting in the State of Delaware. Additionally, the Amended and Restated Certificate of Incorporation will provide that, unless the Company consents to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended; provided, however, that such provision will not apply to suits brought to enforce any liability or duty created by the Securities Exchange Act of 1934, as amended, or any other claim for which the federal courts have exclusive jurisdiction.

 

Any person or entity purchasing or otherwise acquiring any interest in any of the securities of the Company will be deemed to have notice of and consented to these provisions. 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 Company or its directors, officers, or other employees, which may discourage lawsuits against the Company and its directors, officers, and other employees. If a court were to find these exclusive-forum provisions to be inapplicable or unenforceable in an action, the Company may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm its results of operations.

 

Tenzing’s officers and directors and/or their affiliates may enter into agreements concerning Tenzing’s securities prior to the Shareholders Meeting, which may have the effect of increasing the likelihood of completion of the Business Combination or decreasing the value of the Tenzing Shares.

 

At any time prior to the Shareholders Meeting, during a period when they are not then aware of any material nonpublic information regarding Tenzing or its securities, Tenzing’s officers and directors and/or their affiliates may enter into a written plan to purchase Tenzing’s securities pursuant to Rule 10b5-1 of the Exchange Act, and may engage in other public market purchases, as well as private purchases, of securities. In addition, at any time prior to the Shareholders Meeting, during a period when they are not then aware of any material nonpublic information regarding Tenzing or its securities, Tenzing’s officers and directors and/or their respective affiliates may (i) purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the Business Combination Proposal or the other Proposals, (ii) execute agreements to purchase such shares from institutional and other investors in the future, and/or (iii) enter into transactions with institutional and other investors to provide such persons with incentives to acquire Public Shares or vote their Public Shares in favor of the Business Combination Proposal or the other Proposals. Such an agreement may include a contractual acknowledgement that such shareholder, although still the record holder of such shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its Redemption Rights. In the event that Tenzing’s officers and directors or their affiliates purchase shares in privately negotiated transactions from Public Shareholders who have already elected to exercise their Redemption Rights, such selling Public Shareholders would be required to revoke their prior elections to redeem their shares. While the exact nature of any such incentives has not been determined as of the date of this proxy statement/prospectus, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and the transfer of shares or Warrants owned by the Sponsor for nominal value to such investors or holders.

 

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The purpose of such share purchases and other transactions by Tenzing’s officers and directors and/or their respective affiliates would be to increase the likelihood of satisfaction of the requirements that (x) the holders of the requisite number of Tenzing Shares present and voting at the Shareholders Meeting vote in favor of the Business Combination Proposal and the other Proposals and/or (y) that Tenzing will (without regard to any assets or liabilities of Reviva) have at least $5,000,001 in net tangible assets immediately prior to the Closing or satisfy the Cash Consideration Condition after taking into account holders of Public Shares that properly demanded Redemption of their shares into cash, when, in each case, it appears that such requirements would otherwise not be met.

 

Entering into any such arrangements may have a depressive effect on the Tenzing Shares. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares it owns, either prior to or immediately after the Shareholders Meeting.

 

As of the date of this proxy statement/prospectus, except as noted above, Tenzing’s directors and officers and their affiliates have not entered into any such agreements. Tenzing will file a Current Report on Form 8-K to disclose arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the Business Combination Proposal or the Redemption threshold. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

 

The Company’s business and operations could be negatively affected if it becomes subject to any securities litigation or shareholder activism, which could cause the Company to incur significant expense, hinder execution of business and growth strategy and impact its stock price.

 

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Shareholder activism, which could take many forms or arise in a variety of situations, has been increasing recently. Volatility in the stock price of the Company’s common stock or other reasons may in the future cause it to become the target of securities litigation or shareholder activism. Securities litigation and shareholder activism, including potential proxy contests, could result in substantial costs and divert management’s and board of directors’ attention and resources from the Company’s business. Additionally, such securities litigation and shareholder activism could give rise to perceived uncertainties as to the Company’s future, adversely affect its relationships with service providers and make it more difficult to attract and retain qualified personnel. Also, the Company may be required to incur significant legal fees and other expenses related to any securities litigation and activist shareholder matters. Further, its stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and shareholder activism.

 

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Risks Related to Tenzing

 

You have limited rights or interests in funds in the Trust Account. To liquidate your investment, therefore, you may be forced to sell your Public Shares or warrants, potentially at a loss.

 

Public Shareholders will be entitled to receive funds from the Trust Account only upon (i) such shareholder’s exercise of Redemption Rights in connection with Tenzing’s initial business combination (which will be the Business Combination should it occur) and then only in connection with those ordinary shares of Tenzing that such shareholder properly elected to redeem, subject to the limitations described herein, (ii) the Redemption of any Public Shares properly tendered in connection with a shareholder vote to amend the Memorandum and Articles of Association to (A) modify the substance or timing of Tenzing’s obligation to redeem 100% of the Public Shares if Tenzing does not complete an initial business combination by December 28, 2020 or (B) with respect to any other provision relating to shareholders’ rights or pre-business combination activity and (iii) the Redemption of Public Shares if Tenzing is unable to complete an initial business combination by December 28, 2020, subject to applicable law and as further described herein. In that case, Public Shareholders may be forced to wait beyond December 28, 2020 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, potentially at a loss.

 

If you or a “group” of shareholders are deemed to hold in excess of 20% of Tenzing’s Public Shares, you will lose the ability to redeem all such shares in excess of 20% of Tenzing’s Public Shares.

 

The Memorandum and Articles of Association 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 15% of the shares sold in Tenzing’s IPO, which is referred to as the “Excess Shares.” However, such shareholders may vote all their shares (including Excess Shares) for or against the Business Combination. Your inability to redeem the Excess Shares will reduce your influence over Tenzing’s ability to complete the Business Combination and you could suffer a material loss on your investment in Tenzing if you sell Excess Shares in open market transactions. Additionally, you will not receive Redemption distributions with respect to the Excess Shares if Tenzing completes the Business Combination. As a result, you will continue to hold that number of Public Shares exceeding 20% and, in order to dispose of such shares, would be required to sell such shares in open market transactions, potentially at a loss.

 

Tenzing’s shareholders may be held liable for claims by third parties against Tenzing to the extent of distributions received by them upon Redemption of their shares.

 

If Tenzing is forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, Tenzing was unable to pay its debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover all amounts received by Tenzing’s shareholders. Furthermore, Tenzing’s directors may be viewed as having breached their fiduciary duties to Tenzing or Tenzing’s creditors and/or having acted in bad faith, and thereby exposing themselves and Tenzing to claims, by paying public shareholders from the Trust Account prior to addressing the claims of creditors. There is no assurance that claims will not be brought against Tenzing for these reasons.

 

Although Tenzing seeks to have all vendors, service providers, prospective target businesses or other entities with which it does business execute agreements with Tenzing waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of Tenzing’s Public Shareholders, as well as distributions to 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 Public Shareholders or claims challenging the enforceability of the waiver.

 

If third parties bring claims against Tenzing, the proceeds held in the Trust Account could be reduced and the Redemption Price received by Public Shareholders may be less than $10.20 per share.

 

Tenzing’s placing of funds in the Trust Account may not protect those funds from third-party claims against Tenzing. Although Tenzing seeks to have all vendors, service providers, prospective target businesses or other entities with which it does business execute agreements with Tenzing waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of Tenzing’s 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 Tenzing’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, Tenzing’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 Tenzing than any alternative.

 

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Examples of possible instances where Tenzing 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 Tenzing and will not seek recourse against the Trust Account for any reason. Upon Redemption of Tenzing’s Public Shares, if Tenzing 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, Tenzing will be required to provide for payment of claims of creditors that were not waived that may be brought against Tenzing within the ten years following Redemption. Accordingly, the Redemption Price received by Public Shareholders could be less than the $10.20 per share initially held in the Trust Account, due to claims of such creditors.

 

Pursuant to the Insider Letter Agreement, the Sponsor has agreed that it will be liable to Tenzing if and to the extent any claims by a vendor (other than the independent auditors) for services rendered or products sold to Tenzing, or a prospective target business with which Tenzing has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below $10.20 per public share, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under Tenzing’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third party claims. Tenzing believes that the Sponsor’s only assets are securities of Tenzing, and Tenzing has neither undertaken any efforts to independently verify whether the Sponsor has sufficient funds available to satisfy its indemnification obligations, nor asked the Sponsor to reserve for such obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for an initial business combination and Redemptions could be reduced to less than $10.20 per Public Share without any meaningful recourse against the Sponsor. In such event, Tenzing may not be able to complete an initial business combination, and you would receive such lesser amount per share in connection with any Redemption of your Public Shares.

 

None of Tenzing’s officers or directors will indemnify Tenzing for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

 

Tenzing’s directors may decide not to enforce the indemnification obligations of the Sponsor under the Insider Letter Agreement, resulting in a reduction in the amount of funds in the Trust Account available for distribution to Tenzing’s Public Shareholders.

 

In the event that the proceeds in the Trust Account are reduced below $10.20 per Public Share due to reductions in the value of the trust assets, net of the interest which may be withdrawn to pay taxes, and the Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, Tenzing’s independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations. While Tenzing currently expects that its independent directors would take legal action on behalf of Tenzing against the Sponsor to enforce their indemnification obligations to Tenzing, it is possible that Tenzing’s independent directors in exercising their business judgment may choose not to do so in any particular instance. If Tenzing’s independent directors choose not to enforce these indemnification obligations, there may be less funds in the Trust Account available for distribution to Tenzing’s Public Shareholders.

 

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If, after Tenzing distributes the proceeds in the Trust Account to its Public Shareholders, Tenzing files for insolvent liquidation or a petition for the insolvent liquidation of Tenzing is filed that is not dismissed, a British Virgin Islands court may seek to recover such proceeds and the members of the Tenzing Board may be viewed as having breached their fiduciary duties to Tenzing’s creditors, thereby exposing the members of the Tenzing Board and Tenzing to claims of punitive damages.

 

If, after Tenzing distributes the proceeds in the Trust Account to its Public Shareholders, Tenzing files a petition for insolvent liquidation or a petition for the insolvent liquidation of Tenzing is filed that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as an unlawful distribution. As a result, a British Virgin Islands court could seek to recover all amounts received by Tenzing’s shareholders. In addition, the Tenzing Board may be viewed as having breached its fiduciary duty to Tenzing’s creditors and/or having acted in bad faith, thereby exposing itself and Tenzing to claims of punitive damages, by paying Public Shareholders from the Trust Account prior to addressing the claims of creditors.

 

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 Tenzing.

 

Tenzing is subject to laws and regulations enacted by national, regional and local governments. In particular, Tenzing 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 Tenzing. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on Tenzing’s business and results of operations.

 

The Insider Letter Agreement may be amended without shareholder approval.

 

The Insider Letter Agreement with Tenzing’s Sponsor, directors and officers contains provisions relating to transfer restrictions of Tenzing’s Founder Shares and Private Placement Units (including the underlying securities), indemnification of the Trust Account, waiver of Redemption Rights and participation in liquidation distributions from the Trust Account. The Insider Letter Agreement may be amended without shareholder approval. While Tenzing does not expect the Tenzing Board to approve any amendment to this agreement prior to the Business Combination, it may be possible that the Tenzing Board, in exercising its business judgment and subject to its fiduciary duties and any restrictions under the Merger Agreement, 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 Tenzing’s securities.

 

The Sponsor controls a substantial interest in Tenzing and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support.

 

The Sponsor owns 30.9% of Tenzing’s issued and outstanding ordinary shares. Accordingly, they may exert a substantial influence on actions requiring a shareholder vote, including the matters to be considered at the Shareholders Meeting, potentially in a manner that you do not support. If the Sponsor purchases any additional ordinary shares in the aftermarket or in privately negotiated transactions, this would increase its control. Neither the Sponsor nor, to Tenzing’s knowledge, any of Tenzing’s officers or directors, have any current intention to purchase additional securities, other than as may be disclosed in this proxy statement/prospectus. Factors that would be considered in making such additional purchases would include consideration of the current trading price of Tenzing’s ordinary shares. Tenzing 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 Sponsor will continue to exert control at least until the consummation of the Business Combination.

 

Your unexpired Warrants may be redeemed prior to their exercise at a time that is disadvantageous to you, thereby making your Warrants worthless.

 

Outstanding Warrants may be redeemed 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 Tenzing’s ordinary shares 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 Tenzing sends the notice of redemption to the warrant holders. If and when the warrants become redeemable by Tenzing, Tenzing may not exercise its redemption rights if the issuance of ordinary shares upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or Tenzing is unable to effect such registration or qualification, subject to its obligation in such case to use its best efforts to register or qualify the ordinary 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 Tenzing 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 Tenzing so long as they are held by their initial purchasers — the Sponsor and Maxim — or their permitted transferees.

 

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

 

Tenzing (and the Company following the Business Combination) is an “emerging growth company” within the meaning of the Securities Act, as modified by 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 attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in Tenzing’s periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on certain executive compensation matters. As a result, Tenzing’s shareholders may not have access to certain information they may deem important. Tenzing and the Company may be an emerging growth company for up to five years from the IPO, although circumstances could cause the loss of that status earlier, including if the market value of the common stock of the Company held by non-affiliates exceeds $700 million as of the last business day in any August before that time, in which case the Company would no longer be an emerging growth company as of the following February 28. Tenzing cannot predict whether investors will find its (or the Company’s) securities less attractive because Tenzing (or the Company) 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 Company’s securities may be lower than they otherwise would be, there may be a less active trading market for the Company’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 an emerging growth 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. Tenzing has elected not to opt out of such extended transition period. Accordingly, when a standard is issued or revised and it has different application dates for public or private companies, Tenzing (or the Company following the Business Combination), as an emerging growth company, will adopt the new or revised standard at the time private companies adopt the new or revised standard, unless early adoption is permitted by the standard. This may make comparison of Tenzing’s and the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

 

Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for Tenzing 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 Tenzing evaluate and report on its system of internal controls. Following the initial Business Combination, if the Company is deemed to be a large accelerated filer or an accelerated filer, it will 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 the Company 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. Following the Business Combination, the Company will be required to assure that it is in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The need to develop the internal control system to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete the Business Combination as well as impose obligations of the Company following the Business Combination.

 

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Risks Related to Reviva’s Business and Industry

 

Following the Business Combination, the Company will be a holding company with no direct operations that relies on dividends, distributions, loans and other payments, advances and transfers of funds from Reviva and its subsidiary to pay dividends, pay expenses and meet its other obligations. Accordingly, the Company’s stockholders will be subject to all of the risks of Reviva’s business following the Business Combination. Throughout this section, unless otherwise noted, “Reviva” refers to Reviva Pharmaceuticals, Inc. and its consolidated subsidiary.

 

Risks Related to Reviva’s Business, Financial Position and Capital Requirements

 

Reviva has never generated any product revenues.

 

Reviva is a clinical-stage biopharmaceutical company. Although Reviva was formed in May 2006, to date, Reviva has not generated any product revenues from its product candidates currently in development. Reviva has not yet demonstrated an ability to successfully complete a large-scale, pivotal clinical trial, obtain marketing approval, manufacture a commercial scale product, or arrange for a third-party to do so on its behalf, or conduct sales and marketing activities necessary for successful product commercialization.

 

Consequently, Reviva has no meaningful operations upon which to evaluate its business and predictions about Reviva’s future success or viability may not be as accurate as they could be if Reviva had a history of successfully developing and commercializing pharmaceutical products.

 

Reviva’s ability to generate revenue and become profitable depends upon its ability to successfully complete the development of Reviva’s product candidates, RP5063 for the treatment of schizophrenia, respiratory/pulmonary diseases such as Pulmonary Arterial Hypertension, or PAH, and Idiopathic Pulmonary Fibrosis, or IPF, and for other neuropsychiatric diseases, such as bipolar disorder, or BD, major depressive disorder, or MDD, Alzheimer’s psychosis/agitation, or AD, Parkinson’s psychosis, or PD, and attention deficit hyperactivity disorder, or ADHD/ADD, and RP1208 for the treatment of depression and obesity, and obtain the necessary regulatory approvals for their commercialization. Reviva has never been profitable, has no products approved for commercial sale and to date has not generated any revenue from product sales.

 

Even if Reviva receives regulatory approval for the commercialization of RP5063, Reviva does not know when this product candidate will generate revenue, if at all. RP1208 is in pre-clinical development. Reviva’s ability to generate product revenue depends on a number of factors, including its ability to:

 

·successfully complete clinical trials and obtain regulatory approval for the marketing of its product candidates;

 

·set an acceptable price for its product candidates and obtain coverage and adequate reimbursement from third-party payors;

 

·establish sales, marketing and distribution systems for its product candidates;

 

·add operational, financial and management information systems and personnel, including personnel to support its clinical, manufacturing and planned future commercialization efforts and operations;

 

·initiate and continue relationships with third-party manufacturers and have commercial quantities of its product candidates manufactured at acceptable cost levels;

 

·attract and retain an experienced management and advisory team;

 

·achieve broad market acceptance of Reviva’s products in the medical community and with third party payors and consumers;

 

·launch commercial sales of its products, whether alone or in collaboration with others; and

 

·maintain, expand and protect Reviva’s intellectual property portfolio.

 

Because of the numerous risks and uncertainties associated with product development, Reviva is unable to predict the timing or amount of increased expenses, or when, or if, Reviva will be able to achieve or maintain profitability. Reviva’s expenses could increase beyond expectations if Reviva is required by the U.S. Food and Drug Administration, or the FDA, and comparable non-U.S. regulatory authorities, to perform studies or clinical trials in addition to those that it currently anticipates. Even if Reviva’s product candidates are approved for commercial sale, Reviva anticipates incurring significant costs associated with the commercial launch of these products. If Reviva cannot successfully execute any one of the foregoing, its business, prospects and results of operations may be adversely affected.

 

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Reviva expects to incur significant losses for the foreseeable future and may never achieve or maintain profitability.

 

Investment in pharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that a product candidate will fail to gain regulatory approval or become commercially viable. Reviva has never generated any revenues and cannot estimate with precision the extent of its future losses. Reviva does not currently have any products that are available for commercial sale and Reviva may never generate revenue from selling products or achieve profitability. Reviva expects to continue to incur substantial and increasing losses through the projected commercialization of RP5063 and RP1208. For the six months ended June 30, 2020, Reviva reported a loss of $1,600,395, and a negative cash flow from operations of $415,395. Reviva had an accumulated deficit of $56,127,100 and had cash and cash equivalents of $194,798 as of June 30, 2020.

 

RP5063 has not been approved for marketing in the United States and may never receive such approval. Although RP1208 may be in IND enabling studies for depression and may be in animal efficacy studies for obesity within a short time frame following the receipt of adequate additional financing, it is not currently in an IND-enabling study or animal efficacy study, respectively, and may never meet the requirements for filing an IND. As a result, Reviva is uncertain when or if it will achieve profitability and, if so, whether Reviva will be able to sustain it. Reviva’s ability to produce revenue and achieve profitability is dependent on its ability to complete the development of its product candidates, obtain necessary regulatory approvals, and have its product candidates manufactured and successfully marketed. Reviva cannot assure you that it will be profitable even if it successfully commercializes its product candidates. If it does successfully obtain regulatory approval to market its product candidates, its revenues will be dependent, in part, upon, among other things, the size of the markets in the territories for which Reviva gains regulatory approval, the number of competitors in such markets, the accepted price for its product candidates and whether Reviva owns the commercial rights for that territory. If the indication approved by regulatory authorities is narrower than Reviva expects, or the treatment population is narrowed by competition, physician choice or treatment guidelines, Reviva may not generate significant revenue from sales of its product candidates, even if approved. Even if Reviva does achieve profitability, Reviva may not be able to sustain or increase profitability on a quarterly or annual basis. Failure to become and remain profitable may adversely affect the timing of Reviva’s clinical results and its ability to raise capital and continue operations.

 

Reviva expects its research and development expenses to be significant in connection with the following planned research:

 

·phase 3 studies for RP5063 for the treatment of schizophrenia;

 

·phase 2 studies for the treatment of PAH, IPF, BD, MDD, AD, PD, ADHD/ADD;

 

·pre-clinical studies and clinical studies for RP1208 for the treatment of depression and obesity.

 

Further, Reviva will require additional capital to proceed with the planned research described above. See “Risks Related to Reviva’s Business and Industry - Risks Related to Reviva’s Business, Financial Position and Capital Requirements - Reviva will require additional capital to fund its operations, and if Reviva fails to obtain necessary financing, Reviva may not be able to complete the development and commercialization of RP5063.

 

In addition, if Reviva obtains regulatory approval for RP5063, Reviva expects to incur increased sales and marketing expenses. As a result, Reviva expects to continue to incur significant and increasing operating losses and negative cash flows for the foreseeable future. These losses have had and will continue to have an adverse effect on Reviva’s financial position and working capital.

 

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Reviva is heavily dependent on the success of RP5063, its only advanced product candidate, which is still under clinical development, and if RP5063 does not receive regulatory approval or is not successfully commercialized, Reviva’s business will be harmed.

 

Reviva currently has no products that are approved for commercial sale and may never be able to develop marketable drug products. Reviva expects that a substantial portion of its efforts and expenditures in the foreseeable future will be devoted to RP5063. Reviva’s only other product candidate is RP1208, which is in the pre-clinical phase. Reviva does not expect to allocate a significant portion of its efforts or resources to the clinical trials or development of this product candidate in the foreseeable future. Accordingly, Reviva’s business currently depends heavily on the successful development, regulatory approval and commercialization of RP5063. Reviva cannot be certain that RP5063 will receive regulatory approval or be successfully commercialized even if Reviva receives regulatory approval. The research, testing, manufacturing, labeling, approval, sale, marketing and distribution of drug products are and will remain subject to extensive regulation by the FDA and other regulatory authorities in the United States and other countries that each have differing regulations. Reviva is not permitted to market RP5063 in the United States until it receives approval of a new drug application, or NDA, from the FDA, or in any foreign countries until it receives the requisite approval from such countries. Reviva has not submitted an NDA to the FDA or comparable applications to other regulatory authorities and does not expect to be in a position to do so for the foreseeable future. Obtaining approval of an NDA is an extensive, lengthy, expensive and inherently uncertain process, and the FDA may delay, limit or deny approval of RP5063 for many reasons, including:

 

·Reviva may not be able to demonstrate that RP5063 is safe and effective as a treatment for its targeted indications to the FDA’s satisfaction;

 

·the FDA may require additional phase 3 trials of RP5063 in schizophrenia, which would increase Reviva’s costs and prolong its development;

 

·the results of Reviva’s clinical trials may not meet the level of statistical or clinical significance required by the FDA for marketing approval;

 

·the FDA may disagree with the number, design, size, conduct or implementation of Reviva’s clinical trials;

 

·the contract research organizations, or CROs, that Reviva retains to conduct clinical trials may take actions outside of Reviva’s control that materially adversely impact its clinical trials;

 

·the FDA may not find the data from preclinical studies and clinical trials sufficient to demonstrate that the clinical and other benefits of RP5063 outweigh its safety risks;

 

·the FDA may disagree with Reviva’s interpretation of data from its preclinical studies and clinical trials or may require that Reviva conduct additional studies;

 

·the FDA may not accept data generated at Reviva’s clinical trial sites;

 

·if Reviva’s NDA is reviewed by an advisory committee, the FDA may have difficulties scheduling an advisory committee meeting in a timely manner or the advisory committee may recommend against approval of Reviva’s application or may recommend that the FDA require, as a condition of approval, additional preclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions;

 

·the FDA may require development of a risk evaluation and mitigation strategy, or REMS, as a condition of approval;

 

·the FDA may identify deficiencies in the manufacturing processes or facilities of Reviva’s third-party manufacturers; or

 

·the FDA may change its approval policies or adopt new regulations.

 

The COVID-19 outbreak and global pandemic could adversely impact Reviva’s business, including its clinical trials.

 

Public health crises such as pandemics or similar outbreaks could adversely impact Reviva’s business. In December 2019, a novel strain of coronavirus, or COVID-19, surfaced in Wuhan, China. Since then, COVID-19 has spread globally. As a result of the COVID-19 outbreak, or similar pandemics, and government response to pandemics, Reviva has and may in the future experience disruptions that could severely impact its business and clinical trials, including:

 

·delays or difficulties in enrolling patients in Reviva’s clinical trials;

 

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·interruption of key clinical trial activities, such as clinical trial site data monitoring and efficacy, safety and translational data collection, processing and analyses, due to limitations on travel imposed or recommended by federal, state or local governments, employers and others or interruption of clinical trial subject visits, which may impact the collection and integrity of subject data and clinical study endpoints;

 

·delays or difficulties in initiating or expanding clinical trials, including delays or difficulties with clinical site initiation and recruiting clinical site investigators and clinical site staff;

 

·increased rates of patients withdrawing from Reviva’s clinical trials following enrollment as a result of contracting COVID-19 or being forced to quarantine;

 

·diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as Reviva’s clinical trial sites and hospital staff supporting the conduct of Reviva’s clinical trials;

 

·delays or disruptions in preclinical experiments and investigational new drug application-enabling studies due to restrictions of on-site staff and unforeseen circumstances at contract research organizations and vendors;

 

·interruption or delays in the operations of the FDA and comparable foreign regulatory agencies; and

 

·interruption of, or delays in receiving, supplies of Reviva’s product candidates from its contract manufacturing organizations due to staffing shortages, production slowdowns or stoppages and disruptions in delivery systems.

 

The COVID-19 outbreak continues to rapidly evolve. The extent to which the outbreak may impact Reviva’s business and clinical trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions and actions to contain the outbreak or treat its impact, such as social distancing and quarantines or lock-downs in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

 

Reviva will require additional capital to fund its operations, and if Reviva fails to obtain necessary financing, Reviva may not be able to complete the development and commercialization of RP5063 or RP1208.

 

Reviva expects to spend substantial amounts to complete the development of, seek regulatory approvals for, and commercialize RP5063 and RP 1208. With the expected proceeds from the Business Combination and potential proceeds from a PIPE Investment, Reviva intends to proceed with the development and potential commercialization of RP5063 for the treatment of schizophrenia. However, Reviva will require additional capital to complete the development and potential commercialization of RP5063 for the treatment of schizophrenia and to continue the development of RP5063 for PAH, IPF, BD, MDD, AD, PD, ADHD/ADD and other potential indications, and to continue the development of RP1208 for the treatment of depression and obesity. No assurance can be given that such additional capital will be available on terms acceptable to Reviva, if at all. If Reviva is unable to raise capital when needed or on acceptable terms, Reviva could be forced to delay, reduce or eliminate its planned development programs or any future commercialization efforts. In addition, attempting to secure additional financing may divert the time and attention of Reviva’s management from day-to-day activities and harm Reviva’s product candidate development efforts. Because the length of time and activities associated with successful development of RP5063 and RP1208 is highly uncertain, Reviva is unable to estimate the actual funds it will require for development and any approved marketing and commercialization activities. Reviva’s future funding requirements, both near and long-term, will depend on many factors, including, but not limited to:

 

·the initiation, progress, timing, costs and results of Reviva’s planned clinical trials for RP5063 and pre-clinical research for RP1208;

 

·the outcome, timing and cost of meeting regulatory requirements established by the FDA, the European Medicines Agency, or EMA, and other comparable foreign regulatory authorities;

 

·the cost of filing, prosecuting, defending and enforcing Reviva’s patent claims and other intellectual property rights;

 

·the cost of defending potential intellectual property disputes, including patent infringement actions brought by third parties against Reviva with respect to RP5063, RP1208 or any future product candidates;

 

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·the effect of competing technological and market developments;

 

·the cost and timing of completion of commercial-scale manufacturing activities;

 

·the cost of establishing sales, marketing and distribution capabilities for RP5063, RP1208 or any future product candidates, in regions where Reviva chooses to commercialize Reviva’s products on its own; and

 

·the initiation, progress, timing and results of Reviva’s commercialization of RP5063, RP1208 or any future product candidates, if approved for commercial sale.

 

Reviva cannot be certain that such funding will be available on acceptable terms, or at all. If Reviva is unable to raise additional capital in sufficient amounts or on terms acceptable to Reviva, Reviva may have to significantly delay, scale back or discontinue the development or commercialization of RP5063 or RP1208 or potentially discontinue operations.

 

Raising additional funds by issuing securities may cause dilution to existing shareholders, and raising funds through lending and licensing arrangements may restrict Reviva’s operations or require it to relinquish proprietary rights.

 

Reviva expects that significant additional capital will be needed in the future to continue its planned operations. Until such time, if ever, as Reviva can generate substantial product revenues, Reviva expects to finance its cash needs through a combination of equity offerings, debt financings, strategic alliances and license and development agreements in connection with any collaborations. Reviva does not have any committed external source of funds. To the extent that Reviva raises additional capital by issuing equity securities, Reviva’s existing shareholders’ ownership may experience substantial dilution, and the terms of these securities may include liquidation or other preferences that adversely affect then-existing stockholders’ interests. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting Reviva’s ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

 

If Reviva raises additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, Reviva may have to relinquish valuable rights to its technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to Reviva. Any debt financing Reviva enters into may involve covenants that restrict its operations. These restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of Reviva’s assets as well as prohibitions on its ability to create liens, pay dividends, redeem Reviva’s shares or make investments. If Reviva is unable to raise additional funds through equity or debt financings when needed, Reviva may be required to delay, limit, reduce or terminate its product development or future commercialization efforts or grant rights to develop and market product candidates that Reviva would otherwise develop and market itself.

 

Reviva will need to expand its organization, and Reviva may experience difficulties in managing this growth, which could disrupt its operations.

 

As of September 30, 2020, Reviva had 4 employees, and Reviva is highly dependent on its management personnel, especially its Chief Executive Officer, Laxminarayan Bhat. Following the completion of the Business Combination, Reviva expects to hire a significant number of additional employees for its managerial, clinical, scientific, operational, sales and marketing teams. Reviva may have operational difficulties in connection with identifying, hiring and integrating new personnel. Future growth would impose significant additional responsibilities on Reviva’s management, including the need to identify, recruit, maintain, motivate and integrate additional employees, consultants and contractors. Also, Reviva’s management has no prior experience in managing these growth activities, and may need to divert a disproportionate amount of its attention away from Reviva’s day-to-day activities and devote a substantial amount of time to such activities. Reviva may not be able to effectively manage the expansion of its operations, which may result in weaknesses in Reviva’s infrastructure, give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Reviva’s expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of product candidates. If Reviva’s management is unable to effectively manage its growth, Reviva’s expenses may increase more than expected, its ability to generate and/or grow revenues could be reduced, and Reviva may not be able to implement its business strategy. Reviva’s future financial performance and Reviva’s ability to commercialize RP5063 and RP1208 and compete effectively will depend, in part, on Reviva’s ability to effectively manage any future growth.

 

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Many of the other pharmaceutical companies that Reviva competes against for qualified personnel and consultants have greater financial and other resources, different risk profiles and a longer history in the industry than Reviva. They also may provide more diverse opportunities and better chances for career advancement. Some of these characteristics may be more appealing to high-quality candidates and consultants than what Reviva has to offer. If Reviva is unable to continue to attract and retain high-quality personnel and consultants, the rate and success at which Reviva can discover and develop product candidates and Reviva’s business will be limited.

 

Reviva’s employees, independent contractors, principal investigators, consultants, commercial collaborators, service providers and other vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have an adverse effect on Reviva’s results of operations.

 

Reviva is exposed to the risk that its employees and contractors, including principal investigators, consultants, commercial collaborators, service providers and other vendors may engage in fraudulent or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or other unauthorized activities that violate the laws and regulations of the FDA and other similar regulatory bodies, including those laws that require the reporting of true, complete and accurate information to such regulatory bodies; manufacturing standards; federal and state healthcare fraud and abuse and health regulatory laws and other similar foreign fraudulent misconduct laws; or laws that require the true, complete and accurate reporting of financial information or data. Activities subject to these laws also involve the improper use or misrepresentation of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to Reviva’s reputation. It is not always possible to identify and deter third-party misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting Reviva from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against Reviva, and Reviva is not successful in defending itself or asserting its rights, those actions could have a significant impact on Reviva’s business and financial results, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, reputational harm, diminished profits and future earnings, and curtailment of Reviva’s operations, any of which could adversely affect Reviva’s ability to operate its business and its results of operations.

 

If Reviva seeks to enter into strategic alliances for the development of RP5063 or RP1208 but fails to enter into and maintain successful strategic alliances, Reviva’s development costs may increase and its ability to develop RP5063 or RP1208 may be significantly delayed.

 

Reviva may seek to enter into strategic alliances or collaborative arrangements with pharmaceutical companies or other industry participants in order to advance its development of RP5063 or, in the future, RP1208 or other product candidates, and to reduce Reviva’s costs of development. If Reviva seeks such alliances or collaborative arrangements, Reviva may not be able to negotiate such alliances or collaborative arrangements on acceptable terms, if at all. Reviva faces significant competition from other biopharmaceutical companies for appropriate partners in such alliances or arrangements. Furthermore, if Reviva is successful in entering strategic alliances or collaborative arrangements, Reviva may not be able to maintain such alliances or arrangements for a sufficient amount of time to commercialize RP5063, RP1208 or other product candidates, or such alliances or arrangements may not result in successful development of Reviva’s products. If Reviva seeks suitable alliances or arrangements but then fail to create or to maintain these, Reviva may have to limit the size or scope of, or delay, its development of RP5063, RP1208 or other future product candidates. If Reviva elects to fund its development or research programs on its own, Reviva will have to increase its expenditures and will need to obtain additional funding, which may be unavailable or available only on unfavorable terms. See “Risks Related to Reviva’s Business and Industry - Risks Related to Reviva’s Business, Financial Position and Capital Requirements - Reviva will require additional capital to fund its operations, and if Reviva fails to obtain necessary financing, Reviva may not be able to complete the development and commercialization of RP5063.

 

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To the extent Reviva is able to enter into collaborative arrangements or strategic alliances, Reviva will be exposed to risks related to those collaborations and alliances.

  

Biotechnology companies at Reviva’s stage of development may become dependent upon collaborative arrangements or strategic alliances to complete the development and commercialization of drug candidates, particularly after the phase 2 stage of clinical testing. If Reviva elects to enter into collaborative arrangements or strategic alliances, these arrangements may place the development of RP5063, RP1208 or other future product candidates outside Reviva’s control, may require Reviva to relinquish important rights or may otherwise be entered on terms unfavorable to Reviva.

 

Dependence on collaborative arrangements or strategic alliances will subject Reviva to a number of risks, including the risk that:

 

·Reviva may not be able to control the amount and timing of resources that its collaborators may devote to RP5063 and RP1208;

 

·Reviva’s collaborators may experience financial difficulties;

 

·Reviva may be required to relinquish important rights, such as marketing and distribution rights;

 

·business combinations or significant changes in a collaborator’s business strategy may also adversely affect a collaborator’s willingness or ability to complete its obligations under any arrangement;

 

·a collaborator could independently move forward with a competing drug candidate developed either independently or in collaboration with others, including Reviva’s competitors; and

 

·collaborative arrangements are often terminated or allowed to expire, which would delay the development and may increase the cost of developing Reviva’s drug candidates.

 

Reviva’s business and operations would suffer in the event its computer systems and networks fail.

 

Reviva’s business depends on the proper functioning and availability of its computer systems and networks. Reviva’s computer systems, as well as those of its CROs and other contractors and consultants, are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. If such an event were to occur and cause interruptions in Reviva’s operations, it could result in a material disruption of Reviva’s drug development programs. For example, the loss of preclinical or clinical trial data from completed, ongoing or planned trials could result in delays in Reviva’s regulatory approval efforts and significantly increase its costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of or damage to Reviva’s data or applications, or inappropriate disclosure of personal, confidential or proprietary information, Reviva could incur liability and the further development of RP5063, RP1208 or any future product candidate could be delayed.  Any successful cyber security attack or other unauthorized attempt to access Reviva’s systems also could result in negative publicity which could damage its reputation or brand with its patients, referral sources, payors or other third parties and could subject Reviva to substantial penalties under HIPAA and other federal and state privacy laws, in addition to private litigation with those affected.

 

Potential product liability lawsuits against Reviva could cause Reviva to incur substantial liabilities and limit commercialization of any products that Reviva may develop.

 

The use of RP5063 and RP1208 in clinical trials and the sale of any products for which Reviva obtains marketing approval exposes Reviva to the risk of product liability claims. Product liability claims might be brought against Reviva by consumers, health care providers, pharmaceutical companies or others selling or otherwise coming into contact with its products. On occasion, large judgments have been awarded in class action lawsuits based on drugs that had unanticipated adverse effects. If Reviva cannot successfully defend against product liability claims, Reviva could incur substantial liability and costs. In addition, regardless of merit or eventual outcome, product liability claims may result in:

 

·impairment of Reviva’s business reputation and significant negative media attention;

 

·withdrawal of participants from Reviva’s clinical trials;

 

·significant costs to defend the related litigation;

 

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·distraction of management’s attention from Reviva’s primary business;

 

·substantial monetary awards to patients or other claimants;

 

·inability to commercialize RP5063, RP1208 or any future product candidate;

 

·product recalls, withdrawals or labeling, marketing or promotional restrictions;

 

·decreased demand for RP5063, RP1208 or any future product candidate, if approved for commercial sale; and

 

·loss of revenue.

 

Any product liability insurance coverage Reviva acquires in the future may not be sufficient to reimburse Reviva for any expenses or losses it may suffer. Moreover, insurance coverage is becoming increasingly expensive and in the future Reviva may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect it against losses due to liability. If Reviva obtains marketing approval for RP5063 or RP1208, Reviva intends to acquire insurance coverage to include the sale of commercial products; however, Reviva may be unable to obtain product liability insurance on commercially reasonable terms or in adequate amounts. A successful product liability claim or series of claims brought against Reviva could cause its share price to decline and, if judgments exceed Reviva’s insurance coverage, could adversely affect Reviva’s results of operations and business, including preventing or limiting the commercialization of any product candidates it develops.

 

Risks Related to Clinical Development, Regulatory Approval and Commercialization

 

Clinical trials are very expensive, time-consuming, difficult to design and implement and involve an uncertain outcome.

 

Reviva’s only advanced product candidate, RP5063, is still in development and will require extensive clinical testing before Reviva is prepared to submit an NDA for regulatory approval. Reviva cannot predict with any certainty if or when it might submit an NDA for regulatory approval for RP5063 or whether any such NDA will be approved by the FDA. Human clinical trials are very expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements. The clinical trial process is also time-consuming. Reviva estimates that the phase 3 clinical trials of RP5063 for schizophrenia indication will take at least four years to complete. Furthermore, failure can occur at any stage of the trials, and Reviva could encounter problems that cause it to abandon or repeat clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials, and the results of early clinical trials of RP5063 therefore may not be predictive of the results of Reviva’s planned phase 3 clinical study.

 

The commencement and completion of clinical trials may be delayed by one or more factors, including:

 

·failure to obtain regulatory approval to commence a trial, including in other countries in the global portion of Reviva’s planned phase 3 clinical study;

 

·unforeseen safety issues;

 

·determination of dosing issues;

 

·lack of effectiveness during clinical trials;

 

·inability to reach agreement on acceptable terms with prospective CROs and clinical trial sites;

 

·slower than expected rates of patient recruitment or failure to recruit suitable patients to participate in a trial;

 

·failure to manufacture sufficient quantities of a drug candidate for use in clinical trials;

 

·inability to monitor patients adequately during or after treatment; and

 

·inability or unwillingness of medical investigators to follow Reviva’s clinical protocols.

 

In addition, Reviva’s management has limited prior experience in managing and completing late-stage clinical trials, and may not be able to successfully design and implement these trials or respond to adverse factors that may arise in the course of conducting these trials.

 

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Further, Reviva, the FDA or an institutional review board, or IRB, at a clinical trial site may suspend Reviva’s clinical trials at any time if it appears that Reviva or its collaborators are failing to conduct a trial in accordance with regulatory requirements, including the FDA’s current Good Clinical Practice, or GCP, regulations, that Reviva is exposing participants to unacceptable health risks, or if the FDA finds deficiencies in Reviva’s investigational new drug, or IND, submissions or the conduct of these trials.

  

Therefore, Reviva cannot predict with any certainty the schedule for commencement and completion of future clinical trials. If Reviva experiences delays in the commencement or completion of its clinical trials, or if Reviva terminates a clinical trial prior to completion, the commercial prospects of RP5063 could be harmed, and Reviva’s ability to generate revenues from RP5063 may be delayed. In addition, any delays in Reviva’s clinical trials could increase Reviva’s costs, slow down the approval process and jeopardize its ability to commence product sales and generate revenues. Any of these occurrences may harm Reviva’s business, financial condition and results of operations.

 

Moreover, while Reviva is not currently intending to engage any principal investigators as advisors or consultants, it is conceivable that principal investigators for Reviva’s clinical trials may serve as scientific advisors or consultants from time to time and receive compensation in connection with such services. Under certain circumstances, Reviva may be required to report some of these relationships to the FDA. The FDA may conclude that a financial relationship between Reviva and a principal investigator has created a conflict of interest or otherwise affected interpretation of the study. FDA may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized. This could result in a delay in approval, or rejection, of Reviva’s marketing applications by the FDA and may ultimately lead to the denial of marketing approval of one or more of Reviva’s product candidates.

 

The results of Reviva’s clinical trials may not support its RP5063, RP1208 and any future product candidate claims.

 

Even if Reviva’s clinical trials are completed as planned, Reviva cannot be certain that its results will support the safety and effectiveness of RP5063 for the treatment of schizophrenia or any other potential indication, including but not limited to PAH, IPF, BD, MDD, AD, PD, ADHD/ADD, or any of other product candidates, including RP1208. Success in preclinical testing and early clinical trials does not ensure that later clinical trials will be successful, and Reviva cannot be sure that the results of later clinical trials will replicate the results of prior clinical trials and preclinical testing. A failure of a clinical trial to meet its predetermined endpoints would likely cause Reviva to abandon a product candidate and may delay development of any other product candidates. Any delay in, or termination of, Reviva’s clinical trials will delay the submission of Reviva’s NDAs with the FDA and, ultimately, Reviva’s ability to commercialize RP5063, RP1208 or any future product candidate, and generate product revenues.

 

Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside Reviva’s control.

 

Reviva may encounter delays in enrolling, or be unable to enroll, a sufficient number of patients to complete any of its clinical trials, and even once enrolled Reviva may be unable to retain a sufficient number of patients to complete any of its trials. Patient enrollment and retention in clinical trials depends on many factors, including the size of the patient population, the nature of the trial protocol, the existing body of safety and efficacy data with respect to the study drug, the number and nature of competing treatments and ongoing clinical trials of competing drugs for the same indication, the proximity of patients to clinical sites and the eligibility criteria for the study. Furthermore, any negative results Reviva may report in clinical trials of its product candidate may make it difficult or impossible to recruit and retain patients in other clinical trials of that same product candidate. Delays or failures in planned patient enrollment or retention may result in increased costs, program delays or both, which could have a harmful effect on Reviva’s ability to develop RP5063, RP1208 or any future product candidate, or could render further development impossible. In addition, Reviva expects to rely on CROs and clinical trial sites to ensure proper and timely conduct of Reviva’s future clinical trials and, while Reviva intends to enter into agreements governing their services, Reviva will be limited in its ability to compel their actual performance.

 

The continued spread of COVID-19 globally could adversely impact Reviva’s clinical trial operations, including its ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 if an outbreak occurs in their geography. Disruptions or restrictions on the ability of patients enrolled in Reviva’s clinical studies to travel, or the ability of staff at study sites to travel, as well as temporary closures of Reviva’s facilities or the facilities of Reviva’s clinical trials partners and their contract manufacturers, would negatively impact Reviva’s clinical trial activities.

 

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Reviva faces significant competition from other biotechnology and pharmaceutical companies, and Reviva’s operating results will suffer if it fails to compete effectively.

 

Drug development is highly competitive and subject to rapid and significant technological advancements. As a significant unmet medical need exists for the treatment of schizophrenia, there are several large and small pharmaceutical companies focused on delivering therapeutics for the treatment of schizophrenia. Further, it is likely that additional drugs will become available in the future for the treatment of schizophrenia.

 

Reviva is aware of other companies that are working to develop drugs that would compete against RP5063 for schizophrenia treatment. Many of Reviva’s existing or potential competitors have substantially greater financial, technical and human resources than Reviva does and significantly greater experience in the discovery and development of product candidates, as well as in obtaining regulatory approvals of those product candidates in the United States and in foreign countries. Reviva’s current and potential future competitors also have significantly more experience commercializing drugs that have been approved for marketing.

 

Mergers and acquisitions in the pharmaceutical and biotechnology industries could result in even more resources being concentrated among a small number of Reviva’s competitors.

 

Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries. Reviva’s competitors may succeed in developing, acquiring or licensing, on an exclusive basis, drugs that are more effective or less costly than any product candidate that Reviva may develop.

 

Reviva will face competition from other drugs currently approved or that will be approved in the future for the treatment of schizophrenia. Therefore, Reviva’s ability to compete successfully will depend largely on its ability to:

 

·develop and commercialize medicines that are superior to other products in the market;

 

·demonstrate through its clinical trials that RP5063 is differentiated from existing and future therapies;

 

·attract qualified scientific, product development and commercial personnel;

 

·obtain patent or other proprietary protection for Reviva’s medicines;

 

·obtain required regulatory approvals;

 

·obtain coverage and adequate reimbursement from, and negotiate competitive pricing with, third- party payors; and

 

·successfully collaborate with pharmaceutical companies in the discovery, development and commercialization of new medicines.

 

The availability of Reviva’s competitors’ products could limit the demand, and the price Reviva is able to charge, for any product candidate it develops. The inability to compete with existing or subsequently introduced drugs would have an adverse impact on Reviva’s business, financial condition and prospects.

 

Established pharmaceutical companies may invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make RP5063 less competitive. In addition, any new product that competes with an approved product must demonstrate compelling advantages in efficacy, convenience, tolerability and safety in order to overcome price competition and to be commercially successful. Accordingly, Reviva’s competitors may succeed in obtaining patent protection, receiving FDA approval for or commercializing medicines before Reviva does, which would have an adverse impact on Reviva’s business and results of operations.

 

If Reviva is not able to obtain required regulatory approvals, Reviva will not be able to commercialize RP5063, RP1208 or any other product candidates, and its ability to generate revenue will be materially impaired.

 

RP5063 and the activities associated with its development and commercialization, including its design, research, testing, manufacture, safety, efficacy, recordkeeping, labeling, packaging, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by the EMA and similar regulatory authorities outside the United States. Failure to obtain marketing approval for RP5063 will prevent Reviva from commercializing it.

 

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Reviva has not received approval from regulatory authorities to market any product candidate in any jurisdiction, and it is possible that none of RP5063, RP1208 nor any other product candidates Reviva may seek to develop in the future will ever obtain the appropriate regulatory approvals necessary for Reviva to commence product sales.

 

Prior to submitting an NDA to the FDA, a marketing authorization application, or MAA, to the EMA, or an equivalent application to other foreign regulatory authorities for approval of RP5063, Reviva will need to complete its phase 3 clinical study.

 

Reviva expects to rely on third-party CROs and consultants to assist it in filing and supporting the applications necessary to gain marketing approvals. Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish RP5063’s safety and efficacy for that indication. Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the regulatory authorities.

 

Reviva may not be able to obtain or maintain orphan drug designation or exclusivity for its product candidate.

 

Reviva has been granted orphan drug designation in the United States for RP5063 for the treatment of IPF and PAH. Upon receipt of regulatory approval, orphan drug status will provide Reviva with seven years of market exclusivity in the United States under the Orphan Drug Act. However, there is no guarantee that the FDA will grant orphan drug designation for any of its drug candidates for any future indication, which would make Reviva ineligible for the additional exclusivity and other benefits of orphan drug designation. Moreover, there can be no assurance that another company also holding orphan drug designation for the same indication or which may receive orphan drug designation in the future will not receive approval prior to Reviva, in which case Reviva’s competitor would have the benefit of the seven years of market exclusivity, and Reviva would be unable to commercialize its product candidate for the same indication until the expiration of such seven-year period. Even if Reviva is the first to obtain approval for the orphan drug indication, there are circumstances under which a competing product may be approved for the same indication during Reviva’s seven-year period of exclusivity.

 

Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making a drug available in the Unites States for this type of disease or condition will be recovered from sales of the product. Orphan drug designation must be requested before submitting an NDA. After the FDA grants orphan drug designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. Orphan designation does not convey any advantage in or shorten the duration of regulatory review and approval process. In addition to the potential period of exclusivity, orphan designation makes a company eligible for grant funding of up to $400,000 per year for four years to defray costs of clinical trial expenses, tax credits for clinical research expenses and potential exemption from the FDA application user fee.

 

If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means the FDA may not approve any other applications to market the same drug for the same indication for seven years, except in limited circumstances, such as (i) the drug’s orphan designation is revoked; (ii) its marketing approval is withdrawn; (iii) the orphan exclusivity holder consents to the approval of another applicant’s product; (iv) the orphan exclusivity holder is unable to assure the availability of a sufficient quantity of drug; or (v) a showing of clinical superiority to the product with orphan exclusivity by a competitor product. If a drug designated as an orphan product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan drug exclusivity. There can be no assurance that Reviva will receive orphan drug designation for RP5063 for any additional indications or for RP1208, if Reviva elects to seek such designation.

 

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RP5063, RP1208 and any future product candidate may cause adverse effects or have other properties that could delay or prevent its regulatory approval or limit the scope of any approved label or market acceptance.

 

Adverse events caused by RP5063, RP1208 and any future product candidate could cause Reviva, other reviewing entities, clinical trial sites or regulatory authorities to interrupt, delay or halt clinical trials and could result in the denial of regulatory approval. If an unacceptable frequency or severity of adverse events are reported in Reviva’s clinical trials for RP5063, RP1208 or any future product candidates, Reviva’s ability to obtain regulatory approval for such product candidates may be negatively impacted.

 

Furthermore, if any of Reviva’s product candidates are approved and then cause serious or unexpected side effects, a number of potentially significant negative consequences could result, including:

 

·regulatory authorities may withdraw their approval of the product or require a REMS to impose restrictions on its distribution or other risk management measures;

 

·regulatory authorities may require the addition of labeling statements, such as warnings or contraindications;

 

·Reviva may be required to change the way the product is administered or to conduct additional clinical trials;

 

·Reviva could be sued and held liable for harm caused to patients;

 

·

Reviva could elect to discontinue the sale of its products; and

 

·Reviva’s reputation may suffer.

 

Any of these events could prevent Reviva from achieving or maintaining market acceptance of the affected product candidate and could substantially increase the costs of commercializing RP5063, RP1208 and any future product candidate.

 

Because the results of pre-clinical testing are not necessarily predictive of future results, RP1208 may not have favorable results in Reviva’s planned clinical trials.

 

Any positive results from Reviva’s pre-clinical testing of RP1208 may not necessarily be predictive of the results from Reviva’s planned clinical trials. Many companies in the pharmaceutical industry have suffered significant setbacks in clinical trials after achieving positive results in pre-clinical development, and Reviva cannot be certain that it will not face similar setbacks. The pre-clinical data Reviva has obtained for RP1208 may not predict results from studies in larger numbers of subjects drawn from more diverse populations or in a commercial setting, and also may not predict the ability of RP1208 to achieve its intended goals, or to do so safely.

 

Moreover, pre-clinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in pre-clinical studies and clinical trials nonetheless failed to obtain FDA or EMA approval. If Reviva fails to produce positive results in its clinical trials, the development timeline and regulatory approval and commercialization prospects for its products and, correspondingly, Reviva’s business and financial prospects, would be materially adversely affected.

 

Even if Reviva obtains FDA approval for RP5063, RP1208 or any future product candidate in the United States, Reviva may never obtain approval for or commercialize it in any other jurisdiction, which would limit Reviva’s ability to realize its full market potential.

 

In order to market any products in any particular jurisdiction, Reviva must establish and comply with numerous and varying regulatory requirements on a country-by-country basis regarding safety and efficacy. Approval by FDA in the United States does not ensure approval by regulatory authorities in other countries or jurisdictions. In addition, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not guarantee regulatory approval in any other country. Approval processes vary among countries and can involve additional product testing and validation and additional administrative review periods. Seeking foreign regulatory approval could result in difficulties and costs for us and require additional preclinical studies or clinical trials which could be costly and time consuming. Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of Reviva’s products in those countries. Reviva does not have any product candidates approved for sale in any jurisdiction, including in international markets, and Reviva does not have experience in obtaining regulatory approval in international markets. If Reviva fails to comply with regulatory requirements in international markets or to obtain and maintain required approvals, or if regulatory approvals in international markets are delayed, Reviva’s target market will be reduced and Reviva’s ability to realize the full market potential of any product it develops will be unrealized.

 

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Even if Reviva obtains regulatory approval for RP5063, RP1208 or any future product candidate, Reviva will still face extensive regulatory requirements and its products may face future development and regulatory difficulties.

 

Any product candidate for which Reviva obtains marketing approval, along with the manufacturing processes, post-approval clinical data, labeling, packaging, distribution, adverse event reporting, storage, recordkeeping, export, import, advertising and promotional activities for such product, among other things, will be subject to extensive and ongoing requirements of and review by the FDA and other regulatory authorities. These requirements include submissions of safety and other post-marketing information and reports, establishment registration and drug listing requirements, continued compliance with current Good Manufacturing Practice, or cGMP, requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and recordkeeping and current GCP requirements for any clinical trials that Reviva conducts post-approval. Even if marketing approval of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed or to the conditions of approval, including any requirement to implement a REMS. If RP5063, RP1208 or any future product candidate receives marketing approval, the accompanying label may limit the approved use of Reviva’s drug candidate, which could limit sales of the product.

 

The FDA may also impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of the product. The FDA closely regulates the post-approval marketing and promotion of drugs to ensure drugs are marketed only for the approved indications and in accordance with the provisions of the approved labeling. The FDA imposes stringent restrictions on manufacturers’ communications regarding off-label use and if Reviva does not market its products for their approved indications, Reviva may be subject to enforcement action for off-label marketing. Violations of the Federal Food, Drug, and Cosmetic Act relating to the promotion of prescription drugs may lead to FDA enforcement actions and investigations alleging violations of federal and state health care fraud and abuse laws, as well as state consumer protection laws.

 

In addition, later discovery of previously unknown adverse events or other problems with Reviva’s products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including:

 

·restrictions on manufacturing such products;

 

·restrictions on the labeling or marketing of a product;

 

·restrictions on product distribution or use;

 

·requirements to conduct post-marketing studies or clinical trials;

 

·warning letters;

 

·withdrawal of the products from the market;

 

·refusal to approve pending applications or supplements to approved applications that Reviva submits;

 

·recall of products;

 

·fines, restitution or disgorgement of profits or revenues;

 

·suspension or withdrawal of marketing approvals;

 

·refusal to permit the import or export of Reviva’s products;

 

·product seizure; or

 

·injunctions or the imposition of civil or criminal penalties.

 

The FDA’s policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of RP5063, RP1208 or any future product candidate. If Reviva is slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if Reviva is not able to maintain regulatory compliance, Reviva may lose any marketing approval that it may have obtained.

 

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Even if RP5063, RP1208 or any future product candidate receives marketing approval, it may fail to achieve market acceptance by physicians, patients, third-party payors or others in the medical community necessary for commercial success.

 

If RP5063, RP1208 or any future product candidate receives marketing approval, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community. If it does not achieve an adequate level of acceptance, Reviva may not generate significant product revenues and become profitable. The degree of market acceptance of RP5063, RP1208 or any future product candidate, if approved for commercial sale, will depend on a number of factors, including, but not limited to:

 

·the efficacy and potential advantages compared to alternative treatments;

 

·effectiveness of sales and marketing efforts;

 

·the cost of treatment in relation to alternative treatments, including any similar generic treatments;

 

·Reviva’s ability to offer its products for sale at competitive prices;

 

·the convenience and ease of administration compared to alternative treatments;

 

·the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;

 

·the strength of marketing and distribution support;

 

·the availability of third-party coverage and adequate reimbursement;

 

·the prevalence and severity of any side effects; and

 

·any restrictions on the use of Reviva’s product together with other medications.

 

Because Reviva expects sales of RP5063, RP1208 or any future product candidate, if approved, to generate substantially all of its product revenues for the foreseeable future, the failure of this product to find market acceptance would harm Reviva’s business and require it to seek additional financing.

 

If Reviva is unable to establish sales, marketing and distribution capabilities either on its own or in collaboration with third-parties, Reviva may not be successful in commercializing RP5063, RP1208 or any future product candidate, if approved.

 

Reviva does not have any infrastructure for the sales, marketing or distribution of its products, and the cost of establishing and maintaining such an organization may exceed the cost-effectiveness of doing so. In order to market any product that may be approved, Reviva must build its sales, distribution, marketing, managerial and other non-technical capabilities or make arrangements with third parties to perform these services. To achieve commercial success for any product for which Reviva has obtained marketing approval, Reviva will need a sales and marketing organization.

 

Reviva expects to build a focused sales, distribution and marketing infrastructure to market RP5063, RP1208 or any future product candidate in the United States, if approved. There are significant expenses and risks involved with establishing Reviva’s own sales, marketing and distribution capabilities, including its ability to hire, retain and appropriately incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel, and effectively manage a geographically dispersed sales and marketing team. Any failure or delay in the development of Reviva’s internal sales, marketing and distribution capabilities could delay any product launch, which would adversely impact the commercialization of RP5063, RP1208 or any future product candidate. For example, if the commercial launch of RP5063, RP1208 or any future product candidate for which Reviva recruits a sales force and establish marketing capabilities is delayed or does not occur for any reason, Reviva would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and Reviva’s investment would be lost if Reviva cannot retain or reposition its sales and marketing personnel.

 

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Factors that may inhibit Reviva’s efforts to commercialize Reviva’s products on its own include:

 

·Reviva’s inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;

 

·the inability of sales personnel to obtain access to physicians or attain adequate numbers of physicians to prescribe any drugs; and

 

·unforeseen costs and expenses associated with creating an independent sales and marketing organization.

 

Reviva does not anticipate having the resources in the foreseeable future to allocate to the sales and marketing of RP5063 in markets outside of the United States. Therefore, Reviva’s future success will depend, in part, on its ability to enter into and maintain collaborative relationships for such capabilities, the collaborator’s strategic interest in the product and such collaborator’s ability to successfully market and sell the product. Reviva intends to pursue collaborative arrangements regarding the sale and marketing of RP5063, RP1208 or any future product candidate, if approved, for markets outside of the United States; however, Reviva cannot assure you that it will be able to establish or maintain such collaborative arrangements, or if able to do so, that they will have effective sales forces. To the extent that Reviva depends on third parties for marketing and distribution, any revenues Reviva receives will depend upon the efforts of such third parties, and there can be no assurance that such efforts will be successful.

 

If Reviva is unable to build its own sales force or negotiate a collaborative relationship for the commercialization of RP5063, RP1208 or any future product candidate Reviva may be forced to delay the potential commercialization of RP5063, RP1208 or any future product candidate or reduce the scope of its sales or marketing activities for RP5063, RP1208 or any future product candidate. If Reviva elects to increase its expenditures to fund commercialization activities itself, Reviva will need to obtain additional capital, which may not be available to Reviva on acceptable terms, or at all. If Reviva does not have sufficient funds, Reviva will not be able to bring RP5063, RP1208 or any future product candidate to market or generate product revenue. Reviva could enter into arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be ideal and Reviva may be required to relinquish rights to RP5063, RP1208 or any future product candidate or otherwise agree to terms unfavorable to it, any of which may have an adverse effect on Reviva’s business, operating results and prospects.

 

If Reviva is unable to establish adequate sales, marketing and distribution capabilities, either on its own or in collaboration with third parties, Reviva will not be successful in commercializing RP5063, RP1208 or any future product candidate and may not become profitable. Reviva will be competing with many companies that currently have extensive and well-funded marketing and sales operations. Without an internal team or the support of a third party to perform marketing and sales functions, Reviva may be unable to compete successfully against these more established companies.

 

If Reviva obtains approval to commercialize any products outside of the United States, a variety of risks associated with international operations could materially adversely affect its business.

 

If RP5063, RP1208 or any future product candidate is approved for commercialization, Reviva intends to enter into agreements with third parties to market it in certain jurisdictions outside the United States. Reviva expects that it will be subject to additional risks related to international operations or entering into international business relationships, including:

 

·different regulatory requirements for drug approvals and rules governing drug commercialization in foreign countries;

 

·reduced protection for intellectual property rights;

 

·unexpected changes in tariffs, trade barriers and regulatory requirements;

 

·economic weakness, including inflation, or political instability in particular foreign economies and markets;

 

·compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

 

·foreign reimbursement, pricing and insurance regimes;

 

·foreign taxes;

 

·foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country;

 

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·workforce uncertainty in countries where labor unrest is more common than in the United States;

 

·potential noncompliance with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act 2010 and similar anti-bribery and anticorruption laws in other jurisdictions;

 

·production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and

 

·business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires.

 

Reviva has no prior experience in these areas. In addition, there are complex regulatory, tax, labor and other legal requirements imposed by both the European Union and many of the individual countries in Europe with which Reviva will need to comply.

 

Reviva’s subsidiary may not be in compliance with the laws of foreign countries, and it may face penalties and fines imposed by the Indian government.

 

Reviva has not retained local counsel to assess whether its subsidiary, Reviva Pharmaceuticals India Private Limited, is in compliance with applicable local law. There can be no assurance that Reviva will be able to initially meet such requirements or maintain compliance with the laws and regulations of each foreign country in which its subsidiary operates. As a result, Reviva and its subsidiary, Reviva Pharmaceuticals India Private Limited, may be subject to adverse legal consequences, including but not limited to penalties and fines, which could adversely affect the business, financial condition or results of operations of Reviva.

 

Reviva is subject to U.S. foreign investment regulations, which may impose additional burdens on or may limit certain investors’ ability to purchase Reviva common stock in amounts deemed by the U.S. government to confer control, potentially making Reviva’s common stock less attractive to investors, and may also impact Reviva’s ability to generate revenues outside of the U.S.

 

In 2018, Congress passed the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”), which expanded the jurisdiction of the Committee on Foreign Investment in the United States (“CFIUS”) to review direct or indirect foreign investments in U.S. companies.  Among other things, FIRRMA empowers CFIUS to require certain foreign investors to make mandatory filings, permits CFIUS, to charge filing fees related to such filings, and empowers CFIUS to self-initiate national security reviews of foreign direct and indirect investments in U.S. companies. In the case that CFIUS determines an investment to be a threat to national security, CFIUS has the power to unwind or place restrictions on the investment.  Any such restrictions on the ability to purchase shares of Reviva’s common stock may have the effect of delaying or deterring any particular investment and could also affect the price that some investors are willing to pay for Reviva’s common stock. In addition, such restrictions could also limit the opportunity for Reviva’s stockholders to receive a premium for their shares of Reviva common stock in relation to any potential change in control.

 

Reviva’s current and future relationships with foreign actors such as, health care and administrative professionals at foreign state owned hospitals or foreign government healthcare regulators will be subject to applicable anti-corruption laws regulatory laws, which could expose Reviva to penalties.

 

Reviva’s business operations and current and future arrangements with investigators, healthcare professionals, consultants, third-party payors and customers, may expose Reviva to broadly applicable anti-corruption and anti-bribery laws and regulations.  These laws may constrain the business or financial arrangements and relationships through which Reviva conducts its operations, including how Reviva markets, sells and distributes its products.  Such laws include the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”) prohibits any offer, payment, promise to pay or authorization to pay any money, gift or thing of value to any Foreign Official, political party, or candidate for office for the purpose of influencing any act or failure to act by the recipient, in his or her official capacity, in order to obtain or retain business, or inducing the recipient to use influence to affect a decision of a foreign government or agency in order to obtain or retain business for anyone.  The FCPA also imposes recordkeeping requirements and internal controls provisions, which, among other things, require the issuer to keep accurate books, records, and accounts.

 

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Reviva’s current and future relationships with investigators, health care professionals, consultants, third-party payors, and customers will be subject to applicable healthcare regulatory laws, which could expose Reviva to penalties.

 

Reviva’s business operations and current and future arrangements with investigators, healthcare professionals, consultants, third-party payors and customers, may expose Reviva to broadly applicable fraud and abuse and other healthcare laws and regulations. These laws may constrain the business or financial arrangements and relationships through which Reviva conducts its operations, including how Reviva researches, markets, sells and distributes its products for which Reviva obtains marketing approval. Such laws include:

 

·the federal Anti-Kickback Statute prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program, such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation; in addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act;

 

·the federal false claims laws, including the civil False Claims Act, impose criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;

 

·the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, imposes criminal and civil liability for, among other things, executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;

 

·HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

 

·the federal Physician Payment Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the government information related to payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, and requires applicable manufacturers and group purchasing organizations to report annually to the government ownership and investment interests held by the physicians described above and their immediate family members and payments or other “transfers of value” to such physician owners (covered manufacturers are required to submit reports to the government by the 90th day of each calendar year); and

 

·analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party payors, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

 

Efforts to ensure that Reviva’s current and future business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that Reviva’s business practices do not comply with current or future statutes, regulations, agency guidance or case law involving applicable healthcare laws. If Reviva’s operations are found to be in violation of any of these or any other health regulatory laws that may apply to it, Reviva may be subject to significant penalties, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgement, individual imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of Reviva’s operations, any of which could adversely affect Reviva’s ability to operate its business and Reviva’s results of operations. Defending against any such actions can be costly, time-consuming and may require significant financial and personnel resources. Therefore, even if Reviva is successful in defending against any such actions that may be brought against it, Reviva’s business may be impaired.

 

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Current and future legislation may increase the difficulty and cost for Reviva to obtain marketing approval of and commercialize RP5063, RP1208 or any future product candidate and affect the prices Reviva may obtain.

 

In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system and efforts to control health care costs, including drug prices, that could have a significant negative impact on Reviva’s business, including preventing, limiting or delaying regulatory approval of its drug candidates and reducing the sales and profits derived from Reviva’s products once they are approved.

 

For example, in the United States, the Patient Protection and Affordable Care Act of 2010 (“ACA”) substantially changed the way health care is financed by both governmental and private insurers and significantly affects the pharmaceutical industry. Many provisions of ACA impact the biopharmaceutical industry, including that in order for a biopharmaceutical product to receive federal reimbursement under the Medicare Part B and Medicaid programs or to be sold directly to U.S. government agencies, the manufacturer must extend discounts to entities eligible to participate in the drug pricing program under the Public Health Services Act, or PHS. Since its enactment, there have been judicial and Congressional challenges and amendments to certain aspects of ACA. There is continued uncertainty about the implementation of ACA, including the potential for further amendments to the ACA and legal challenges to or efforts to repeal the ACA.

 

Reviva cannot be sure whether additional legislative changes will be enacted, or whether government regulations, guidance or interpretations will be changed, or what the impact of such changes would be on the marketing approvals, sales, pricing, or reimbursement of its drug candidates or products, if any, may be.

 

Coverage and adequate reimbursement may not be available for RP5063, RP1208 or any future product candidate, which could make it difficult for Reviva to sell its products profitably.

 

Market acceptance and sales of any product candidates that Reviva develops, will depend in part on the extent to which reimbursement for these products and related treatments will be available from third-party payors, including government health administration authorities and private health insurers. Third-party payors decide which drugs they will pay for and establish reimbursement levels. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies. However, decisions regarding the extent of coverage and amount of reimbursement to be provided for any product candidates that Reviva develops will be made on a plan-by-plan basis. One payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage, and adequate reimbursement, for the product. Additionally, a third-party payor’s decision to provide coverage for a drug does not imply that an adequate reimbursement rate will be approved. Each plan determines whether or not it will provide coverage for a drug, what amount it will pay the manufacturer for the drug, and on what tier of its formulary the drug will be placed. The position of a drug on a formulary generally determines the co-payment that a patient will need to make to obtain the drug and can strongly influence the adoption of a drug by patients and physicians. Patients who are prescribed treatments for their conditions and providers prescribing such services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use Reviva’s products unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of its products.

 

A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. Reviva cannot be sure that coverage and reimbursement will be available for any product that it commercializes and, if reimbursement is available, what the level of reimbursement will be. Inadequate coverage and reimbursement may impact the demand for, or the price of, any product for which Reviva obtains marketing approval. If coverage and adequate reimbursement are not available, or are available only to limited levels, Reviva may not be able to successfully commercialize any product candidates that it develops.

 

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Additionally, there have been a number of legislative and regulatory proposals to change the healthcare system in the United States and in some foreign jurisdictions that could affect Reviva’s ability to sell any future drugs profitably. These legislative and regulatory changes may negatively impact the reimbursement for any future drugs, following approval.

 

Risks Related to Reviva’s Dependence on Third Parties

 

Reviva does not have its own manufacturing capabilities and will rely on third parties to produce clinical and commercial supplies of RP5063, RP1208 and any future product candidate.

 

Reviva does not have experience in drug formulation or manufacturing and does not own or operate, and does not expect to own or operate, facilities for product manufacturing, storage and distribution, or testing. Reviva also will rely on third-party manufacturers to supply it with sufficient quantities of RP5063 to be used, if approved, for the commercialization of RP5063. If Reviva is unable to initiate or continue its relationship with one or more of these third-party contractors, Reviva could experience delays in its development efforts as Reviva locates and qualifies new manufacturers.

 

Further, Reviva’s reliance on third-party manufacturers entails risks to which it would not be subject if Reviva manufactured product candidates itself, including:

 

·inability to meet Reviva’s product specifications and quality requirements consistently;

 

·delay or inability to procure or expand sufficient manufacturing capacity;

 

·manufacturing and product quality issues related to scale-up of manufacturing;

 

·costs and validation of new equipment and facilities required for scale-up;

 

·failure to comply with cGMP and similar foreign standards;

 

·inability to negotiate manufacturing agreements with third parties under commercially reasonable terms;

 

·termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to Reviva;

 

·reliance on a limited number of sources, and in some cases, single sources for product components, such that if Reviva is unable to secure a sufficient supply of these product components, Reviva will be unable to manufacture and sell RP5063, RP1208 or any future product candidate in a timely fashion, in sufficient quantities or under acceptable terms;

 

·lack of qualified backup suppliers for those components that are currently purchased from a sole or single source supplier;

 

·operations of Reviva’s third-party manufacturers or suppliers could be disrupted by conditions unrelated to Reviva’s business or operations, including the bankruptcy of the manufacturer or supplier;

 

·carrier disruptions or increased costs that are beyond Reviva’s control; and

 

·failure to deliver Reviva’s products under specified storage conditions and in a timely manner.

 

Any of these events could lead to clinical trial delays, failure to obtain regulatory approval or impact Reviva’s ability to successfully commercialize its products. Some of these events could be the basis for FDA action, including injunction, recall, seizure, or total or partial suspension of production.

 

Reviva intends to rely on third parties to conduct, supervise and monitor its clinical trials, and if those third parties perform in an unsatisfactory manner, it may harm Reviva’s business.

 

Reviva intends to rely on CROs and clinical trial sites to ensure the proper and timely conduct of its clinical trials, and Reviva expects to have limited influence over their actual performance.

 

Reviva intends to rely upon CROs to monitor and manage data for its clinical programs, as well as the execution of future nonclinical studies. Reviva expects to control only certain aspects of its CROs’ activities. Nevertheless, Reviva will be responsible for ensuring that each of its studies is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards and its reliance on the CROs does not relieve Reviva of its regulatory responsibilities.

 

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Reviva and its CROs will be required to comply with the Good Laboratory Practices and GCPs, which are regulations and guidelines enforced by the FDA and are also required by the Competent Authorities of the Member States of the European Economic Area and comparable foreign regulatory authorities in the form of International Conference on Harmonization guidelines for any of its product candidates that are in preclinical and clinical development. The Regulatory authorities enforce GCPs through periodic inspections of trial sponsors, principal investigators and clinical trial sites. If Reviva or its CROs fail to comply with GCPs, the clinical data generated in Reviva’s clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require Reviva to perform additional clinical trials before approving Reviva’s marketing applications. Accordingly, if Reviva’s CROs fail to comply with these regulations or fail to recruit a sufficient number of subjects, Reviva may be required to repeat clinical trials, which would delay the regulatory approval process.

 

Reviva’s CROs will be independent contractors and not its employees, and Reviva will not control whether or not they devote sufficient time and resources to Reviva’s future clinical and nonclinical programs. These CROs may also have relationships with other commercial entities, including Reviva’s competitors, for whom they may also be conducting clinical trials, or other drug development activities which could harm Reviva’s competitive position. Reviva faces the risk of potential unauthorized disclosure or misappropriation of its intellectual property by CROs, which may reduce Reviva’s trade secret protection and allow its potential competitors to access and exploit Reviva’s proprietary technology. If Reviva’s CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to Reviva’s clinical protocols or regulatory requirements or for any other reasons, Reviva’s clinical trials may be extended, delayed or terminated, and Reviva may not be able to obtain regulatory approval for, or successfully commercialize any product candidate that it develops. As a result, Reviva’s financial results and the commercial prospects for any product candidate that it develops would be harmed, Reviva’s costs could increase, and Reviva’s ability to generate revenues could be delayed.

 

If Reviva’s relationship with these CROs terminate, Reviva may not be able to enter into arrangements with alternative CROs or do so on commercially reasonable terms. Switching or adding additional CROs involves substantial cost and requires management time and focus. In addition, there is a natural transition period when a new CRO commences work. As a result, delays occur, which can materially impact Reviva’s ability to meet its desired clinical development timelines. Though Reviva intends to carefully manage its relationships with its CROs, there can be no assurance that Reviva will not encounter challenges or delays in the future or that these delays or challenges will not have an adverse impact on Reviva’s business, financial condition and prospects.

 

Risks Related to Reviva’s Intellectual Property

 

If Reviva is unable to obtain and maintain patent protection for its technology and products or if the scope of the patent protection obtained is not sufficiently broad, Reviva may not be able to compete effectively in its markets.

 

Reviva relies upon a combination of patents, trade secret protection and confidentiality agreements to protect the intellectual property related to its drug development programs and product candidates. Reviva’s success depends in large part on its ability to obtain and maintain patent protection in the United States and other countries with respect to RP5063, RP1208 and any future product candidates. Reviva seeks to protect its proprietary position by filing patent applications in the United States and abroad related to Reviva’s development programs and product candidates. The patent prosecution process is expensive and time-consuming, and Reviva may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.

 

It is also possible that Reviva will fail to identify patentable aspects of its research and development output before it is too late to obtain patent protection. The patent applications that Reviva owns may fail to result in issued patents with claims that cover RP5063, RP1208 or any future product candidate in the United States or in other foreign countries. There is no assurance that all of the potentially relevant prior art relating to Reviva’s patents and patent applications has been found, which can invalidate a patent or prevent a patent from issuing from a pending patent application. Even if patents do successfully issue and even if such patents cover RP5063, RP1208 or any future product candidate, third parties may challenge their validity, enforceability or scope, which may result in such patents being narrowed, invalidated, or held unenforceable. Any successful opposition to these patents or any other patents owned by Reviva could deprive Reviva of rights necessary for the successful commercialization of any product candidates that it may develop. Further, if Reviva encounters delays in regulatory approvals, the period of time during which Reviva could market a product candidate under patent protection could be reduced.

 

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If the patent applications Reviva holds with respect to its development programs and product candidates fail to issue, if their breadth or strength of protection is threatened, or if they fail to provide meaningful exclusivity for RP5063, RP1208 or any future product candidate, it could dissuade companies from collaborating with Reviva to develop product candidates, and threaten Reviva’s ability to commercialize future drugs. Any such outcome could have a material adverse effect on Reviva’s business.

 

The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has in recent years been the subject of much litigation. In addition, the laws of foreign countries may not protect Reviva’s rights to the same extent as the laws of the United States. For example, European patent law restricts the patentability of methods of treatment of the human body more than United States law does. Publications of discoveries in scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, Reviva cannot know with certainty whether it was the first to make the inventions claimed in Reviva’s owned patents or pending patent applications, or that Reviva was the first to file for patent protection of such inventions. As a result, the issuance, scope, validity, enforceability and commercial value of Reviva’s patent rights are highly uncertain. Reviva’s pending and future patent applications may not result in patents being issued which protect its technology or products, in whole or in part, or which effectively prevent others from commercializing competitive technologies and products. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of Reviva’s patents or narrow the scope of Reviva’s patent protection. Moreover, Reviva may be subject to a third party pre-issuance submission of prior art to the U.S. Patent and Trademark Office, or USPTO, or become involved in opposition, derivation, reexamination, inter partes review, post-grant review or interference proceedings challenging Reviva’s patent rights or the patent rights of others. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, Reviva’s patent rights, allow third parties to commercialize its technology or products and compete directly with Reviva, without payment to Reviva, or result in Reviva’s inability to manufacture or commercialize products without infringing third party patent rights. In addition, if the breadth or strength of protection provided by Reviva’s patents and patent applications is threatened, it could dissuade companies from collaborating with Reviva to license, develop or commercialize current or future product candidates.

 

Various extensions may be available; however the life of a patent, and the protection it affords, is limited. Without patent protection for Reviva’s current or future product candidates, Reviva may be open to competition from generic versions of such products. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, Reviva’s owned patent portfolio may not provide it with sufficient rights to exclude others from commercializing products similar or identical to Reviva’s.

 

Obtaining and maintaining Reviva’s patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and Reviva’s patent protection could be reduced or eliminated for non-compliance with these requirements.

 

Periodic maintenance fees on any issued patent are due to be paid to the USPTO and other foreign patent agencies in several stages over the lifetime of the patent. The USPTO and various foreign national or international patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse may in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonment or lapse of patent rights include, but are not limited to, failure to timely file national and regional stage patent applications based on Reviva’s international patent application, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. If Reviva fails to maintain the patents and patent applications covering RP5063, RP1208 or any future product candidate, Reviva’s competitors might be able to enter the market, which would have an adverse effect on Reviva’s business.

 

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Third party claims or litigation alleging infringement of patents or other proprietary rights or seeking to invalidate patents or other proprietary rights, may delay or prevent the development and commercialization of RP5063, RP1208 and any future product candidate.

 

Reviva’s commercial success depends in part on Reviva avoiding infringement and other violations of the patents and proprietary rights of third parties. There is a substantial amount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, derivation and administrative law proceedings, inter party review, and post-grant review before the USPTO, as well as oppositions and similar processes in foreign jurisdictions. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which Reviva and its collaborators are developing product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, and as Reviva gains greater visibility and market exposure, the risk increases that Reviva’s product candidates or other business activities may be subject to claims of infringement of the patent and other proprietary rights of third parties. Third parties may assert that Reviva is infringing their patents or employing their proprietary technology without authorization. Based on Reviva’s general knowledge in this field of technology and based on the patent prosecution of RP5063 conducted in the United States and in foreign countries, Reviva does not believe that there are valid patents which contain granted claims that could be asserted with respect to RP5063, however, Reviva may be incorrect.

 

There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of Reviva’s product candidates.

 

Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that Reviva’s product candidates may infringe. In addition, third parties may obtain patents in the future and claim that use of Reviva’s technologies infringes upon these patents. If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of any of Reviva’s product candidates, any molecules formed during the manufacturing process or any final product itself, the holders of any such patents may be able to block Reviva’s ability to commercialize such product candidate unless it obtained a license under the applicable patents, or until such patents expire. Similarly, if any third-party patent were held by a court of competent jurisdiction to cover aspects of Reviva’s formulations, processes for manufacture or methods of use, including combination therapy, the holders of any such patent may be able to block Reviva’s ability to develop and commercialize the applicable product candidate unless Reviva obtained a license or until such patent expires. In either case, such a license may not be available on commercially reasonable terms or at all. In addition, Reviva may be subject to claims that it is infringing other intellectual property rights, such as trademarks or copyrights, or misappropriating the trade secrets of others, and to the extent that Reviva’s employees, consultants or contractors use intellectual property or proprietary information owned by others in their work for Reviva, disputes may arise as to the rights in related or resulting know-how and inventions.

 

Parties making claims against Reviva may obtain injunctive or other equitable relief, which could effectively block Reviva’s ability to further develop and commercialize one or more of its product candidates. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from Reviva’s business. In the event of a successful infringement or other intellectual property claim against Reviva, Reviva may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign Reviva’s affected products, which may be impossible or require substantial time and monetary expenditure. Reviva cannot predict whether any such license would be available at all or whether it would be available on commercially reasonable terms. Furthermore, even in the absence of litigation, Reviva may need to obtain licenses from third parties to advance its research or allow commercialization of its product candidates, and Reviva has done so from time to time. Reviva may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In that event, Reviva would be unable to further develop and commercialize one or more of its product candidates, which could harm Reviva’s business significantly. Reviva cannot provide any assurances that third-party patents do not exist which might be enforced against Reviva’s future drugs or product candidates, resulting in either an injunction prohibiting its sales, or, with respect to Reviva’s sales, an obligation on Reviva’s part to pay royalties and/or other forms of compensation to third parties.

 

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Reviva may be involved in lawsuits to protect or enforce its patents, the patents of its licensors or Reviva’s other intellectual property rights, which could be expensive, time consuming and unsuccessful.

 

Competitors may infringe or otherwise violate Reviva’s patents or Reviva’s other intellectual property rights. To counter infringement or unauthorized use, Reviva may be required to file legal claims, which can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that one of Reviva’s patents is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that Reviva’s patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of Reviva’s patents at risk of being invalidated or interpreted narrowly and could put Reviva’s patent applications at risk of not issuing. The initiation of a claim against a third party may also cause the third party to bring counter claims against Reviva, such as claims asserting that Reviva’s patents are invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace.

 

Grounds for a patent invalidity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, non-enablement or lack of statutory subject matter. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant material information from the USPTO, or made a materially misleading statement, during prosecution. Third parties may also raise similar validity claims before the USPTO in post-grant proceedings such as ex parte reexaminations, inter partes review, or post-grant review, or oppositions or similar proceedings outside the United States, in parallel with litigation or even outside the context of litigation. The outcome following legal assertions of invalidity and unenforceability is unpredictable. Reviva cannot be certain that there is no invalidating prior art, of which Reviva and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity or unenforceability, Reviva would lose at least part, and perhaps all, of any future patent protection on its current or future product candidates. Such a loss of patent protection could harm Reviva’s business.

 

Reviva may not be able to prevent misappropriation of its intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States. Reviva’s business could be harmed if in litigation the prevailing party does not offer Reviva a license on commercially reasonable terms. Any litigation or other proceedings to enforce Reviva’s intellectual property rights may fail, and even if successful, may result in substantial costs and distract Reviva’s management and other employees.

 

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of Reviva’s confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have an adverse effect on the price of securities that may be issued by Reviva.

 

Reviva may not be able to protect its intellectual property rights throughout the world, which could impair Reviva’s business.

 

Filing, prosecuting and defending patents covering RP5063, RP1208 and any future product candidate throughout the world would be prohibitively expensive. Competitors may use Reviva’s technologies in jurisdictions where Reviva has not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where Reviva may obtain patent protection, but where patent enforcement is not as strong as that in the United States. These products may compete with Reviva’s products in jurisdictions where Revive does not have any issued patents and any future patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing.

 

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Reviva’s reliance on third parties requires Reviva to share its trade secrets, which increases the possibility that a competitor will discover them or that Reviva’s trade secrets will be misappropriated or disclosed.

 

Because Reviva expects to rely on third parties to manufacture RP5063, RP1208 and any future product candidates, and Reviva expects to collaborate with third parties on the development of RP5063, RP1208 and any future product candidates, Reviva must, at times, share trade secrets with them. Reviva also conducts joint research and development programs that may require Reviva to share trade secrets under the terms of its research and development partnerships or similar agreements. Reviva seeks to protect its proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, consulting agreements or other similar agreements with its advisors, employees, third-party contractors and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose Reviva’s confidential information, including Reviva’s trade secrets. Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by Reviva’s competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. Given that Reviva’s proprietary position is based, in part, on Reviva’s know-how and trade secrets, a competitor’s discovery of Reviva’s trade secrets or other unauthorized use or disclosure would impair Reviva’s competitive position and may have an adverse effect on Reviva’s business and results of operations.

 

In addition, these agreements typically restrict the ability of Reviva’s advisors, employees, third-party contractors and consultants to publish data potentially relating to Reviva’s trade secrets, although Reviva’s agreements may contain certain limited publication rights. Despite Reviva’s efforts to protect its trade secrets, Reviva’s competitors may discover its trade secrets, either through breach of Reviva’s agreements with third parties, independent development or publication of information by any of Reviva’s third-party collaborators. A competitor’s discovery of Reviva’s trade secrets would impair Reviva’s competitive position and have an adverse impact on its business.

 

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SHAREHOLDERS MEETING

 

Date, Time and Place of Shareholders Meeting

 

The Shareholders Meeting will be held at 9:00 a.m. Eastern time, on [●], 2020, at the offices of Ellenoff Grossman & Schole LLP, at 1345 Avenue of the Americas, 11th Floor, New York, New York 10105, or at such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the Proposals.

 

Purpose of the Shareholders Meeting

 

At the Shareholders Meeting, Tenzing is asking holders of its ordinary shares:

 

To consider and vote upon the Domestication Proposal. The form of the Interim Charter of the Company to become effective upon the Domestication, is attached to this proxy statement/prospectus as Annex A;

 

To consider and vote upon the Business Combination Proposal. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex D;

 

To consider and vote upon the 2020 Equity Incentive Plan Proposal. A copy of the 2020 Equity Incentive Plan is attached to this proxy statement/prospectus as Annex E;

 

To consider and vote upon each of the Charter Amendment Proposals;

 

 

 

To consider and vote upon the Director Election Proposal;

 

To consider and vote upon the Working Capital Loan Conversion Proposal; and

 

To consider and vote upon the Adjournment Proposal, if it is presented at the Shareholders Meeting.

 

Recommendation of the Tenzing Board with Respect to the Proposals

 

The Tenzing Board has unanimously approved each of the Proposals.

 

The Tenzing Board unanimously recommends that shareholders:

 

Vote “FOR” the Domestication Proposal;

 

Vote “FOR” the Business Combination Proposal;

 

Vote “FOR” the 2020 Equity Incentive Plan Proposal;

 

Vote “FOR” each of the Charter Amendment Proposals;

 

 

 

Vote “FOR” the election of each of the director nominees pursuant to the Director Election Proposal;

 

Vote “FOR” the Working Capital Loan Conversion Proposal; and

 

Vote “FOR” the Adjournment Proposal, if it is presented at the Shareholders Meeting.

 

Record Date; Outstanding Shares; Shareholders Entitled to Vote

 

Tenzing has fixed the close of business on [●], 2020, as the Record Date for determining the Tenzing shareholders entitled to notice of and to attend and vote at the Shareholders Meeting. As of the close of business on such date, there were 5,124,431 ordinary shares outstanding and entitled to vote. Each ordinary share is entitled to one vote per share at the Shareholders Meeting.

 

Pursuant to the Insider Letter Agreement, (i) the 1,581,250 Founder Shares owned by Sponsor (ii) the 343,000 Private Placement Shares owned by the Sponsor and (iii) nay other ordinary shares of Tenzing owned by the Sponsor or Tenzing’s officers and directors will be voted in favor of all of the Proposals.

 

If your shares or warrants are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the Public Warrants you beneficially own are properly counted. If you wish to attend the Shareholders Meeting and vote in person and your shares or warrants are held in “street name,” you must obtain a legal proxy from your broker, bank or nominee. That is the only way Tenzing can be sure that the broker, bank or nominee has not already voted your shares or warrants.

 

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Quorum and Required Vote

 

A quorum of Tenzing shareholders is necessary to hold the Shareholders Meeting. The presence, in person or by proxy, of Tenzing shareholders representing a majority of the ordinary shares issued and outstanding on the Record Date and entitled to vote on the Proposals to be considered at the Shareholders Meeting will constitute a quorum for the Shareholders Meeting.

 

Each of the Domestication Proposal, the Business Combination Proposal, the 2020 Equity Incentive Plan Proposal, the Director Election Proposal and each of the Charter Amendment Proposals is interdependent upon the others and must be approved in order for Tenzing to complete the Business Combination as contemplated by the Merger Agreement. All Proposals will require the affirmative vote of the holders of a majority of the Tenzing Shares that are present and vote at the Shareholders Meeting. If any of the Domestication Proposal, the Business Combination Proposal, the 2020 Equity Incentive Plan Proposal, the Director Election Proposal, or any of the Charter Amendment Proposals fail to receive the required approval, none of the Proposals will be approved and the Business Combination will not be completed.

 

Voting Your Shares

 

Each Tenzing Share that you own in your name entitles you to one vote. If you are a record owner of your shares, there are two ways to vote your Tenzing Shares at the Shareholders Meeting:

 

You Can Vote By Signing and Returning the Enclosed Proxy Card.    If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted as recommended by the Tenzing Board “FOR” the Domestication Proposal, the Business Combination Proposal, the 2020 Equity Incentive Plan Proposal, each of the Charter Amendment Proposals, the Director Election Proposal, the Working Capital Loan Conversion Proposal, and the Adjournment Proposal (if presented). Votes received after a matter has been voted upon at the Shareholders Meeting will not be counted.

 

You Can Attend the Shareholders Meeting and Vote in Person. When you arrive, you will receive a ballot that you may use to cast your vote.

 

If your shares or warrants are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. If you wish to attend the Shareholders Meeting and vote in person and your shares are held in “street name,” you must obtain a legal proxy from your broker, bank or nominee. That is the only way Tenzing can be sure that the broker, bank or nominee has not already voted your shares or warrants.

 

Abstentions and Broker Non-Votes

 

Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, are not treated as votes cast.

 

Ownership of and Voting by Tenzing’s Sponsor, Directors and Officers

 

The Sponsor, current directors and officers of Tenzing own an aggregate of 1,924,250 ordinary shares of Tenzing, and they have agreed to vote those shares in favor of each of the Proposals at the Shareholders Meeting.

 

Revoking Your Proxy; Changing Your Vote

 

If you are a record owner of your shares and you give a proxy, you may change or revoke it at any time before it is exercised by doing any one of the following:

 

you may send another proxy card with a later date;

 

you may notify Tenzing’s secretary in writing before the Shareholders Meeting that you have revoked your proxy; or

 

You may attend the Shareholders Meeting, revoke your proxy and vote in person as described above.

 

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If your shares are held in “street name” or are in a margin or similar account, you should contact your broker for information on how to change or revoke your voting instructions.

 

Redemption Rights 

 

Public Shareholders may seek to have their shares redeemed by Tenzing, regardless of whether they vote for or against the Business Combination or any other Proposals and whether they held Tenzing ordinary shares as of the Record Date or acquired them after the Record Date. Any Public Shareholder who holds ordinary shares of Tenzing on or before [●], 2020 (two (2) business days before the Shareholders Meeting) will have the right to demand that his or her shares be redeemed for a full pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid. For illustrative purposes, based on funds in the Trust Account of approximately $34.4 million on September 29, 2020 and including anticipated additional interest through the closing of the Business Combination (assuming interest accrues at recent rates and no additional tax payments are made out of the Trust Account), the estimated per share redemption price is expected to be approximately $10.81 A Public Shareholder that has properly tendered his or her shares for Redemption will be entitled to receive his or her pro rata portion of the aggregate amount then on deposit in the Trust Account in cash for such shares only if the Business Combination is completed. If the Business Combination is not completed, the Redemptions will be canceled and the tendered shares will be returned to the relevant Public Shareholders as appropriate.

 

Tenzing shareholders who seek to redeem their Public Shares must demand Redemption no later than 5:00 p.m., Eastern time on [●], 2020 (two (2) business days before the Shareholders Meeting) by (A) submitting a written request to the Transfer Agent that Tenzing redeem such holder’s Public Shares for cash; (B) affirmatively certifying in such request to the Transfer Agent for Redemption if such holder is acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) with any other shareholder with respect to ordinary shares of Tenzing and (C) delivering their ordinary shares, either physically or electronically using The Depository Trust Company’s DWAC System, at the holder’s option, to the Transfer Agent prior to the Shareholders Meeting. If you hold the shares in street name, you will have to coordinate with your broker to have your shares certificated or delivered electronically. Certificates that have not been tendered to the Transfer Agent (either physically or electronically) in accordance with these procedures will not be redeemed for cash. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC system. The Transfer Agent will typically charge the tendering broker a nominal fee and it would be up to the broker whether or not to pass this cost on to the redeeming shareholder. In the event the Business Combination is not completed, this may result in an additional cost to shareholders for the return of their shares.

 

Any demand to redeem such shares once made may be withdrawn at any time up to the vote on the Business Combination. Furthermore, if a Public Shareholder demands Redemption of such shares and subsequently decides prior to the applicable date not to elect to exercise such rights, he or she may simply request that the Transfer Agent return the shares (physically or electronically).

 

A Public Shareholder will be entitled to receive cash for these shares only if the shareholder properly demands Redemption as described above and the Business Combination is completed. If a Public Shareholder properly seeks Redemption and the Business Combination is completed, Tenzing will redeem these shares for cash and the holder will no longer own these shares following the Business Combination. If the Business Combination is not completed for any reason, then the Public Shareholders who exercised their Redemption Rights will not be entitled to receive cash for their shares. In such case, Tenzing will promptly return any shares delivered by the Public Shareholders. Tenzing and Reviva will not complete the Business Combination if, immediately prior to the Closing and after payment of all transaction and other expenses payable by Tenzing and payments for Redemptions (but without regard to any assets or liabilities of Reviva), Tenzing does not have net tangible assets of at least $5,000,001. For more information, see the section entitled “The Business Combination Proposal — The Merger Agreement — Closing Conditions.

 

 

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The closing price of Tenzing ordinary shares on September 24, 2020 was $10.80. The cash held in the Trust Account as of September 24, 2020 was approximately $10.81 per Public Share. Prior to exercising Redemption Rights, shareholders should verify the market price of Tenzing Shares as they may receive higher proceeds from the sale of their shares in the public market than from exercising their Redemption Rights if the market price per share is higher than the Redemption price. Tenzing cannot assure its shareholders that they will be able to sell their Tenzing Shares in the open market, even if the market price per share is higher than the Redemption price stated above, as there may not be sufficient liquidity in its securities when its shareholders wish to sell their shares. A Public Shareholder who properly exercises its Redemption Rights pursuant to the procedures set forth herein will be entitled to receive a full pro rata portion of the aggregate amount then on deposit in the Trust Account, less any amounts necessary to pay Tenzing’s taxes.

 

Notwithstanding the foregoing, a Public Shareholder, together with any affiliate of his, her, its or any other person with whom he, she or it is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking Redemption Rights with respect to 20% or more of Tenzing’s Public Shares. Accordingly, any shares held by a Public Shareholder or “group” in excess of such 20% cap will not be redeemed by Tenzing.

 

Pursuant to the Insider Letter Agreement, the Sponsor, officers or directors have waived all of their Redemption Rights and will not have Redemption Rights with respect to any Tenzing Shares owned by them, directly or indirectly.

 

Appraisal Rights

 

Tenzing’s shareholders do not have appraisal rights under the Companies Act or otherwise in connection with the Business Combination Proposal or the other Proposals.

 

If the Business Combination is completed, Reviva stockholders who do not deliver a written consent approving the Business Combination are entitled to appraisal rights under Section 262 of the DGCL (“Section 262”) provided that they comply with the conditions established by Section 262.

 

This statement does not constitute the formal notice to the Reviva stockholders of the availability of appraisal rights in connection with the Business Combination. Rather, such formal notice will be given after the Merger Agreement has been adopted by the requisite vote of the Reviva stockholders.

 

The following is intended as a brief summary of the material provisions of the statutory procedures required to be followed properly and in a timely manner by a Reviva stockholder in order to exercise and perfect appraisal rights. This summary, however, is not a complete statement of all applicable requirements and is qualified in its entirety by reference to Section 262, the full text of which is attached hereto as Annex F. All references in Section 262 and in this summary to a “stockholder” or “holders of shares” are to the record holder of shares of Reviva capital stock immediately prior to the effective time of the Business Combination as to which appraisal rights are asserted, unless otherwise indicated.

 

Under Section 262, where a merger agreement relating to a proposed merger is adopted by stockholders acting by written consent in lieu of a meeting of the stockholders, either the constituent corporation before the effective date of the merger or the surviving corporation, within 10 days after the effective date of the merger, must notify each of its stockholders entitled to appraisal rights that the merger has been approved and that appraisal rights are available, and must include in each such notice a copy of Section 262. As noted above, this statement does not constitute the formal notice to the Reviva stockholders of the availability of appraisal rights in connection with the Business Combination. Rather, such formal notice will be given after the Merger Agreement has been adopted by the requisite vote of the Reviva stockholders.

 

If the Business Combination is completed, within 10 days after the Closing of the Business Combination, the Company will notify its stockholders that the Business Combination has been approved, the Closing Date of the Business Combination and that appraisal rights are available to any stockholder who has not approved the Business Combination by written consent. Holders of shares of Reviva capital stock who desire to exercise their appraisal rights must deliver a written demand for appraisal to the Company within 20 days after the date of mailing of that notice, and that stockholder must not have delivered a written consent approving the Business Combination.

 

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Pursuant to Section 262, Reviva stockholders who (a) are holders of record of shares of capital stock of Reviva on the date of making a demand for appraisal of their shares, (b) continuously hold the shares through the effective time of the Business Combination, (c) do not vote in favor of the Business Combination nor consent thereto in writing, (d) comply with the other requirements of Section 262 and (e) have not waived their appraisal rights, will be entitled to have their shares of Reviva capital stock appraised by the Delaware Court of Chancery and to receive payment of the “fair value” of such shares, exclusive of any element of value arising from the accomplishment or expectation of the Business Combination, together with interest, if any, as determined by the court.

 

Holders of shares of Reviva capital stock who desire to exercise their appraisal rights must deliver a written demand for appraisal of their shares of Reviva within 20 days after the date of mailing of the formal notice of appraisal rights in connection with the Business Combination. A demand for appraisal will be sufficient if it reasonably informs the Company of the identity of the stockholder and that such stockholder intends thereby to demand appraisal of such stockholder’s shares. All written demands for appraisal should be addressed to the Company at 19925 Stevens Creek Blvd., Suite 100, Cupertino, CA 95014. Failure to deliver a written consent approving the Business Combination will not in and of itself constitute a written demand for appraisal satisfying the requirements of Section 262.

 

If a Reviva stockholder fails to deliver a written demand for appraisal within the time period specified above, such stockholder will be entitled to receive the Merger Consideration for his, her or its shares of Reviva capital stock as provided for in the Merger Agreement, but such stockholder will have no appraisal rights with respect to his, her or its shares of Reviva capital stock.

 

To be effective, a demand for appraisal by a Reviva stockholder must be made by, or in the name of, such Reviva stockholder and must reasonably inform the Company of the identity of the stockholder of record and that such stockholder intends thereby to demand appraisal of his, her or its shares. A demand for appraisal should be executed by or on behalf of the holder of record, fully and correctly, as such holder’s name appears in Reviva’s records. Beneficial owners who do not also hold the shares of Reviva capital stock of record may not directly make appraisal demands to the Company. The beneficial holder must, in such cases, have the registered owner, such as a brokerage firm, bank, trust or other nominee, submit the required demand in respect of those shares. If shares of Reviva capital stock are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of a demand for appraisal should be made by or for the fiduciary, and if the shares of Reviva capital stock are owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand should be executed by or for all joint owners. An authorized agent, including an authorized agent for two or more joint owners, may execute the demand for appraisal for a stockholder of record, provided that the agent must identify the record owner or owners, and expressly disclose the fact that, in executing the demand, he or she is acting as agent for the record owner. A record owner, such as a broker, who holds shares of Reviva capital stock as a nominee for others, may exercise his or her right of appraisal with respect to the shares of Reviva capital stock held for one or more beneficial owners, while not exercising this right for other beneficial owners. In that case, the written demand should state the number of shares of Reviva capital stock as to which appraisal is sought. Where no number of shares is expressly stated, the demand will be presumed to cover all shares held in the name of the record owner.

 

Within 120 days after the effective time of the Business Combination, any Reviva stockholder who has complied with the requirements for exercising appraisal rights will, upon written request to the Company, be entitled to receive a written statement setting forth the aggregate number of shares not voted in favor of the adoption of the Merger Agreement and with respect to which demands for appraisal have been received, and the aggregate number of holders of such shares. A person who is the beneficial owner of shares of Reviva capital stock held in a voting trust or by a nominee on behalf of such person may, in such person’s own name, request from the Company the statement described in the previous sentence. Such written statement will be mailed to the requesting Reviva stockholder within 10 days after such written request is received by the Company or within 10 days after expiration of the period for delivery of demands for appraisal, whichever is later.

 

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Within 120 days after the effective time of the Business Combination, but not thereafter, either the Company or any Reviva stockholder who has complied with the requirements of Section 262, and who is otherwise entitled to appraisal rights, may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares of Reviva capital stock held by all such stockholders. A person who is the beneficial owner of shares of Reviva capital stock held in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file the petition described in the previous sentence. Upon the filing of the petition by a Reviva stockholder, service of a copy of such petition must be made upon the Company, as the surviving corporation. If no such petition is filed, appraisal rights will be lost for all stockholders who had previously demanded appraisal of their shares. The Company has no obligation to file such a petition if a Reviva stockholder demands appraisal. Accordingly, the failure of a Reviva stockholder to file such a petition within the period specified could nullify the Reviva stockholder’s previously written demand for appraisal. There is no present intent on the part of Reviva to file an appraisal petition, and Reviva stockholders seeking to exercise appraisal rights should not assume that Reviva will file such a petition or that Reviva will initiate any negotiations with respect to the fair value of such shares. Accordingly, Reviva stockholders who desire to have their shares appraised should initiate any petitions necessary for the perfection of their appraisal rights within the time periods and in the manner prescribed in Section 262.

 

If a petition for appraisal is timely filed by a Reviva stockholder and a copy of the petition is delivered to the Company, the Company will then be obligated, within 20 days after receiving service of a copy of the petition, to file with the Delaware Register in Chancery a duly verified list containing the names and addresses of all Reviva stockholders who have demanded an appraisal of their shares, and with whom agreements as to the value of their shares have not been reached by the Company. After notice is made to such Reviva stockholders as required by the Delaware Court of Chancery, the Delaware Court of Chancery is empowered to conduct a hearing upon the petition to determine those Reviva stockholders who have complied with Section 262 and who have become entitled to the appraisal rights thereunder. Under Delaware law, the Delaware Court of Chancery may require stockholders who have demanded appraisal of their shares and who hold stock represented by certificates to submit their stock certificates to the Delaware Register in Chancery for notation thereon of the pendency of the appraisal proceedings, and if any such stockholder who holds stock represented by certificates fails to comply with that direction, the Delaware Court of Chancery may dismiss the proceedings as to that stockholder. Upon application by the Company or by any Reviva stockholder entitled to participate in the appraisal proceeding, the Delaware Court of Chancery may, in its discretion, proceed to trial upon the appraisal prior to the final determination of the Reviva stockholders entitled to an appraisal. Any stockholder whose name appears on the verified list filed by the Company and who has submitted such stockholder’s certificates of stock to the Register in Chancery, if required, may participate fully in all proceedings until it is finally determined that such stockholder is not entitled to appraisal rights under Section 262. After the Delaware Court of Chancery determines which Reviva stockholders are entitled to appraisal of their shares of Reviva capital stock, the appraisal proceeding will be conducted in accordance with the rules of the Delaware Court of Chancery, including any rules specifically governing appraisal proceedings. Through such proceeding, the Delaware Court of Chancery will appraise the shares of Reviva capital stock, determining the fair value of the shares exclusive of any element of value arising from the accomplishment or expectation of the Business Combination, together with interest, if any, to be paid upon the amount determined to be the fair value. Stockholders considering seeking appraisal should be aware that the fair value of their shares of Reviva capital stock as determined under Section 262 of the DGCL could be more than, the same as or less than the consideration such stockholders would receive pursuant to the Merger Agreement if they did not seek appraisal of their shares of Reviva capital stock.

 

In Weinberger v. UOP, Inc., the Delaware Supreme Court stated that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered in appraisal proceedings and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court has stated that in making this determination of fair value, the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts which could be ascertained as of the date of the merger which throw any light on future prospects of the merged corporation. Section 262 provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger.” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Delaware Supreme Court also stated that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.”

 

Unless the Delaware Court of Chancery in its discretion determines otherwise for good cause shown, interest from the effective date of the Business Combination through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during such period between the effective date of the Business Combination and the date of payment of the judgment; provided, however that at any time before the entry of judgment in the proceedings, the Company may pay to each Reviva stockholder entitled to appraisal an amount in cash, in which case interest will accrue thereafter only upon the sum of (1) the difference, if any, between the amount so paid and the fair value of the shares as determined by the Delaware Court of Chancery, and (2) interest theretofore accrued, unless paid at that time. The Company is under no obligation to make such voluntary cash payment prior to such entry of judgment.

 

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Costs of the appraisal proceeding (which do not include attorneys’ fees or the fees and expenses of experts) may be imposed upon the Company and Reviva stockholders participating in the appraisal proceeding by the Delaware Court of Chancery as the Court deems equitable in the circumstances. Upon the application of a Reviva stockholder, the Delaware Court of Chancery may order all or a portion of the expenses incurred by any Reviva stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts, to be charged pro rata against the value of all shares entitled to appraisal.

 

Any Reviva stockholder who had demanded appraisal rights will not, after the effective time of the Business Combination, be entitled to vote shares subject to that demand for any purpose, or to receive payments of dividends or any other distribution with respect to those shares, other than with respect to payment as of a record date prior to the effective time of the Business Combination. If any stockholder who demands appraisal of shares of Reviva capital stock under Section 262 fails to perfect, effectively withdraws or otherwise loses such holder’s right to appraisal with respect to such shares, such shares will be deemed to have been converted at the effective time of the Business Combination into the right to receive the consideration provided pursuant to the Merger Agreement, without interest, upon the terms and conditions set forth therein.

 

If no petition for appraisal is filed within 120 days after the effective time of the Business Combination, or if a Reviva stockholder consents in writing to the adoption of the Merger Agreement or effectively withdraws his, her or its demand for appraisal, then the right of that Reviva stockholder to appraisal will cease and that Reviva stockholder will be entitled to receive the consideration for shares of his, her or its shares of Reviva capital stock pursuant to the Merger Agreement. A holder, who has not commenced and appraisal proceeding or joined that proceeding as a named party, may withdraw his or her demand for appraisal by delivering to the Company a written withdrawal of his or her demand for appraisal and acceptance of the Business Combination, except that any such attempt to withdraw made more than 60 days after the effective date of the Business Combination will require the written approval of the Company. No appraisal proceeding in the Delaware Court of Chancery will be dismissed as to any stockholder without the approval of the Delaware Court of Chancery, and such approval may be conditioned upon such terms as the Delaware Court of Chancery deems just, provided, however, any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party will have the right to withdraw such stockholder’s demand for appraisal and to accept the terms offered upon the Business Combination within 60 days after the effective date of the Business Combination.

 

The preceding discussion is not a complete statement of the law pertaining to appraisal rights under Section 262 and is qualified in its entirety by reference to Section 262 of the DGCL, the full text of which is attached hereto as Annex D.

 

ALL REVIVA STOCKHOLDERS THAT DO NOT WISH TO CONSENT TO THE ADOPTION OF THE MERGER AGREEMENT AND THE APPROVAL OF THE BUSINESS COMBINATION, AND WISH TO EXERCISE APPRAISAL RIGHTS PURSUANT TO THE DGCL OR THAT WISH TO PRESERVE THEIR RIGHT TO DO SO SHOULD CAREFULLY REVIEW ANNEX F, SINCE FAILURE TO COMPLY WITH THE PROCEDURES SET FORTH THEREIN WILL RESULT IN THE LOSS OF SUCH RIGHTS.

 

REVIVA STOCKHOLDERS CONSIDERING SEEKING APPRAISAL SHOULD BE AWARE THAT THE FAIR VALUE OF THEIR SHARES AS DETERMINED UNDER SECTION 262 COULD BE MORE THAN, THE SAME AS OR LESS THAN THE MERGER CONSIDERATION THEY WOULD RECEIVE PURSUANT TO THE MERGER AGREEMENT IF THEY DID NOT SEEK APPRAISAL OF THEIR SHARES. REVIVA STOCKHOLDERS WHO PERFECT THEIR APPRAISAL RIGHTS AND WHO DO NOT SUBSEQUENTLY EFFECTIVELY WITHDRAW OR OTHERWISE LOSE THEIR APPRAISAL RIGHTS WILL BE ENTITLED TO NO CONSIDERATION UNDER THE MERGER AGREEMENT.

 

FAILURE TO COMPLY STRICTLY WITH ALL OF THE PROCEDURES SET FORTH IN SECTION 262 WILL RESULT IN THE LOSS OF A REVIVA STOCKHOLDER’S STATUTORY APPRAISAL RIGHTS THEREUNDER. CONSEQUENTLY, ANY REVIVA STOCKHOLDER WISHING TO EXERCISE APPRAISAL RIGHTS IS URGED TO CONSULT LEGAL COUNSEL.

 

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Proxy Solicitation

 

Tenzing is soliciting proxies on behalf of the Tenzing Board. This solicitation is being made by mail but also may be made by telephone or in person. Tenzing and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means. Tenzing will bear all of the costs of the solicitation, which Tenzing estimates will be approximately $8,250 in the aggregate. Tenzing has engaged Advantage Proxy, Inc. as proxy solicitor to assist in the solicitation of proxies.

 

Tenzing will ask banks, brokers and other institutions, nominees and fiduciaries to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. Tenzing will reimburse them for their reasonable expenses.

 

If a shareholder grants a proxy, it may still vote its shares in person if it revokes its proxy before the Shareholders Meeting. A shareholder may also change its vote by submitting a later-dated proxy as described in the section entitled “— Revoking Your Proxy.”

 

Householding

 

The SEC has adopted a rule concerning the delivery of annual reports and proxy statements. It permits Tenzing, with your permission, to send a single notice of meeting and, to the extent requested, a single copy of this proxy statement/prospectus to any household at which two or more Tenzing shareholders reside if they appear to be members of the same family. This rule is called “householding,” and its purpose is to help reduce printing and mailing costs of proxy materials.

 

A number of brokerage firms have instituted householding for shares held in “street name.” If you and members of your household have multiple accounts holding ordinary shares of Tenzing, you may have received a householding notification from your broker. Please contact your broker directly if you have questions, require additional copies of this proxy statement/prospectus or wish to revoke your decision to household. These options are available to you at any time.

 

Who Can Answer Your Questions About Voting Your Shares and Public Warrants?

 

If you are a holder of Tenzing’s ordinary shares and have any questions about how to vote or direct a vote in respect of your securities, you may call Advantage Proxy, Inc., Tenzing’s proxy solicitor, at (877) 870-8565 (toll free); or email at ksmith@advantageproxy.com.

 

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PROPOSAL 1: THE DOMESTICATION PROPOSAL

 

Summary of the Proposal

 

General

 

Tenzing is proposing to change its domicile by continuing out of the British Virgin Islands, as a business company incorporated under the laws of the British Virgin Islands into the State of Delaware to become a corporation incorporated under the laws of the State of Delaware. This change will be implemented as a legal continuation of Tenzing under the applicable laws of British Virgin Islands and the State of Delaware as described under “— Manner of Effecting the Domestication and the Legal Effect of the Domestication.”

 

The Domestication will be effected by the filing of a notice of continuation out of the British Virgin Islands with the British Virgin Islands Registrar of Corporate Affairs and the filing of a Certificate of Corporate Domestication and the Certificate of Incorporation with the Delaware Secretary of State. In connection with the Domestication, all outstanding securities of Tenzing will convert to outstanding securities of the continuing Delaware corporation. In connection with the Domestication, Tenzing will adopt the Interim Charter which will replace or remove certain provisions of Tenzing’s Current Charter which are no longer valid or otherwise applicable as a result of the Domestication (but without substantively changing such ongoing rights) and file the same with the Secretary of State of the State of Delaware. The following table sets forth a summary of the principal changes proposed to be made between Tenzing’s Current Charter and the Interim Charter. The summary is qualified by reference to the complete text of the Interim Charter, a copy of which is attached to this proxy statement/prospectus as Annex A. All shareholders are encouraged to read the Interim Charter in its entirety for a more complete description of its terms.

 

    Current Charter     Interim Charter
         
Provisions Specific to a British Virgin Islands Company    

Section 8.2: Upon the written request of the Members entitled to exercise 30 percent or more of the voting rights in respect of the matter for which the meeting is requested the Directors shall convene a meeting of Members.   Section 8.3: The Director convening a meeting of Members shall give not less than 10 nor more than 60 days’ written notice of such meeting to:   (a) those Members whose names on the date the notice is given appear as Members in the share register of Tenzing and are entitled to vote at the meeting; and   (b) the other Directors   Section 10.6 Subject to Regulation 23.7, the Directors may by Resolution of Directors exercise all the powers of Tenzing to incur indebtedness, liabilities or obligations and to secure indebtedness, liabilities or obligations whether of Tenzing or of any third party, provided always that if the same occurs prior to the consummation of a Business Combination, Tenzing must first obtain from the lender a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account.    

  Not applicable.

 

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Capitalization  

Section 5.1: There is one class of ordinary shares with no par value and then there are five classes of preferred stock with no par value.

 

Section 8: Rights not varied by the issue of pari passu: The rights conferred upon the holders of the Shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be deemed to be varied by the creation or issue of further Shares ranking pari passu therewith.

 

•  There is common stock with a par value of $0.0001 per share and preferred stock with a par value of $0.0001 per share.

 

•  Rights and options: Tenzing has the authority to create and issue rights, warrants and options or convertible securities entitling the holders thereof to subscribe for, purchase or receive shares of any class or series of Tenzing’s capital stock or other securities of the Corporation, and such rights, warrants and options shall be evidenced by instrument(s) approved by the Board. The Board is hereby expressly authorized to set the exercise price, duration, times for exercise and other terms and conditions of such rights, warrants or options; provided, however, that the consideration to be received for any shares of capital stock subject thereto may not be less than the par value thereof.

         
Provisions Specific to a Delaware Corporation   Not applicable         Section 7.01 Meetings. Subject to the rights of the holders of any outstanding series of the Preferred Stock, and to the requirements of applicable law, special meetings of shareholders of the Corporation may be called only by the chairman of the Board, chief executive officer or president of the Corporation, or the Board pursuant to a resolution adopted by a majority of the Board, and the shareholders shall have no right to call a special meeting.

 

       

 •  Section 7.02 Advance Notice. Advance notice of shareholder nominations for the election of directors and of business to be brought by shareholders before any meeting of the shareholders of the Corporation shall be given in the manner provided in the Bylaws.

 

•  Section 7.03 Action by Written Consent. Any action required or permitted to be taken by the stockholders of the Corporation may be effected by written consent of the stockholders holding the requisite number of shares required to approve such action.

 

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You should note that not only will the Interim Charter preserve the existing rights of Tenzing ordinary shares, but also that the existing provisions of the Current Charter (including Regulation 23 of the Current Charter and those other provisions which cannot be amended prior to the Closing or made subject to certain restrictions or amendment) will be replicated or substantively replicated in the Interim Charter. At the effective time of the Domestication under the applicable laws, Tenzing will cease to be a business company incorporated under the laws of the British Virgin Islands and will become and continue as a Delaware corporation. On such continuation, the Current Charter will be replaced by the Interim Charter and your rights as a shareholder will cease to be governed by the laws of the British Virgin Islands and you will become a stockholder of Tenzing with all rights as such governed by Delaware law.

 

Reasons for the Domestication

 

The Tenzing Board believes that it would be in the best interests of Tenzing, immediately prior to the completion of the Business Combination, to effect the Domestication. The primary reason for the Domestication is to enable Tenzing to avoid certain taxes that would be imposed on Tenzing if Tenzing were to conduct an operating business in the United States as a foreign corporation following the Business Combination.

 

In addition, because Tenzing will operate within the United States following the Business Combination, it was the view of the Tenzing Board that Tenzing should also be structured as a corporation organized in the United States. In addition, the Tenzing Board believes Delaware provides a recognized body of corporate law that will facilitate corporate governance by Tenzing’s officers and directors. Delaware maintains a favorable legal and regulatory environment in which to operate. For many years, Delaware has followed a policy of encouraging companies to incorporate there and, in furtherance of that policy, has adopted comprehensive, modern and flexible corporate laws that are regularly updated and revised to meet changing business needs. As a result, many corporations have initially chosen Delaware as their domicile or have subsequently reincorporated in Delaware in a manner similar to the procedures Tenzing is proposing. Due to Delaware’s longstanding policy of encouraging incorporation in that state and consequently its popularity as the state of incorporation, the Delaware courts have developed a considerable expertise in dealing with corporate issues and a substantial body of case law has developed construing the DGCL and establishing public policies with respect to Delaware corporations. It is anticipated that the DGCL will continue to be interpreted and explained in a number of significant court decisions that may provide greater predictability with respect to Tenzing’s corporate legal affairs.

 

Regulatory Approvals; Third Party Consents

 

Tenzing is not required to make any filings or to obtain any approvals or clearances from any antitrust regulatory authorities in the United States or other countries in order to complete the Domestication; however, because the Domestication must occur simultaneously with the Merger, it will not occur unless the Merger can be completed, which will require the approvals as described below under the section entitled “Proposal 2: The Business Combination Proposal.” Tenzing must comply with applicable United States federal and state securities laws in connection with the Domestication, including the filing with Nasdaq of a press release disclosing the Domestication, among other things.

 

The Domestication will not breach any covenants or agreements binding upon Tenzing and will not be subject to any additional federal or state regulatory requirements, except compliance with the laws of the British Virgin Islands and Delaware necessary to effect the Domestication.

 

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Certificate of Incorporation

 

Commencing with the effective time of the Domestication under the applicable law, the Interim Charter will govern the rights of stockholders in Tenzing.

 

Material U.S. Federal Income Tax Consequences of the Domestication to Tenzing Shareholders

 

The following discussion sets forth the material U.S. federal income tax consequences of the Domestication to the U.S. Holders (as defined below) of Tenzing Shares. The following discussion also summarizes (i) the tax consequences to U.S. Holders and Non-U.S. Holders (as defined below) of Tenzing Shares that elect to have their Tenzing Shares redeemed for cash if the Business Combination is completed and (ii) the tax consequences for Non-U.S. Holders of owning and disposing of the Domestication. The following discussion is the opinion of Ellenoff Grossman & Schole LLP. The information set forth in this section is based on the Code, its legislative history, final, temporary and proposed treasury regulations promulgated thereunder (“Treasury Regulations”), published rulings and court decisions, all as currently in effect. These authorities are subject to change or differing interpretations, possibly on a retroactive basis.

 

For purposes of this summary, a “U.S. Holder” means a beneficial owner of Tenzing Shares that is for U.S. federal income tax purposes:

 

•      an individual citizen or resident of the United States;

 

•      a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or organized) in or under the laws of the United States, any state thereof or the District of Columbia;

 

•      an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source; or

 

•      a trust if (i) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized to control all substantial decisions of the trust, or (ii) it has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.

 

A “Non-U.S. Holder” means a beneficial owner of Tenzing Shares that, for U.S. federal income tax purposes, is not a U.S. Holder or a partnership or other entity classified as a partnership for U.S. federal income tax purposes.

 

This discussion does not address all aspects of U.S. federal income taxation that may be relevant to any particular holder based on such holder’s individual circumstances. In particular, this discussion considers only holders that hold Tenzing Shares as capital assets within the meaning of Section 1221 of the Code. This discussion does not address the alternative minimum tax, the Medicare tax on net investment income, or the U.S. federal income tax consequences to holders that are subject to special rules, including:

 

•      financial institutions or financial services entities;

 

•      broker-dealers;

 

•      persons that are subject to the mark-to-market accounting rules under Section 475 of the Code;

 

•      tax-exempt entities;

 

•      governments or agencies or instrumentalities thereof;

 

•      insurance companies;

 

•      regulated investment companies;

 

•      real estate investment trusts;

 

•      certain expatriates or former long-term residents of the United States;

 

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•      persons that acquired Tenzing Shares pursuant to an exercise of employee options, in connection with employee incentive plans or otherwise as compensation;

 

•      persons that hold Tenzing Shares as part of a straddle, constructive sale, hedging, redemption or other integrated transaction;

 

•      persons whose functional currency is not the U.S. dollar;

 

•      controlled foreign corporations;

 

•      passive foreign investment companies;

 

•       partnerships (or other entities classified as partnership for U.S. federal income tax purposes) or partners in such partnerships;

 

•      persons required to accelerate the recognition of any item of gross income with respect to Tenzing Shares as a result of such income being recognized on an applicable financial statement;

 

•      persons who actually or constructively own 5 percent or more of Tenzing Shares by vote or value (except as specifically provided below); or

 

•      the Sponsor or its affiliates.

 

This discussion does not address any tax laws other than the U.S. federal income tax law, such as gift or estate tax laws, state, local or non-U.S. tax laws or, except as discussed herein, any tax reporting obligations of a holder of Tenzing Shares. Additionally, this discussion does not address the tax treatment of partnerships or other pass-through entities or persons who hold Tenzing Shares through such entities. If a partnership (or other entity classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of Tenzing Shares, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities of the partnership. This discussion also assumes that any distribution made (or deemed made) on Tenzing Shares and any consideration received (or deemed received) by a holder in consideration for the sale or other disposition of Tenzing Shares is made in U.S. dollars. Additionally, this discussion does not address the tax treatment of the Public Warrants in the Domestication. Holders of Public Warrants should consult with their own tax advisors regarding the particular tax consequences to them of holding, exercising or disposing of the Public Warrants.

 

THE U.S. FEDERAL INCOME TAX TREATMENT OF THE BENEFICIAL OWNERS OF TENZING SHARES MAY BE AFFECTED BY MATTERS NOT DISCUSSED HEREIN AND DEPENDS IN SOME INSTANCES ON DETERMINATIONS OF FACT AND INTERPRETATIONS OF COMPLEX PROVISIONS OF U.S. FEDERAL INCOME TAX LAW FOR WHICH NO CLEAR PRECEDENT OR AUTHORITY MAY BE AVAILABLE. WE URGE BENEFICIAL OWNERS OF TENZING SHARES WHO CHOOSE TO EXERCISE THEIR CONVERSION RIGHTS OR WHO CHOOSE TO PARTICIPATE IN THE DOMESTICATION TO CONSULT THEIR TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO SUCH HOLDER OF THE DOMESTICATION AND OWNING AND DISPOSING OF COMPANY COMMON STOCK AS A RESULT OF ITS PARTICULAR CIRCUMSTANCES, INCLUDING THE U.S. FEDERAL, STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES THEREOF.

 

U.S. Holders

 

Tax Consequences of the Domestication to U.S. Holders of Tenzing Shares

 

The Domestication 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 bearing directly on how the provisions of Section 368(a) of the Code apply in the case of a statutory conversion of a corporation with no active business and only investment-type assets such as Tenzing, this result is not entirely free from doubt. Accordingly, due to the absence of such guidance, it is not possible to predict whether the IRS or a court considering the issue would take a contrary position.

 

If the Domestication qualifies as a reorganization within the meaning of Section 368(a), except as otherwise provided below in the section entitled “— PFIC Considerations,” and “—Effects of Section 367 to U.S. Holders of Tenzing Shares,” a U.S. Holder of Tenzing Shares would not recognize gain or loss upon the exchange of its Tenzing Shares solely for Company Common Stock pursuant to the Domestication. A U.S. Holder’s aggregate tax basis in the common stock of Tenzing received in connection with the Domestication will generally be the same as its aggregate tax basis in the Tenzing Shares surrendered in the transaction. In addition, the holding period of Tenzing Common Stock received in the Domestication generally should include the holding period of Tenzing Shares surrendered in the Domestication.

 

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If the Domestication should fail to qualify as a reorganization under Section 368(a), a U.S. Holder of Tenzing Shares generally would recognize gain or loss with respect to its Tenzing Shares in an amount equal to the difference, if any, between the fair market value of the corresponding Company Common Stock received in the Domestication and the U.S. Holder’s adjusted tax basis in its Tenzing Shares surrendered. The U.S. Holder’s basis in Tenzing Common Stock would be equal to the fair market value of that stock on the date of the Domestication and such U.S. Holder’s holding period for Tenzing Common Stock would begin on the day following the date of the Domestication.

 

PFIC Considerations

 

Even if the Domestication qualifies as a reorganization within the meaning of Section 368(a) of the Code, the Domestication may still be a taxable event to U.S. Holders of Tenzing Shares under the PFIC provisions of the Code, to the extent that Section 1291(f) of the Code applies, as described below.

 

Effect of PFIC Rules on the Domestication

 

Even if the Domestication qualifies as a reorganization for U.S. federal income tax purposes under Section 368(a) of the Code, Section 1291(f) of the Code requires that, to the extent provided in regulations, a U.S. person that disposes of stock of a PFIC must recognize gain notwithstanding any other provision of the Code. No final Treasury regulations are in effect under Section 1291(f). Proposed Treasury Regulations under Section 1291(f) were promulgated in 1992, with a retroactive effective date once they become finalized. If finalized in their present form, those regulations would require taxable gain recognition by a U.S. Holder with respect to its exchange of Tenzing Shares for Company Common Stock in the Domestication if Tenzing were classified as a PFIC at any time during such U.S. Holder’s holding period in the Tenzing Shares. Any such gain would be treated as an “excess distribution” made in the year of the Domestication and subject to the special tax and interest charge rules discussed below under “Definition and General Taxation of a PFIC.” The proposed Treasury Regulations under Section 1291(f) should not apply to an Electing Shareholder (as defined below) with respect to its Tenzing Shares for which a timely QEF election, QEF election with a purging election, or MTM election is made, as each such election is described below.

 

Definition and General Taxation of a PFIC

 

A non-U.S. corporation will be a PFIC if either (a) at least seventy-five percent (75%) of its gross income in a taxable year, including its pro rata share of the gross income of any corporation in which it owns or is considered to own at least twenty-five percent (25%) of the shares by value, is passive income (the “gross income test”) or (b) at least fifty percent (50%) of its assets in a taxable year, ordinarily determined based on fair market value and averaged quarterly over the year, including its pro rata share of the assets of any corporation in which it owns or is considered to own at least twenty-five percent (25%) of the shares by value, are held for the production of, or produce, passive income (the “asset test”). Passive income generally includes dividends, interest, rents and royalties (other than certain rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets. The determination of whether a foreign corporation is a PFIC is made annually.

 

Pursuant to a “start-up exception”, a corporation will not be a PFIC for the first taxable year the corporation has gross income if (1) no predecessor of the corporation was a PFIC; (2) the corporation satisfies the IRS that it will not be a PFIC for either of the first two taxable years following the start-up year; and (3) the corporation is not in fact a PFIC for either of those years. Taking into account all relevant facts and circumstances, however, there is a material risk that Tenzing will not be eligible for the “start-up exception.”

 

If Tenzing is determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of Tenzing Shares and the U.S. Holder did not make either (a) a timely “qualified election fund” (QEF) election for Tenzing’s first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) Tenzing Shares, (b) a QEF election along with a “purging election,” or (c) a “mark-to-market” (MTM) election, all of which are discussed further below, such U.S. Holder generally will be subject to special rules with respect to any gain recognized by the U.S. Holder on the sale or other disposition of its Tenzing Shares and any “excess distribution” made to the U.S. Holder. Excess distributions are generally any distributions to such U.S. Holder during a taxable year of the U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in respect of the Tenzing Shares during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder’s holding period for the Tenzing Shares.

 

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Under these rules, the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the Tenzing Shares. The amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution, or to the period in the U.S. Holder’s holding period before the first day of Tenzing’s first taxable year in which it qualified as a PFIC, will be taxed as ordinary income. The amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder. The interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable year of the U.S. Holder.

 

In general, if Tenzing is determined to be a PFIC, a U.S. Holder may avoid the tax consequences described above with respect to its Tenzing Shares by making a timely QEF election (or a QEF election along with a purging election), or an MTM election, all as described below.

 

Impact of PFIC Rules on Certain U.S. Holders

 

The impact of the PFIC rules on a U.S. Holder of Tenzing Shares will depend on whether the U.S. Holder has made a timely and effective election to treat Tenzing as a QEF, under Section 1295 of the Code, for Tenzing’s first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) Tenzing Shares, the U.S. Holder made a QEF election along with a “purging election,” or if the U.S. Holder made an MTM election, all as discussed below. A U.S. Holder of a PFIC that made either a timely and effective QEF election, a QEF election along with a purging election, or an MTM election is hereinafter referred to as an “Electing Shareholder.”

 

A U.S. Holder’s ability to make a QEF election with respect to its Tenzing Shares is contingent upon, among other things, the provision by Tenzing of certain information that would enable the U.S. Holder to make and maintain a QEF election. Tenzing will endeavor to provide to a U.S. Holder such information as the IRS may require, including a PFIC annual information statement, in order to enable the U.S. Holder to make and maintain a QEF election, but there can be no assurance that Tenzing will timely provide such information that is required to make and maintain the QEF election.

 

As indicated above, if a U.S. Holder of Tenzing Shares has not made a timely and effective QEF election with respect to Tenzing’s first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) Tenzing Shares, such U.S. Holder generally may nonetheless qualify as an Electing Shareholder by filing on a timely filed U.S. income tax return (including extensions) a QEF election and a purging election to recognize under the rules of Section 1291 of the Code any gain that it would otherwise recognize if the U.S. Holder sold its Tenzing Shares for their fair market value on the “qualification date.” The qualification date is the first day of Tenzing’s tax year in which Tenzing qualifies as a QEF with respect to such U.S. Holder. The purging election can only be made if such U.S. Holder held Tenzing Shares on the qualification date. The gain recognized by the purging election will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above. As a result of the purging election, the U.S. Holder will increase the adjusted tax basis in its Tenzing Shares by the amount of the gain recognized and will also have a new holding period in the Tenzing Shares for purposes of the PFIC rules.

 

Alternatively, if a U.S. Holder, at the close of its taxable year, owns shares in a PFIC that are treated as marketable shares, the U.S. Holder may make an MTM election with respect to such shares for such taxable year. If the U.S. Holder makes a valid MTM election for the first taxable year of the U.S. Holder in which the U.S. Holder holds (or is deemed to hold) Tenzing Shares and for which Tenzing is determined to be a PFIC, such holder will not be subject to the PFIC rules described above in respect to its Tenzing Shares. Instead, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its Tenzing Shares at the end of its taxable year over the adjusted basis in its Tenzing Shares. The U.S. Holder also will be allowed to take an ordinary loss in respect of the excess, if any, of the adjusted basis of its Tenzing Shares over the fair market value of its Tenzing Shares at the end of its taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market election). The U.S. Holder’s basis in its Tenzing Shares will be adjusted to reflect any such income or loss amounts and any further gain recognized on a sale or other taxable disposition of the Tenzing Shares will be treated as ordinary income. The MTM election is available only for shares that are regularly traded on a national securities exchange that is registered with the Securities and Exchange Commission, including Nasdaq, or on a foreign exchange or market that the IRS determines has rules sufficient to ensure that the market price represents a legitimate and sound fair market value. U.S. Holders should consult their own tax advisers regarding the availability and tax consequences of an MTM election in respect to Tenzing Shares under their particular circumstances.

 

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The rules dealing with PFICs and with the timely QEF election, the QEF election with a purging election, and the MTM election are very complex and are affected by various factors in addition to those described above. Accordingly, a U.S. Holder of Tenzing Shares should consult its own tax advisor concerning the application of the PFIC rules to such securities under such holder’s particular circumstances.

 

Effects of Section 367 to U.S. Holders of Tenzing Shares

 

Section 367 of the Code applies to certain non-recognition transactions involving foreign corporations, including a domestication of a foreign corporation in a reorganization within the meaning of Section 368(a) of the Code. Section 367 of the Code imposes income tax on certain United States persons in connection with transactions that would otherwise be tax-free. Section 367(b) of the Code will generally apply to U.S. Holders of Tenzing Shares on the date of the Domestication.

 

A.    U.S. Holders Whose Tenzing Shares Have a Fair Market Value of $50,000 or More and Who Own More Than 10 Percent of the Voting Power or Value of Tenzing

 

A U.S. Holder who, on the date of the Domestication beneficially owns (directly, indirectly or constructively) 10% or more of the total combined voting power or value of Tenzing (a “10% U.S. Shareholder”) must include in income as a dividend the “all earnings and profits amount” (as defined in Treasury Regulation Section 1.367(b)-2(d)) attributable to the Tenzing Shares it directly owns. A U.S. Holder’s ownership of Public Warrants will be taken into account in determining whether such U.S. Holder owns 10% or more of the total combined voting power or value of Tenzing. Complex attribution rules apply in determining whether a U.S. Holder owns 10% or more of the total combined voting power or value of Tenzing and all U.S. Holders are urged to consult their tax advisors with respect to these attribution rules.

 

A 10% U.S. Shareholder’s “all earnings and profits amount” with respect to its Tenzing Shares is the net positive earnings and profits of Tenzing attributable to its shares (as determined under Treasury Regulation Section 1.367(b)-2) but without regard to any gain that would be realized on a sale or exchange of such shares.

 

B.    U.S. Holders Whose Tenzing Shares Have a Fair Market Value of $50,000 or More But Who Own Less Than 10 Percent of the Voting Power or Value of Tenzing

 

A U.S. Holder who, on the date of the Domestication, beneficially owns (directly, indirectly or constructively) Tenzing Shares with a fair market value of $50,000 or more but owns less than 10% of the total combined voting power or value of Tenzing will recognize gain (but not loss) with respect to the Domestication unless such U.S. Holder elects to recognize the “all earnings and profits” amount attributable to such holder as described below.

 

Unless such a U.S. Holder makes the “all earnings and profits” election as described below, such holder generally must recognize gain (but not loss) with respect to Company Common Stock received in the Domestication in an amount equal to the excess of the fair market value of Tenzing Common Stock received over the U.S. Holder’s adjusted tax basis in the Tenzing Shares deemed surrendered in the Domestication.

 

As an alternative to recognizing any gain as described in the preceding paragraph, such a U.S. Holder may elect to include in income as a deemed dividend the “all earnings and profits amount” attributable to its Tenzing Shares under Section 367(b) of the Code. There are, however, strict conditions for making this election. This election must comply with applicable Treasury Regulations and generally must include, among other things:

 

(i)    a statement that the Domestication is a Section 367(b) exchange;

 

(ii)   a complete description of the Domestication;

 

(iii)  a description of any stock, securities or other consideration transferred or received in the Domestication;

 

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(iv)  a statement describing the amounts required to be taken into account for U.S. federal income tax purposes;

 

(v)   a statement that the U.S. Holder is making the election and that includes (A) a copy of the information that the U.S. Holder received from Tenzing establishing and substantiating the “all earnings and profits amount” with respect to the U.S. Holder’s Tenzing Shares, and (B) a representation that the U.S. Holder has notified Tenzing that the U.S. Holder is making the election; and

 

(vi) certain other information required to be furnished with the U.S. Holder’s tax return or otherwise furnished pursuant to the Code or the Treasury Regulations thereunder.

 

In addition, the election must be attached by an electing U.S. Holder to such holder’s timely filed U.S. federal income tax return for the taxable year in which the Domestication occurs, and the U.S. Holder must send notice of making the election to Tenzing no later than the date such tax return is filed. In connection with this election, Tenzing may in its discretion provide each U.S. Holder eligible to make such an election with information regarding Tenzing’s earnings and profits upon request.

 

U.S. HOLDERS ARE STRONGLY URGED TO CONSULT A TAX ADVISOR REGARDING THE CONSEQUENCES OF MAKING AN ELECTION AND THE APPROPRIATE FILING REQUIREMENTS WITH RESPECT TO AN ELECTION.

 

C.   U.S. Holders that Own Tenzing Shares with a Fair Market Value of Less Than $50,000

 

A U.S. Holder who, on the date of the Domestication, beneficially owns (directly, indirectly, or constructively) Tenzing Shares with a fair market value less than $50,000 should not be required to recognize any gain or loss under Section 367 of the Code in connection with the Domestication and generally should not be required to include any part of the “all earnings and profits amount” in income.

 

All U.S. Holders of Tenzing Shares are urged to consult their tax advisors with respect to the effect of Section 367 of the Code to their particular circumstances.

 

Tax Consequences to U.S. Holders That Elect to Have Their Tenzing Shares Converted for Cash

 

This section is addressed to U.S. Holders of Tenzing Shares that elect to have their Tenzing Shares converted for cash as described in the section entitled “Shareholders Meeting — Redemption Rights” and is subject in its entirety to the discussion of the “passive foreign investment company” or “PFIC” rules as discussed above under the section entitled “— Tax Consequences of the Domestication to U.S. Holders of Tenzing Shares — U.S. Holders — PFIC Considerations.” For purposes of this discussion, a “Converting U.S. Holder” is a U.S. Holder that so converts its Tenzing Shares into cash.

 

Except as discussed in the following paragraph and as discussed in the PFIC rules above, a Converting U.S. Holder generally will recognize capital gain or loss equal to the difference between the amount of cash received on the conversion and such shareholder’s adjusted basis in the Tenzing Shares exchanged if the conversion completely terminates the Converting U.S. Holder’s interest in Tenzing (taking into account certain constructive ownership rules). A U.S. Holder’s adjusted tax basis in its Tenzing Shares will generally be equal to the cost of such Tenzing Shares. A U.S. Holder who purchased Tenzing Shares in the IPO generally will have a tax basis in the Tenzing Shares that were part of the units equal to the portion of the purchase price of such units allocated to the Tenzing Shares (such allocation based on the relative fair market value of the Tenzing Shares and the Public Warrants at the time). This gain or loss will be long-term capital gain or loss if the holding period of such stock is more than one year at the time of the exchange. It is possible that because of the conversion rights associated with the Tenzing Shares, the holding period of such shares may not be considered to begin until the date of such conversion (and thus it is possible that long-term capital gain or loss treatment may not apply). The deductibility of capital losses is subject to limitations. Shareholders who hold different blocks of Tenzing Shares (generally, shares of Tenzing purchased or acquired on different dates or at different prices) should consult their tax advisors to determine how the above rules apply to them.

 

Cash received upon conversion that does not completely terminate the Converting U.S. Holder’s interest will still give rise to capital gain or loss, if the conversion is either (i) “substantially disproportionate” or (ii) “not essentially equivalent to a dividend.” In determining whether the conversion is substantially disproportionate or not essentially equivalent to a dividend with respect to a Converting U.S. Holder, that Converting U.S. Holder is deemed to own not only shares actually owned, but also, in some cases, shares such holder may acquire pursuant to options (including shares that may be acquired pursuant to the Public Warrants) and shares owned by certain family members, certain estates and trusts of which the Converting U.S. Holder is a beneficiary and certain corporations and partnerships.

 

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Generally, the conversion will be “substantially disproportionate” with respect to the Converting U.S. Holder if (i) the Converting U.S. Holder’s percentage ownership of the outstanding voting shares (including all classes that carry voting rights) of Tenzing is reduced immediately after the conversion to less than 80% of the Converting U.S. Holder’s percentage interest (including constructive ownership) in such shares immediately before the conversion; (ii) the Converting U.S. Holder’s percentage ownership of the outstanding Tenzing Shares (both voting and nonvoting) immediately after the conversion is reduced to less than 80% of such percentage ownership (including constructive ownership) immediately before the conversion; and (iii) the Converting U.S. Holder owns (including constructive ownership), immediately after the conversion, less than 50% of the total combined voting power of all classes of shares of Tenzing entitled to vote. Whether the conversion will be considered “not essentially equivalent to a dividend” with respect to a Converting U.S. Shareholder will depend upon the particular circumstances of that U.S. Holder. At a minimum, however, the conversion must result in a meaningful reduction in the Converting U.S. Holder’s actual or constructive percentage ownership of Tenzing. If the shareholder’s relative interest in the corporation is minimal and the shareholder does not have meaningful control over the corporation, and taking into account the effect of Redemptions by other shareholder’s, its percentage ownership (including constructive ownership) is reduced as a result of the Redemption, such U.S. Holder should generally be regarded as having a meaningful reduction in its interest. For example, the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority shareholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.” A U.S. Holder should consult with its own tax advisors as to the tax consequences to it of any Redemption of its Tenzing Shares.

 

If none of the tests described above applies and subject to the PFIC rules discussed above, the consideration paid to the Converting U.S. Holder will be treated as dividend income for U.S. federal income tax purposes to the extent of Tenzing’s current or accumulated earnings and profits. Any distribution in excess of earnings and profits will reduce the Converting U.S. Holder’s basis in the Tenzing Shares (but not below zero) and any remaining excess will be treated as gain realized on the sale or other disposition of the Tenzing Shares. U.S. Holders of Tenzing Shares considering exercising their conversion rights should consult their own tax advisors as to whether the conversion will be treated as a sale or as a distribution under the Code.

 

Non-U.S. Holders

 

Tax Consequences for Non-U.S. Holders of Owning and Disposing of Company Common Stock

 

Distributions on Company Common Stock

 

Distributions of cash or property to a Non-U.S. Holder in respect of Company Common Stock received in the Domestication will constitute dividends for U.S. federal income tax purposes to the extent paid from Tenzing’s current or accumulated earnings and profits, as determined under U.S. federal income tax principles. If a distribution exceeds Tenzing’s current and accumulated earnings and profits, the excess will be treated first as a tax-free return of capital to the extent of the Non-U.S. Holder’s adjusted tax basis in Tenzing Common Stock. Any remaining excess will be treated as capital gain and will be treated as described below under “— Gain on Disposition of Company Common Stock.”

 

Dividends paid to a Non-U.S. Holder of Company Common Stock generally will be subject to withholding of U.S. federal income tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. However, dividends that are effectively connected with the conduct of a trade or business by the Non-U.S. Holder within the United States (and, if required by an applicable income tax treaty, are attributable to a U.S. permanent establishment of the Non-U.S. Holder) are not subject to such withholding tax, provided certain certification and disclosure requirements are satisfied. Instead, such dividends are subject to United States federal income tax on a net income basis in the same manner as if the Non-U.S. Holder were a United States person as defined under the Code. Any such effectively connected dividends received by a foreign corporation may be subject to an additional “branch profits tax” at a 30% rate or such lower rate as may be specified by an applicable income tax treaty.

 

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A Non-U.S. Holder of Company Common Stock who wishes to claim the benefit of an applicable treaty rate and avoid backup withholding, as discussed below, for dividends will be required (a) to complete the applicable IRS Form W-8 and certify under penalty of perjury that such holder is not a United States person as defined under the Code and is eligible for treaty benefits or (b) if Tenzing Common Stock are held through certain foreign intermediaries, to satisfy the relevant certification requirements of applicable United States Treasury regulations. Special certification and other requirements apply to certain Non-U.S. Holders that are pass-through entities rather than corporations or individuals.

 

A Non-U.S. Holder of Company Common Stock eligible for a reduced rate of U.S. withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by timely filing an appropriate claim or refund with the IRS. Non-U.S. Holders are urged to consult their own tax advisors regarding their entitlement to the benefits under any applicable income tax treaty.

 

Gain on Disposition of Company Common Stock

 

Subject to the discussion of backup withholding below, any gain realized by a Non-U.S. Holder on the taxable disposition of Company Common Stock generally will not be subject to U.S. federal income tax unless:

 

•      the gain is effectively connected with a trade or business of the Non-U.S. Holder in the United States (and, if required by an applicable income tax treaty, is attributable to a United States permanent establishment of the non-U.S. Holder);

 

•      the Non-U.S. Holder is an individual who is present in the United States for a period or periods aggregating 183 days or more in the taxable year of the disposition, and certain other conditions are met; or

 

•      Tenzing is or has been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five year period ending on the date of disposition or the Non-U.S. Holder’s holding period for such securities disposed of, and, generally, in the case where shares of Company Common Stock are regularly traded on an established securities market, the Non-U.S. Holder has owned, directly or indirectly, more than 5% of such Shares, as applicable, at any time during the shorter of the five year period ending on the date of disposition or the Non-U.S. Holder’s holding period for the Shares disposed of. There can be no assurance that shares of Company Common Stock will be treated as regularly traded on an established securities market for this purpose.

 

An individual Non-U.S. Holder described in the first bullet point immediately above will be subject to tax on the net gain derived from the sale under regular graduated U.S. federal income tax rates. An individual Non-U.S. Holder described in the second bullet point immediately above will be subject to a flat 30% tax on the gain derived from the sale, which may be offset by United States source capital losses, even though the individual is not considered a resident of the United States, provided that the individual has timely filed U.S. federal income tax returns with respect to such losses. If a Non-U.S. Holder that is a foreign corporation falls under the first bullet point immediately above, it will be subject to tax on its net gain in the same manner as if it were a United States person as defined under the Code and, in addition, may be subject to the branch profits tax equal to 30% (or such lower rate as may be specified by an applicable income tax treaty) of its effectively connected earnings and profits, subject to adjustments.

 

Tenzing does not believe it is and does not anticipate becoming a “United States real property holding corporation” for U.S. federal income tax purposes. However, the determination as to whether Tenzing is or will become a “United States real property holding corporation” will not be made until a future tax year, and there can be no assurance that Tenzing will not become such a corporation in the future.

 

Tax Consequences to Non-U.S. Holders That Elect to Have Their Tenzing Shares Converted for Cash

 

This section is addressed to Non-U.S. Holders of Tenzing Shares that elect to have their Tenzing Shares converted for cash as described in the section entitled “Shareholders Meeting — Redemption Rights.” For purposes of this discussion, a “Converting Non-U.S. Holder” is a Non-U.S. Holder that so converts its Tenzing Shares.

 

Except as otherwise discussed in this section, a Converting Non-U.S. Holder who elects to have its Tenzing Shares converted for cash will generally be treated in the same manner as a Converting U.S. Holder for U.S. federal income tax purposes. See the discussion above under “— U.S. Holders — Tax Consequences to U.S. Holders That Elect to Have Their Tenzing Shares Converted for Cash.

 

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A Converting Non-U.S. Holder will not be subject to U.S. federal income tax on any gain recognized as a result of the exchange unless:

 

•      such Converting Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year in which the Redemption takes place and certain other conditions are met; or

 

•      such Converting Non-U.S. Holder is engaged in a trade or business within the United States and any gain recognized in the exchange is treated as effectively connected with such trade or business (and, if required by an applicable income tax treaty, the gain is attributable to a United States permanent establishment of such Non-U.S. Holder), in which case the Converting Non-U.S. Holder will generally be subject to the same treatment as a Converting U.S. Holder with respect to the exchange, and a Converting Non-U.S. Holder that is classified as a corporation for U.S. federal income tax purposes may be subject to an additional branch profits tax at a 30% rate (or lower rate as may be specified by an applicable income tax treaty).

 

With respect to any Redemption of Tenzing Shares for cash that is treated as a distribution rather than a sale, any amount treated as dividend income to a Converting Non-U.S. Holder will generally be subject to U.S. withholding tax at a rate of 30%, unless the Converting Non-U.S. Holder is entitled to a reduced rate of withholding under an applicable income tax treaty. However, dividends received by a Converting Non-U.S. Holder that are effectively connected with such holder’s conduct of a U.S. trade or business (and, if required by an applicable income tax treaty, such dividends are attributable to a United States permanent establishment of the Converting Non-U.S. Holder), will be taxed as discussed above under “— U.S. Holders — Tax Consequences to U.S. Holders That Elect to Have Their Tenzing Shares Converted for Cash.” In addition, dividends received by a Converting Non-U.S. Holder that is classified as a corporation for U.S. federal income tax purposes that are effectively connected with the holder’s conduct of a U.S. trade or business may also be subject to an additional branch profits tax at a rate of 30% or such lower rate as may be specified by an applicable income tax treaty.

 

Converting Non-U.S. Holders of Tenzing Shares considering exercising their Redemption Rights should consult their own tax advisors as to whether the Redemption of their shares will be treated as a sale or as a distribution under the Code.

 

Information Reporting and Backup Withholding

 

Tenzing must report annually to the IRS and to each Non-U.S. Holder the amount of dividends paid to such holder and the tax withheld with respect to such dividends, regardless of whether withholding was required. Copies of the information returns reporting such dividends and withholding may also be made available to the tax authorities in the country in whi