NOTE 7. COMMITMENTS AND CONTINGENCIES Registration Rights Pursuant to a registration rights agreement entered into on July 24, 2018, the holders of the founder shares, Private Units (and their underlying securities) and any Units that may be issued upon conversion of the Working Capital Loans (and underlying securities) are entitled to registration rights. The holders of 25% of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. Notwithstanding the foregoing, Chardan may not exercise its demand and "piggyback" registration rights after five (5) and seven (7) years, respectively, after the effective date of the registration statement and may not exercise its demand rights on more than one occasion. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriting Agreement The underwriters were paid a cash underwriting discount of $1,320,000. In addition, the underwriters deferred their fee of $1,010,580, which assumes the redemption of 3,747,102 ordinary shares as of August 31, 2019 in connection with a Business Combination. Pursuant to the Company's agreement with the underwriters, 50% of such deferred discounts and commissions ($0.20, or 2.0%, for each unit) is payable based on the number of shares that are not redeemed by shareholders in connection with a Business Combination. However, in the event no shares are redeemed, the underwriters would be entitled to a fee of $1,760,000. The deferred fee will be paid in cash upon the closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement. Share Exchange Agreement On July 12, 2019, the Company entered into a share exchange agreement (the "Share Exchange Agreement") with Zhongchai Holding, the Sponsor, in the capacity thereunder as the purchaser representative (the "Purchaser Representative"), and Cenntro Holding Limited, the sole member of Zhongchai Holding (the "Zhongchai Equity Holder"), pursuant to which, among other things and subject to the terms and conditions contained therein, the Company will consummate the acquisition of all of the outstanding capital stock of Zhongchai Holding through a share exchange, with Zhongchai Holding becoming a direct wholly owned subsidiary of the Company (the "Zhongchai Business Combination"). Pursuant to the Share Exchange Agreement, the Company will issue 7,500,000 ordinary shares to the Zhongchai Equity Holder. Ten percent (10%) of the Exchange Shares ("Escrow Shares") will be deposited in escrow at the closing of the Zhongchai Business Combination (the "Closing") for a period of eighteen (18) months (subject to further retention in the escrow account to the extent that there are pending indemnification claims brought prior to such time). During such time, the Escrow Shares will be subject to forfeiture back to the Company (along with dividends and other earnings otherwise payable with respect to such Escrow Shares) in the event that the Purchaser Representative successfully brings an indemnification claim under the Share Exchange Agreement on behalf of the Company's shareholders. The Zhongchai Equity Holder will be entitled to vote the Escrow Shares while they are held in escrow. The Zhongchai Business Combination will be consummated subject to the deliverables and provisions as further described in the Share Exchange Agreement. Subscription Agreements On September 8, 2019, the Company entered into subscription agreements ("Subscription Agreements") with certain investors (the "PIPE Investors"), pursuant to which the Company agreed to issue and sell to the PIPE Investors an aggregate of $6,000,000 of ordinary shares of the Company, at a price of $10.25 per share, in a private placement (the "PIPE Financing"). Two Subscription Agreements were entered into, one of which provided for $1,000,000 of the PIPE Financing (the "$1M Agreement"), and the other for $5,000,000 of the PIPE Financing (the "$5M Agreement"). Pursuant to $1M Agreement, the PIPE Investor had the right to reduce its obligation with respect to the PIPE Financing to the extent that it purchases the Company's shares in one or more open market purchases or in privately negotiated transactions with third parties (any shares so purchased, "Backstop Shares"), which if held and not redeemed in accordance with the requirements of the $1M Agreement, will reduce the number of Company's shares required to be purchased by such PIPE Investors in the PIPE Financing. The PIPE Investors have agreed to (i) not transfer prior to the Closing any Backstop Shares that they own or otherwise acquire, (ii) vote at the special meeting of shareholders of the Company all of the Backstop Shares that they own or acquire, or otherwise have proxy rights with respect to, in favor of the Zhongchai Business Combination, and each of the other proposals in the special meeting of shareholders of the Company, and (iii) waive and not exercise their redemption rights for any Backstop Shares that they own or acquire. The Company has been advised that by reason of its market purchases, the PIPE Investor will not be purchasing any ordinary shares from the Company. Effective October 17, 2019, the Company and the subscriber which entered into the $5M Agreement, mutually agreed to terminate the $5M Agreement pursuant to a termination agreement. As a result, the Company has not issued, and does not expect to issue, any ordinary shares pursuant to the Subscription Agreements. More information about the Zhongchai Business Combination is included in the definitive proxy statement/prospectus that the Company filed with the SEC on September 26, 2019. The definitive proxy statement/prospectus contains the notice of special meeting of shareholders of the Company to vote on and adopt the Share Exchange Agreement and to vote on certain related proposals. The special meeting was scheduled for October 17, 2019, which was adjourned to October 24, 2019. There is no guarantee that the Company will be able to hold its special meeting on the scheduled day or at all, or that the conditions to the closing of the Zhongchai Business Combination will be satisfied prior to, or following such meeting. Legal Matters On July 12, 2019, the Company filed with the SEC a preliminary proxy statement in connection with a special meeting of the shareholders of the Company to consider and vote on the Business Combination and related matters. Subsequently, the Company filed an amendment to the Preliminary Proxy Statement (the "Amended Preliminary Proxy Statement") and on September 26, 2019, the Company filed with the SEC a definitive proxy statement (the "Definitive Proxy Statement"). As disclosed in the Definitive Proxy Statement, on September 19, 2019, a purported class action challenging the Business Combination was filed in the United States District Court for the District of Delaware (the "District Court"), captioned Wheby v. Greenland Acquisition Corporation, et al., Case No. 19-1758-MN (D. Del.) (the "Action"). The Action alleged certain violations of the Securities Exchange Act of 1934, as amended, and sought, among other things, to enjoin the Business Combination from closing (or, if consummated, to rescind the Business Combination or award rescissory damages), to require the Company to issue a separate proxy statement, and to receive an award of attorneys' fees and costs. The Company believes that the allegations in the complaint are without merit and denies that any further disclosure beyond that already contained in the Preliminary Proxy Statement is required under applicable law to supplement the Preliminary Proxy Statement included therein which has been disseminated to shareholders of the Company. Nonetheless, in order to moot plaintiff's unmeritorious disclosure claims, avoid nuisance and possible expenses, and provide additional information to the shareholders, the Company determined to voluntarily make minor modifications to the Definitive Proxy Statement, which the Company deemed immaterial. On October 14, 2019, the plaintiff, the Company and all other named defendants in the Action entered into a confidential memorandum of understanding (the "MOU"), pursuant to which a Stipulation and Order of Dismissal ("Stipulation of Dismissal") of the Action was filed on October 14, 2019. The Stipulation of Dismissal was approved and entered by the District Court on October 15, 2019. Among other things, the Stipulation of Dismissal acknowledged that the Definitive Proxy Statement mooted the plaintiff's claims regarding the sufficiency of disclosures, dismissed all claims asserted in the Action, with prejudice as to the plaintiff only, permits the plaintiff to seek an award of attorneys' fees in connection with the mooted claims, and reserves the defendants' rights to oppose such an award, if appropriate.