Item
1. Business.
Introduction
We
are a blank check company incorporated on November 15, 2019 as a Cayman Islands exempted company and formed for the purpose of
effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one
or more businesses (“Business Combination”). We have reviewed, and continue to review, a number of opportunities to
enter into a Business Combination with an operating business, but we are not able to determine at this time whether we will complete
a Business Combination with any of the target businesses that we have reviewed or with any other target business. We also have
neither engaged in any operations nor generated any revenue to date. Based on our business activities, we are a “shell company”
as defined under the Exchange Act because we have no operations and nominal assets consisting almost entirely of cash. References
to “we”, “us”, “our” or the “Company” are to SCVX Corp., except where the context
requires otherwise.
On
January 28, 2020, we consummated the Initial Public Offering of 23,000,000 units (the “Units” and, with respect to
Class A ordinary shares included in the units, the “Public Shares”), including the issuance of 3,000,000 Units as
a result of the underwriters’ exercise of their over-allotment option in full, at $10.00 per Unit, generating gross proceeds
of $230.0 million.
In
connection with the Initial Public Offering, we incurred offering costs of approximately $13.3 million, inclusive of $4.6 million
in underwriting discounts and approximately $8.1 million in deferred underwriting commissions. Substantially concurrently with
the closing of the Initial Public Offering, we also repaid SCVX USA LLC, a Delaware limited liability company (our “Sponsor”)
approximately $139,000 in full satisfaction of a promissory note (the “Note”). After deducting the underwriting discounts
and commissions (excluding the deferred portion, which amount will become payable solely in the event that we complete a Business
Combination, subject to the terms of the underwriting agreement) and other offering costs and expenses, the net proceeds from
the Initial Public Offering and private placement we consummated simultaneously with the closing of the Initial Public Offering
(the “Private Placement”) was approximately $231.4 million. A total of $230.0 million, comprised of certain of the
net proceeds of the Initial Public Offering and the Private Placement, was placed in a trust account (the “Trust Account”),
and was invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company
Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund
selected by us meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, as determined
by us, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account. As of
December 31, 2021, we held approximately $146,000 outside of the Trust Account available to us for our activities in connection
with identifying a suitable Business Combination and for general working capital purposes.
Simultaneously
with the closing of the Initial Public Offering, we consummated the Private Placement of 6,600,000 Private Placement Warrants
to our Sponsor at a purchase price of $1.00 per Private Placement Warrant, generating gross proceeds of $6.6 million. Each Private
Placement Warrant is exercisable for one Class A ordinary share at a price of $11.50 per share, subject to adjustment. The Private
Placement Warrants may be exercised only for a whole number of shares. If we do not complete our initial Business Combination
before July 28, 2022 (the “Combination Period”), the Private Placement Warrants will expire worthless. The Private
Placement Warrants will not be redeemable by us and will be exercisable on a cashless basis so long as they are held by our Sponsor
or its permitted transferees. If the Private Placement Warrants are held by holders other than our Sponsor or its permitted transferees,
the Private Placement Warrants will be redeemable by us and exercisable by the holders on the same basis as the Public Warrants
included in the Units sold in the Initial Public Offering. The Private Placement Warrants (including the Class A ordinary shares
issuable upon exercise thereof) will not be transferable, assignable or salable until 30 days after the completion of our initial
Business Combination. The issuance of the Private Placement Warrants was made pursuant to the exemption from registration contained
in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). Our Sponsor is an accredited
investor for purposes of Rule 501 of Regulation D. No underwriting discounts or commissions were paid with respect to such sale.
On January 25, 2022, we held
an Extraordinary General Meeting (the “Extraordinary General Meeting”). At the Extraordinary General Meeting, the shareholders
approved extending the date, from January 28, 2022 to July 28, 2022, by which we much either (a) consummate a merger, share exchange,
asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities or (b) (i) cease
all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter,
redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including
interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the
number of then outstanding Public Shares, which redemption will completely extinguish Public Shareholders’ rights as shareholders
(including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such
redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case
of clauses (ii) and (iii) to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other
applicable law. In connection with the vote to approve the extension proposal, the holders of 19,207,987 Class A ordinary shares properly
exercised their right to redeem their shares for cash at a redemption price of approximately $10.02 per share, for an aggregate redemption
amount of approximately $192.5 million. As such, approximately 84% of the Class A ordinary shares were redeemed and approximately 16%
of the Class A ordinary shares remain outstanding. After the satisfaction of such redemptions, the balance in our Trust Account is approximately
$38.0 million.
Business
Strategy
Our
business strategy is to leverage the Strategic Cyber Ventures (together with its affiliates, “SCV”) and Hudson Bay
Capital Management LP (together with its affiliates, “Hudson Bay”) investment platforms to identify, evaluate and
complete an initial business combination with a company that we believe exhibits unrecognized value, including as a platform for
consolidation. Although we intend to acquire a company that has sufficient scale to be a successful public company on its own,
we believe that there exists a consolidation opportunity in the cybersecurity sector.
We
believe that corporate customers are increasingly seeking diversified cybersecurity platforms that can provide multiple services
across the security ecosystem. We do not intend to limit our search to one segment of the cybersecurity ecosystem, but will instead
target a wide variety of companies that provide critical security support. We believe that our management team’s extensive
experience and demonstrated success in both investing and operating businesses in this industry has culminated in a unique set
of capabilities that will be utilized in generating shareholder returns.
Our
founders regularly communicate with their networks of relationships to articulate the parameters for our search for a target company
and a potential business combination and are pursuing and reviewing potential opportunities.
Acquisition
Criteria
Consistent
with our business strategy, we have identified the following general criteria and guidelines that we believe are important in
evaluating prospective target businesses. We use these criteria and guidelines in evaluating acquisition opportunities, but we
may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines.
We intend to seek to acquire companies that we believe:
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can
serve as a platform for consolidation and growth within the cybersecurity market; |
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have
a strong, experience management team in place, or are a platform to assemble an effective management team with a track record
of driving growth and profitability; |
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have
a defensible market position, with demonstrated advantages when compared to their competitors and which create barriers to
entry against new competitors; |
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are
at an inflection point, such as requiring additional management expertise, are able to innovate through new operational techniques,
or where we believe we can drive improved financial performance; |
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are
fundamentally sound companies that are underperforming their potential; |
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exhibit
unrecognized value or other characteristics, desirable returns on capital, and a need for capital to achieve the company’s
growth strategy, that we believe have been misevaluated by the marketplace based on our analysis and due diligence review; |
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will
offer an attractive risk-adjusted return for our shareholders, potential upside from growth in the target business and an
improved capital structure will be weighed against any identified downside risks; and |
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can
benefit from being a publicly traded company, are prepared to be a publicly traded company, and can utilize access to broader
capital markets. |
These
criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination
may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our
management may deem relevant. In the event that we decide to enter into our initial business combination with a target business
that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria
in our shareholder communications related to our initial business combination, which would be in the form of proxy solicitation
materials or tender offer documents that we would file with the Securities and Exchange Commission (“SEC”).
In
addition to any potential business candidates we may identify on our own, we anticipate that other target business candidates
will be brought to our attention from various unaffiliated sources, including investment market participants, private equity funds
and large business enterprises seeking to divest non-core assets or divisions.
Our
Acquisition Process
In
evaluating a prospective target business, we conduct a thorough due diligence review which may encompass, as applicable and among
other things, meetings with incumbent management and employees, document reviews, code reviews, security audits, interviews of
customers and suppliers, inspection of facilities and a review of financial and other information about the target and its industry.
Each
of our directors and officers owns Class B ordinary shares, par value $0.0001 (“Founder Shares”) and/or private placement
warrants and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate
business with which to effectuate our initial business combination. Further, such officers and directors may have a conflict of
interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and
directors was included by a target business as a condition to any agreement with respect to our initial business combination.
Certain
of our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations
to another entity pursuant to which such officer or director is or will be required to present a business combination opportunity
to such entity subject to his or her fiduciary duties. Subject to his or her fiduciary duties under Cayman Islands law, none of
the members of our management team who are also employed by our sponsor or its affiliates have any obligation to present us with
any opportunity for a potential business combination of which they become aware. If any of our officers or directors becomes aware
of a business combination opportunity that falls within the line of business of any entity to which he or she has pre-existing
fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity
prior to presenting such business combination opportunity to us, subject to his or her fiduciary duties under Cayman Islands law
and any other applicable fiduciary duties. Our amended and restated memorandum and articles of association provides that we renounce
our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such
person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to complete
on a reasonable basis. For more information, see the section entitled “Management — Conflicts of Interest.”
Our existing officers and
directors have agreed (and future officers and directors will be required to agree) not to participate in the formation of, or become
an officer or director of, any blank check company until we have entered into a definitive agreement regarding our initial business combination,
failed to complete our initial business combination within the Combination Period or liquidated prior to the end of such period.
Sourcing
Potential Business Combination Targets
We
believe our management team’s significant operating and transaction experience and relationships with companies will provide
us with a substantial number of potential business combination targets. Over the course of their careers, the members of our management
team have developed a broad network of contacts and corporate relationships around the world. This network has grown through the
activities of our management team sourcing, acquiring, financing and selling businesses, our management team’s relationships
with sellers, financing sources and target management teams and the experience of our management team in executing transactions
under varying economic and financial market conditions.
In
addition, members of our management team have developed contacts from serving on the Boards of Directors of several companies,
including SCV.
We
believe this network provides our management team with a robust and consistent flow of acquisition opportunities which are proprietary
or where a limited group of investors are invited to participate in the sale process. We believe that the network of contacts
and relationships of our management team provides us with important sources of acquisition opportunities. In addition, target
business candidates may be brought to our attention from various unaffiliated sources, including investment market participants,
private equity funds and large business enterprises seeking to divest non-core assets or divisions.
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, directors
or officers, or making the acquisition through a joint venture or other form of shared ownership with our sponsor, directors or
officers. In the event we seek to complete an initial business combination with a target that is affiliated with our sponsor,
directors or officers, we, or a committee of independent and disinterested directors, would obtain an opinion from an independent
investment banking firm that is a member of the Financial Industry Regulatory Authority (“FINRA”) or from an independent
accounting firm that such an initial business combination is fair to our company from a financial point of view. We are not required
to obtain such an opinion in any other context.
As
more fully discussed in “Management — Conflicts of Interest,” if any of our directors or officers becomes aware
of a business combination opportunity that falls within the line of business of any entity to which he or she has pre-existing
fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity
prior to presenting such business combination opportunity to us. Our directors and officers currently have fiduciary duties or
contractual obligations that may take priority over their duties to us.
Our
executive offices are located at Attn: Strategic Cyber Ventures, 1220 L Street NW, Suite 100-397, Washington, D.C. 20005, and
our telephone number is (202) 681-8461.
Mail
addressed to the Company and received at its registered office will be forwarded unopened to the forwarding address supplied by
the Company to be dealt with. None of the Company or its directors, officers, advisors or service providers (including the organization
which provides registered office services in the Cayman Islands) will bear any responsibility for any delay howsoever caused with
regards to mail reaching the forwarding address.
Status
as a Public Company
We
believe our structure makes us an attractive business combination partner to target businesses. As an existing public company,
we offer target businesses an alternative to the traditional initial public offering through a merger, share exchange, asset acquisition,
share purchase, reorganization or similar business combination. In this situation, the owners of the target business would exchange
their shares or shares of stock in the target business for our shares or for a combination of our shares and cash, allowing us
to tailor the consideration to the specific needs of the sellers. Although there are various costs and obligations associated
with being a public company, we believe target businesses will find this method a more certain and cost effective method to becoming
a public company than the typical initial public offering. In a typical initial public offering, there are additional expenses
incurred in marketing, road show and public reporting efforts that may not be present to the same extent in connection with a
business combination with us.
Furthermore,
once a proposed business combination is completed, the target business will have effectively become public, whereas an initial
public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions,
which could delay or prevent the offering from occurring. Once public, we believe the target business would then have greater
access to capital and an additional means of providing management incentives consistent with shareholders’ interests. It
can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting
talented employees.
We
are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary
of the completion of our Initial Public Offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or
(c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that is held by
non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter, and (2) the date on which we have
issued more than $1.00 billion in non-convertible debt securities during the prior three-year period.
Additionally,
we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may
take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial
statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of
our ordinary shares held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (2)
our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by
non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter.
Financial
Position
With funds available for a business combination initially in the amount
of approximately $29.9 million assuming no additional redemptions and after payment of approximately $8.1 million of deferred underwriting
fees, we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential
growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete
our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility
to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs
and desires. However, we have not taken any steps to secure third-party financing and there can be no assurance it will be available to
us.
Effecting
Our Business Combination
We
are not presently engaged in, and we will not engage in, any operations for an indefinite period of time. We intend to effectuate
our initial business combination using cash from the proceeds of our Initial Public Offering and the sale of the private placement
warrants, our shares, debt or a combination of these as the consideration to be paid in our initial business combination. We may
seek to complete our initial business combination with a company or business that may be financially unstable or in its early
stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If
our initial business combination is paid for using equity or debt, or not all of the funds released from the trust account are
used for payment of the consideration in connection with our initial business combination or the redemptions of our public shares,
we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance
or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred
in completing our initial business combination, to fund the purchase of other companies or for working capital.
We
may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of
our initial business combination, and we may effectuate our initial business combination using the proceeds of such offering rather
than using the amounts held in the trust account.
In
the case of an initial business combination funded with assets other than the trust account assets, our tender offer documents
or proxy materials disclosing the business combination would disclose the terms of the financing and, only if required by law
or we decide to do so for business or other reasons, we would seek shareholder approval of such financing. There are no prohibitions
on our ability to raise funds privately or through loans in connection with our initial business combination.
Selection
of a Target Business and Structuring of Our Business Combination
Our amended and restated memorandum
and articles of association require that our initial business combination must be with one or more operating businesses or assets with
a fair market value equal to at least 80% of the net assets held in the trust account (net of amounts disbursed to management for working
capital purposes, if permitted, and excluding the amount of any deferred underwriting discount). We refer to this as the 80% of net assets
test. The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally
accepted by the financial community, such as discounted cash flow valuation or value of comparable businesses. If our board is not able
independently to determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment
banking firm, or another independent entity that commonly renders valuation opinions, with respect to the satisfaction of such criteria.
We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination,
although there is no assurance that will be the case. Subject to this requirement, our management has virtually unrestricted flexibility
in identifying and selecting one or more prospective target businesses, although we are not permitted to effectuate our initial business
combination solely with another blank check company or a similar company with nominal operations.
We
will only complete an initial business combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding
voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required
to register as an investment company under the Investment Company Act. If less than 100% of the equity interests or assets of a target
business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned
or acquired is what will be valued for purposes of the 80% of net assets test. There is no basis for our shareholders to evaluate the
possible merits or risks of any target business with which we may ultimately complete our initial business combination.
To
the extent we effect our initial business combination with a company or business that may be financially unstable or in its early
stages of development or growth we may be affected by numerous risks inherent in such company or business. Although our management
will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain
or assess all significant risk factors.
In
evaluating a prospective target business, we conduct a thorough due diligence review which may encompass, among other things,
meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial,
operational, legal and other information, which will be made available to us.
The
time required to select and evaluate a target business and to structure and complete our initial business combination, and the
costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect
to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately
completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Lack
of Business Diversification
For
an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend
entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations
with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations
and mitigate the risks of being in a single line of business. By completing our initial business combination with only a single
entity, our lack of diversification may:
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subject
us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact
on the particular industry in which we operate after our initial business combination; and |
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cause
us to depend on the marketing and sale of a single product or limited number of products or services. |
Limited
Ability to Evaluate the Target’s Management Team
Although
we closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial
business combination with that business, our assessment of the target business’s management may not prove to be correct.
In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company.
Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with
any certainty. While it is possible that one or more of our directors will remain associated in some capacity with us following
our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to
our initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience
or knowledge relating to the operations of the particular target business.
We
cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company.
The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our
initial business combination.
Following
our initial business combination, we may seek to recruit additional managers to supplement the incumbent management of the target
business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will
have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Shareholders
May Not Have the Ability to Approve Our Business Combination
We
may conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC subject to the provisions of
our amended and restated memorandum and articles of association. However, we will seek shareholder approval if it is required
by applicable law or stock exchange listing requirement, or we may decide to seek shareholder approval for business or other reasons.
The
Companies Law (2018 Revision) of the Cayman Islands (the “Companies Law”) and Cayman Islands law do not currently
require, and we are not aware of any other applicable law that will require, shareholder approval of our initial business combination.
Permitted
purchases of our securities
In
the event we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with
our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their
affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or
following the completion of our initial business combination. There is no limit on the number of securities such persons may purchase.
Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with
respect to material nonpublic information), our sponsor, directors, officers, advisors or any of their affiliates may enter into
transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor
of our initial business combination or not redeem their public shares. In the event our initial shareholders, directors, officers,
advisors or any of their affiliates determine to any such transactions, such transactions could have the effect of influencing
the vote necessary to approve such transaction. None of the funds held in the trust account will be used to purchase public shares
or warrants in such transactions. They will be restricted from making any such purchases when they are in possession of any material
non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act.
Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of our shares,
is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. We adopted an insider trading
policy which requires insiders to (1) refrain from purchasing securities during certain blackout periods and when they are in
possession of any material non-public information and (2) to clear certain trades prior to execution. We cannot currently determine
whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including
but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such
purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.
In
the event that our sponsor, directors, officers, advisors or any of their affiliates purchase shares in privately negotiated transactions
from public shareholders who have already elected to exercise their redemption rights or submitted a proxy to vote against our
initial business combination, such selling shareholders would be required to revoke their prior elections to redeem their shares
and any proxy to vote against our initial business combination. We do not currently anticipate that such purchases, if any, would
constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the
going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases
are subject to such rules, the purchasers will be required to comply with such rules.
The
purpose of such transaction could be to (1) vote in favor of the business combination and thereby increase the likelihood of obtaining
shareholder approval of our initial business combination, (2) reduce the number of public warrants outstanding or vote such warrants
on any matters submitted to the warrant holders for approval in connection with our initial business combination or (3) satisfy
a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at
the closing of our initial business combination, where it appears that such requirement would otherwise not be met. This may result
in the completion of our initial business combination that may not otherwise have been possible.
In
addition, if such purchases are made, the public “float” of our securities and the number of beneficial holders of
our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities
on a national securities exchange.
Our
sponsor, directors, officers, advisors and/or any of their affiliates anticipate that they may identify the shareholders with
whom our sponsor, directors, officers, advisors or any of their affiliates may pursue privately negotiated transactions by either
the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders (in the case of public
shares) following our mailing of tender offer or proxy materials in connection with our initial business combination. To the extent
that our sponsor, directors, officers, advisors or any of their affiliates enter into private transactions, they would identify
and contact only potential selling or redeeming shareholders who have expressed their election to redeem their shares for a pro
rata share of the trust account or vote against our initial business combination. Such persons would select the shareholders from
whom to acquire shares based on the number of shares available, the negotiated price per share and such other factors as any such
person may deem relevant at the time of purchase. The price per share paid in any such transaction may be different than the amount
per share a public shareholder would receive if it elected to redeem its shares in connection with our initial business combination.
Our sponsor, directors, officers, advisors or any of their affiliates are restricted from purchasing shares if such purchases
do not comply with Regulation M under the Exchange Act and the other federal securities laws.
Any
purchases by our sponsor, directors, officers and/or any of their affiliates who are affiliated purchasers under Rule 10b-18 under
the Exchange Act are restricted unless such purchases are made in compliance with Rule 10b-18, which is a safe harbor from liability
for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that
must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, directors, officers and/or any
of their affiliates are restricted from making purchases of ordinary shares if the purchases would violate Section 9(a)(2) or
Rule 10b-5 of the Exchange Act.
Redemption
Rights for Public Shareholders Upon Completion of Our Business Combination
We
will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion
of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the
trust account calculated as of two business days prior to the consummation of the initial business combination, including interest
(which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to
the limitations described herein. At the completion of our initial business combination, we will be required to purchase any ordinary
shares properly delivered for redemption and not withdrawn. The amount in the trust account was initially $10.00 per public share.
The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting
commissions we will pay to the underwriters in our Initial Public Offering. Our initial shareholders, directors and officers have
entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any
founder shares and public shares held by them in connection with the completion of our initial business combination.
Manner
of Conducting Redemptions
We
will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion
of our initial business combination either (1) in connection with a shareholder meeting called to approve the business combination
or (2) by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination
or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the
timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable
law or stock exchange listing requirement. Asset acquisitions and share purchases would not typically require shareholder approval
while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our issued
and outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association would typically
require shareholder approval. We intend to conduct redemptions without a shareholder vote pursuant to the tender offer rules of
the SEC unless shareholder approval is required by applicable law or stock exchange listing requirement or we choose to seek shareholder
approval for business or other reasons.
If
a shareholder vote is not required and we do not decide to hold a shareholder vote for business or other reasons, we will, pursuant
to our amended and restated memorandum and articles of association:
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conduct
the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and |
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file
tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same
financial and other information about the initial business combination and the redemption rights as is required under Regulation
14A of the Exchange Act, which regulates the solicitation of proxies. |
Upon
the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules,
we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase our ordinary shares in the open
market, in order to comply with Rule 14e-5 under the Exchange Act.
In
the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business
days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination
until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public shareholders not
tendering more than a specified number of public shares, which number will be based on the requirement that we may not redeem
public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions, or
any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial business combination.
If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete
such initial business combination.
If,
however, shareholder approval of the transaction is required by applicable law or stock exchange listing requirement, or we decide
to obtain shareholder approval for business or other reasons, we will, pursuant to our amended and restated memorandum and articles
of association:
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conduct
the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the
solicitation of proxies, and not pursuant to the tender offer rules; and |
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file
proxy materials with the SEC. |
We expect that a final proxy
statement would be mailed to public shareholders at least 10 days prior to the shareholder vote. However, we expect that a draft proxy
statement would be made available to such shareholders well in advance of such time, providing additional notice of redemption if we conduct
redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently intend to comply with the substantive
and procedural requirements of Regulation 14A in connection with any shareholder vote even if we are not able to maintain our Exchange
Act registration.
In
the event that we seek shareholder approval of our initial business combination, we will distribute proxy materials and, in connection
therewith, provide our public shareholders with the redemption rights described above upon completion of the initial business
combination.
If
we seek shareholder approval, we will complete our initial business combination only if we receive an ordinary resolution under
Cayman Islands law, which requires the affirmative vote of holders of a majority of ordinary shares who attend and vote at a general
meeting of the company. In such case, pursuant to the terms of a letter agreement entered into with us, our initial shareholders
have agreed (and their permitted transferees will agree) to vote their founder shares and any public shares held by them in favor
of our initial business combination. Our directors and officers also have agreed to vote in favor of our initial business combination
with respect to public shares acquired by them, if any. We expect that at the time of any shareholder vote relating to our initial
business combination, our initial shareholders and their permitted transferees will own at least 20% of our issued and outstanding
ordinary shares entitled to vote thereon. Each public shareholder may elect to redeem their public shares without voting and,
if they do vote, irrespective of whether they vote for or against the proposed transaction. In addition, our initial shareholders,
directors and officers have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption
rights with respect to any founder shares and public shares held by them in connection with the completion of a business combination.
Our
amended and restated memorandum and articles of association provides that in no event will we redeem our public shares in an amount
that would cause our net tangible assets to be less than $5,000,001 following such redemptions. Redemptions of our public shares
may also be subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial business
combination. For example, the proposed business combination may require: (1) cash consideration to be paid to the target or its
owners; (2) cash to be transferred to the target for working capital or other general corporate purposes; or (3) the retention
of cash to satisfy other conditions in accordance with the terms of the proposed business combination. 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 us, we will not complete the business combination or redeem any shares, and all ordinary shares submitted for
redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
Limitation
on Redemption Upon Completion of Our Business Combination if We Seek Shareholder Approval
Notwithstanding
the foregoing redemption rights, if we seek shareholder approval of our initial business combination and we do not conduct redemptions
in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and
articles of association provides 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 redeeming its shares with respect to more than an aggregate of 15% of the shares sold in our Initial Public
Offering (“Excess Shares”), without our prior consent. We believe this restriction will discourage shareholders from
accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption
rights against a proposed business combination as a means to force us or our sponsor or its affiliates to purchase their shares
at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder
holding more than an aggregate of 15% of the shares sold in our Initial Public Offering could threaten to exercise its redemption
rights if such holder’s shares are not purchased by us or our sponsor or its affiliates at a premium to the then-current
market price or on other undesirable terms. By limiting our shareholders’ ability to redeem no more than 15% of the shares
sold in our Initial Public Offering, we believe we will limit the ability of a small group of shareholders to unreasonably attempt
to block our ability to complete our initial business combination, particularly in connection with a business combination with
a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would
not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial
business combination.
Tendering
Share Certificates in Connection with a Tender Offer or Redemption Rights
We
may require our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their
shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in
the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the scheduled vote on
the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the
transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, rather
than simply voting against the initial business combination. The tender offer or proxy materials, as applicable, that we will
furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring
public shareholders to satisfy such delivery requirements. Accordingly, a public shareholder would have from the time we send
out our tender offer materials until the close of the tender offer period, or up to two business days prior to the scheduled vote
on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise
its redemption rights. Pursuant to the tender offer rules, the tender offer period will be not less than 20 business days and,
in the case of a shareholder vote, a final proxy statement would be mailed to public shareholders at least 10 days prior to the
shareholder vote. However, we expect that a draft proxy statement would be made available to such shareholders well in advance
of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Given
the relatively short exercise period, it is advisable for shareholders to use electronic delivery of their public shares.
There
is a nominal cost associated with the above-referenced 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 $80.00 and it would be up to the broker
whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not
we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of
exercising redemption rights regardless of the timing of when such delivery must be effectuated.
The
foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection
with their business combinations, many blank check companies would distribute proxy materials for the shareholders’ vote
on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on
the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the business combination was
approved, the company would contact such shareholder to arrange for him or her to deliver his or her certificate to verify ownership.
As a result, the shareholder then had an “option window” after the completion of the business combination during which
he or she could monitor the price of the company’s shares in the market. If the price rose above the redemption price, he
or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation.
As a result, the redemption rights, to which shareholders were aware they needed to commit before the shareholder meeting, would
become “option” rights surviving past the completion of the business combination until the redeeming holder delivered
its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s
election to redeem is irrevocable once the business combination is approved.
Any
request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials
or two business days prior to the scheduled date of the shareholder meeting set forth in our proxy materials, as applicable (unless
we elect to allow additional withdrawal rights). Furthermore, if a holder of a public share delivered its certificate in connection
with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights,
such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated
that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly
after the completion of our initial business combination.
If
our initial business combination is not approved or completed for any reason, then our public shareholders who elected to exercise
their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In
such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
We
may continue to try to complete a business combination until July 28, 2022.
Redemption
of Public Shares and Liquidation if No Business Combination
Our sponsor, directors
and officers have agreed that we will have until July 28, 2022 to complete our initial business combination. If we have not completed
our initial business combination within such period, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly
as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution
expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which
redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating
distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining
shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to
provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions
with respect to our warrants, which will expire worthless if we fail to complete our initial business combination by July 28, 2022.
Our initial shareholders have
entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account
with respect to their founder shares if we fail to complete our initial business combination within the Combination Period. However, if
our initial shareholders acquire public shares, they will be entitled to liquidating distributions from the trust account with respect
to such public shares if we fail to complete our initial business combination within the allotted time period.
Our
sponsor, directors and officers have agreed, pursuant to a written agreement with us, that they will not propose any amendment
to our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to
allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete
our initial business combination within the Combination Period or (B) with respect to any other provision relating to shareholders’
rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem
their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the
number of then issued and outstanding public shares. However, we may not redeem our public shares in an amount that would cause
our net tangible assets to be less than $5,000,001 following such redemptions.
We
expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors,
will be funded from amounts remaining out of the $1,000,000 of proceeds held outside the trust account, although we cannot assure
you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses
associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not
required to pay taxes, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest
to pay those costs and expenses.
If
we were to expend all of the net proceeds of our Initial Public Offering and the sale of the private placement warrants, other
than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account,
the per-share redemption amount received by shareholders upon our dissolution would be approximately $10.00. The proceeds deposited
in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims
of our public shareholders. We cannot assure you that the actual per-share redemption amount received by shareholders will not
be substantially less than $10.00. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient
to pay or provide for all creditors’ claims.
Although
we will seek to have all vendors, service providers (other than our independent auditors), prospective target businesses or other
entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to
any monies held in the trust account for the benefit of our public shareholders, there is no guarantee that they will execute
such agreements or even if they execute such agreements that they would 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 an advantage with respect to a claim against our assets,
including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies
held in the trust account, our management will perform an analysis of the alternatives available to it and will enter into an
agreement with a third party that has not executed a waiver only if management believes that such third party’s engagement
would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third
party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills
are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or
in cases where we are unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such
entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts
or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares,
if we are unable to complete our initial business combination within the prescribed time frame, or upon the exercise of a redemption
right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that
were not waived that may be brought against us within the 10 years following redemption. Our sponsor has agreed that it will be
liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products
sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount
of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the trust
account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net
of the amount of interest which may be withdrawn to pay taxes, 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 our indemnity of the underwriters
of our Initial Public Offering against certain liabilities, including liabilities under the Securities Act. In the event that
an executed waiver is deemed to be unenforceable against a third party, then our sponsor will not be responsible to the extent
of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy
its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor
may not be able to satisfy those obligations. None of our other officers will indemnify us for claims by third parties including,
without limitation, claims by vendors and prospective target businesses.
In
the event that the proceeds in the trust account are reduced below (1) $10.00 per public share or (2) such lesser amount per public
share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust
assets, in each case net of the amount of interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable
to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent
directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we
currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so
in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share
redemption price will not be substantially less than $10.00 per share.
We will seek to reduce the
possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service
providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements
with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be
liable as to any claims under our indemnity of the underwriters of our Initial Public Offering against certain liabilities, including
liabilities under the Securities Act. We have access to up to $1,000,000 from the proceeds of our Initial Public Offering and the sale
of the private placement warrants, with which to pay any such potential claims (including costs and expenses incurred in connection with
our liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently
determined that the reserve for claims and liabilities is insufficient, shareholders who received funds from our trust account could be
liable for claims made by creditors. Because our offering expenses were less than our estimate of $1,000,000, the amount of funds held
outside the trust account increased by $400,000 and were approximately $146,000 as of December 31, 2021.
If
we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not
dismissed, the proceeds held in the trust account could be subject to applicable insolvency law, and may be included in our insolvency
estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any insolvency
claims deplete the trust account, we cannot assure you we will be able to return $10.00 per share to our public shareholders.
Additionally, if we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against
us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or insolvency
laws as a voidable performance. As a result, a bankruptcy court could seek to recover some or all amounts received by our shareholders.
Furthermore, our board may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith,
and thereby exposing itself and our company to claims of punitive damages, by paying public shareholders from the trust account
prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our
public shareholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (1) our completion
of an initial business combination, and then only in connection with those Class A ordinary shares that such shareholder properly
elected to redeem, subject to the limitations described herein; (2) the redemption of any public shares properly submitted in
connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the
substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100%
of our public shares if we do not complete our initial business combination within the Combination Period or (B) with respect
to any other provision relating to shareholders’ rights or pre-initial business combination activity; and (3) the redemption
of our public shares if we have not completed an initial business combination within the Combination Period, subject to applicable
law. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. Holders of
warrants do not have any right to the proceeds held in the trust account with respect to the warrants.
Amended
and Restated Memorandum and Articles of Association
Our
amended and restated memorandum and articles of association contains certain requirements and restrictions that will apply to
us until the consummation of our initial business combination. Our amended and restated memorandum and articles of association
contains a provision which provides that, if we seek to amend our amended and restated memorandum and articles of association
(A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination
or to redeem 100% of our public shares if we do not complete our initial business combination within the Combination Period or
(B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, we
will provide public shareholders with the opportunity to redeem their public shares in connection with any such amendment. Specifically,
our amended and restated memorandum and articles of association provides, among other things, that:
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prior
to the consummation of our initial business combination, we shall either (1) seek shareholder approval of our initial business
combination at a meeting called for such purpose at which public shareholders may seek to redeem their public shares without
voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction, into their pro rata
share of the aggregate amount then on deposit in the trust account, calculated as of two business days prior to the completion
of our initial business combination, including interest (which interest shall be net of taxes payable), or (2) provide our
public shareholders with the opportunity to tender their public shares to us by means of a tender offer (and thereby avoid
the need for a shareholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the
trust account, calculated as of two business days prior to the completion of our initial business combination, including interest
(which interest shall be net of taxes payable), in each case subject to the limitations described herein; |
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in
no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001
following such redemptions |
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if
we seek shareholder approval, we will complete our initial business combination only if we receive an ordinary resolution
under Cayman Islands law, which requires the affirmative vote of holders of a majority of ordinary shares who attend and vote
at a general meeting of the company; |
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if
our initial business combination is not consummated within the Combination Period, then our existence will terminate and we
will distribute all amounts in the trust account; and |
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prior
to our initial business combination, we may not issue additional ordinary shares that would entitle the holders thereof to
(1) receive funds from the trust account or (2) vote as a class with our public shares on any initial business combination. |
These
provisions cannot be amended without the approval of holders of at least two-thirds of our ordinary shares who attend and vote
in a general meeting. In the event we seek shareholder approval in connection with our initial business combination, our amended
and restated memorandum and articles of association provides that we may consummate our initial business combination only if approved
by a majority of the ordinary shares voted by our shareholders at a duly held shareholders meeting.
Additionally,
our amended and restated memorandum and articles of association provides that, prior to our initial business combination, only
holders of our founder shares have the right to vote on the election of directors and that holders of a majority of our founder
shares may remove a member of the board of directors for any reason. These provisions of our amended and restated memorandum and
articles of association may only be amended by a special resolution passed by a majority of at least 90% of our ordinary shares
attending and voting in a general meeting. With respect to any other matter submitted to a vote of our shareholders, including
any vote in connection with our initial business combination, except as required by law, holders of our founder shares and holders
of our public shares will vote together as a single class, with each share entitling the holder to one vote.
Competition
We
face intense competition from other entities having a business objective similar to ours, including private investors (which may
be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing
for the types of businesses we intend to acquire. Many of these individuals and entities are well established and have extensive
experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services
to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge
than we do and our financial resources are relatively limited when contrasted with those of many of these competitors. While we
believe there are numerous target businesses we could potentially acquire, our ability to compete with respect to the acquisition
of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive
limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, in the event we seek
shareholder approval of our initial business combination and we are obligated to pay cash for our Class A ordinary shares, it
will potentially reduce the resources available to us for our initial business combination. Any of these obligations may place
us at a competitive disadvantage in successfully negotiating a business combination.
Conflicts
of Interest
All
of our officers and certain of our directors have fiduciary and contractual duties to either SCV or Hudson Bay and to certain
companies in which either of them has invested. These entities may compete with us for acquisition opportunities. If these entities
decide to pursue any such opportunity, we may be precluded from pursuing such opportunities. Subject to his or her fiduciary duties,
under Cayman Islands law, none of the members of our management team who are also employed by our sponsor or its affiliates have
any obligation to present us with any opportunity for a potential business combination of which they become aware. Our management
team, in their capacities as directors, officers or employees of our sponsor or its affiliates or in their other endeavors, may
choose to present potential business combinations to the related entities described above, current or future entities affiliated
with or managed by our sponsor, or third parties, before they present such opportunities to us, subject to his or her fiduciary
duties under Cayman Islands law and any other applicable fiduciary duties. Our amended and restated memorandum and articles of
association provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such
opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is
an opportunity that we are able to complete on a reasonable basis. For more information, see the section entitled “Management
— Conflicts of Interest.”
Many
of our directors and officers presently have, and any of them in the future may have, additional, fiduciary or contractual obligations
to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity
to such entity. Accordingly, if any of our directors or officers becomes aware of a business combination opportunity that is suitable
for an entity to which he or she has then-current fiduciary or contractual obligations, he or she may need to honor these fiduciary
or contractual obligations to present such business combination opportunity to such entity, subject to his or her fiduciary duties
under Cayman Islands law.
We
do not believe, however, that the fiduciary duties or contractual obligations of our directors or officers will materially affect
our ability to complete our initial business combination.
Indemnity
Our
sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors)
for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction
agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount per
public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of
the trust assets, in each case net of the interest which may be withdrawn to pay taxes, 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 our indemnity
of the underwriters of our Initial Public Offering against certain liabilities, including liabilities under the Securities Act.
Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible
to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient
funds to satisfy their indemnity obligations and believe that our sponsor’s only assets are securities of our company and,
therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations.
Employees
We
currently have three officers and do not intend to have any full-time employees prior to the completion of our initial business
combination. Members of our management team are not obligated to devote any specific number of hours to our matters but they intend
to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination.
The amount of time that any such person will devote in any time period will vary based on whether a target business has been selected
for our initial business combination and the current stage of the business combination process.
Periodic
Reporting and Financial Information
We
have registered our units, Class A ordinary shares and warrants under the Exchange Act and have reporting obligations, including
the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange
Act, our annual reports, including this Annual Report on Form 10-K, will contain financial statements audited and reported on
by our independent registered public auditors.
We
will provide shareholders with audited financial statements of the prospective target business as part of the tender offer materials
or proxy solicitation materials sent to shareholders to assist them in assessing the target business. These financial statements
may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United
States of America (“U.S. GAAP”), or international financing reporting standards as issued by the International Accounting
Standards Board (“IFRS”), depending on the circumstances and the historical financial statements may be required to
be audited in accordance with Public Company Accounting Oversight Board (United States) (“PCAOB”) standards. These
financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be
unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy
rules and complete our initial business combination within the prescribed time frame. While this may limit the pool of potential
business combination candidates, we do not believe that this limitation will be material.
We are required to evaluate
our internal control procedures for the fiscal year ending December 31, 2021 as required by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”). Only in the event we are deemed to be a large-accelerated filer or an accelerated filer, and no longer qualify as an emerging
growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal
control over financial reporting. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy
of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley
Act may increase the time and costs necessary to complete any such acquisition.
We
filed a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange
Act. As a result, we are subject to the rules and regulations promulgated under the Exchange Act. We have no current intention
of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation
of our initial business combination.
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As
such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other
public companies that are not “emerging growth companies” including, but not limited to, not being required to comply
with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory
vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors
find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of
our securities may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards
would otherwise apply to private companies. We have taken advantage of the benefits of this extended transition period.
We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary
of the completion of our Initial Public Offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or
(c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that is held by
non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter, and (2) the date on which we have
issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging
growth company” shall have the meaning associated with it in the JOBS Act.
Additionally,
we are a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may
take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial
statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of
our ordinary shares held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (2)
our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by
non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter.
Item
1A. Risk Factors.
Our
business is subject to numerous risks and uncertainties, including those highlighted in this “Risk Factors” section,
that represent challenges that we face in connection with the successful implementation of our strategy. The occurrence of one
or more of the events or circumstances described in this “Risk Factors” section, alone or in combination with other
events or circumstances, may adversely affect our ability to effect a business combination, and may have an adverse effect on
our business, cash flows, financial condition and results of operations. Such risks include, but are not limited to:
Summary
of Risk Factors
| |
● |
Our
lack of operating history; |
| |
● |
Doubt
about our ability to continue as a “going concern”; |
| |
● |
Our
public shareholders may not be afforded an opportunity to vote on our proposed business combination; |
| |
● |
The
substantial influence of our initial shareholders, directors and officers on actions requiring a shareholder vote; |
| |
● |
Our
limited resources and intense competition for acquisition targets; |
| |
● |
The
impact of redemptions on our ability to effect a business combination; |
| |
● |
Limitations
on the ability of shareholders to redeem shares in excess of 15% of our Class A ordinary shares in certain circumstances; |
| |
● |
The
requirement that we complete our initial business combination within the prescribed time frame; |
| |
● |
Shareholders
may receive less than $10 for their shares in certain circumstances, or warrants may expire worthless; |
| |
● |
Our units, Class A ordinary shares and warrants
have been delisted and are not listed on any other national securities exchange, which may negatively impact the price of our securities
and the levels of liquidity available to our shareholders, and make it more difficult for us to consummate an initial business combination; |
| |
● |
Investors
are not entitled to protections normally afforded to investors of other blank check companies; |
| |
● |
Our
directors may decide not to enforce the indemnification obligations of our sponsor; |
| |
● |
We
may seek acquisition opportunities outside our management’s area of expertise or with a target that does not our criteria
and guidelines; |
| |
● |
We
may seek acquisition opportunities with an early stage company, a financially unstable business or an entity lacking an established
record of revenue or earnings, or a private company for which limited information is available; |
| |
● |
We
are not required to obtain an opinion from an independent investment banking firm or from an independent accounting firm regarding
fairness; |
| |
● |
We
may issue additional Class A ordinary shares or preferred shares that would dilute the interest of our shareholders; |
| |
● |
We
may be a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S. investors; |
| |
● |
We
may reincorporate in another jurisdiction in connection with our initial business combination; |
| |
● |
Resources
could be wasted in researching acquisitions that are not completed; |
| |
● |
Our
dependence upon our directors and officers and certain key personnel at a target; |
| |
● |
Potential
conflicts of interest with our directors, officers and initial shareholders; |
| |
● |
The
potential that we may issue notes or other debt securities, or otherwise incur substantial debt; |
| |
● |
Our
dependence on a single business which may have a limited number of products or services; |
| |
● |
Our
inability to maintain control of a target business after our initial business combination; |
| |
● |
Our
lack of a specified maximum redemption threshold; |
| |
● |
Certain
provisions of our amended and restated memorandum and articles of association and the potential that we may amend our governing
instruments in a manner that will make it easier for us to complete our initial business combination; |
| |
● |
Our
inability to obtain additional financing; |
| |
● |
The
effect of our warrants and founder shares on the market price of our Class A ordinary shares; |
| |
● |
Failure
to complete a business combination due to the requirement to furnish shareholders with target business financial statements; |
| |
● |
Certain
exemptions due to our status as emerging growth company and a smaller reporting company; |
| |
● |
Compliance
obligations required under the Sarbanes-Oxley Act; |
| |
● |
Our
incorporation under the laws of the Cayman Islands; |
| |
● |
Costs
associated with a potential target with operations outside the United States; |
| |
● |
The
time and resources required for target management to become familiar with U.S. securities laws; |
| |
● |
Economic,
political, social and government policies, developments and conditions; |
| |
● |
Exchange
rate fluctuations and currency policies; |
| |
● |
Risks
related to companies in the technology industries; |
| |
● |
The
impact of the coronavirus (COVID-19) outbreak; and |
| |
● |
We have
identified a material weakness in our internal control over financial reporting, which could continue to adversely affect our ability
to report our results of operations and financial condition accurately and in a timely manner. |
Risks Relating
to our Securities and Our Search for a Business Combination
We
are a recently incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our
ability to achieve our business objective.
We
are a recently incorporated Cayman Islands exempted company with no operating results, and we will not commence operations until
we complete a business combination. Because we lack an operating history, you have no basis upon which to evaluate our ability
to achieve our business objective of completing our initial business combination with one or more target businesses. We may be
unable to complete our initial business combination. If we fail to complete our initial business combination, we will never generate
any operating revenues.
Our
independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt
about our ability to continue as a “going concern.”
As of December 31, 2021, we
had approximately $146,000 in cash and working capital deficit of approximately $2.8 million. We have incurred and expect to continue
to incur significant costs in pursuit of our acquisition plans. Management’s plans to address this need for capital are discussed
in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our plans
to raise capital and to consummate our initial business combination may not be successful. These factors, among others, raise substantial
doubt about our ability to continue as a going concern. The financial statements contained elsewhere in this Annual Report on Form 10-K
do not include any adjustments that might result from our inability to continue as a going concern.
Our
public shareholders may not be afforded an opportunity to vote on our proposed business combination, which means we may complete
our initial business combination even though a majority of our public shareholders do not support such a combination.
We
may not hold a shareholder vote to approve our initial business combination unless the business combination would require shareholder
approval under applicable law or stock exchange rules or if we decide to hold a shareholder vote for business or other reasons. However,
except as required by applicable law or stock exchange rules, the decision as to whether we will seek shareholder approval of a proposed
business combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion,
and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise
require us to seek shareholder approval. Accordingly, we may consummate our initial business combination even if holders of a majority
of the issued and outstanding ordinary shares do not approve of the business combination we consummate. Please see the section entitled
“Business — Shareholders May Not Have the Ability to Approve Our Business Combination” for additional information.
If we seek shareholder approval of our initial
business combination, our initial shareholders, directors and officers have agreed to vote in favor of such initial business combination,
regardless of how our public shareholders vote, and such shares currently constitute a majority of our outstanding ordinary shares.
Unlike many other blank check
companies in which the initial shareholders agree to vote their founder shares in accordance with the majority of the votes cast by the
public shareholders in connection with an initial business combination, our initial shareholders, directors and officers have agreed (and
their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote their founder shares
and any public shares held by them in favor of our initial business combination. As a result, because the founder shares currently constitute
a majority of our outstanding ordinary shares following the redemptions associated with our January 25, 2022 Extraordinary General Meeting,
we would not need any of the public shares sold in our Initial Public Offering to be voted in favor of the transaction in order to have
such initial business combination approved. Our initial shareholders, directors and officers have also entered into the letter agreement,
imposing similar obligations on them with respect to public shares acquired by them, if any. It is likely that our initial shareholders
and their permitted transferees will own a majority of our issued and outstanding ordinary shares at the time of any such shareholder
vote. Accordingly, if we seek shareholder approval of our initial business combination, it is more likely that the necessary shareholder
approval will be received than would be the case if such persons agreed to vote their founder shares in accordance with the majority of
the votes cast by our public shareholders.
Your
only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise
of your right to redeem your shares from us for cash, unless we seek shareholder approval of such business combination.
At
the time of your investment in us, you were not provided with an opportunity to evaluate the specific merits or risks of any target
businesses. Additionally, since our board of directors may complete a business combination without seeking shareholder approval,
public shareholders may not have the right or opportunity to vote on the business combination, unless we seek such shareholder
approval. Accordingly, if we do not seek shareholder approval, your only opportunity to affect the investment decision regarding
a potential business combination may be limited to exercising your redemption rights within the period of time (which will be
at least 20 business days) set forth in our tender offer documents mailed to our public shareholders in which we describe our
initial business combination.
The
ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential
business combination targets, which may make it difficult for us to enter into a business combination with a target.
We
may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition
that we have a minimum net worth or a certain amount of cash. If too many public shareholders exercise their redemption rights,
we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination.
The amount of the deferred underwriting commissions payable to the underwriters in our Initial Public Offering will not be adjusted
for any shares that are redeemed in connection with a business combination and such amount of deferred underwriting commissions
is not available for us to use as consideration in an initial business combination. If we are able to consummate an initial business
combination, the per-share value of shares held by non-redeeming shareholders will reflect our obligation to pay and the payment
of the deferred underwriting commissions. Furthermore, in no event will we redeem our public shares in an amount that would cause
our net tangible assets to be less than $5,000,001 following such redemptions, or any greater net tangible asset or cash requirement
that may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted
redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy
a closing condition as described above, we would not proceed with such redemption and the related business combination and may
instead search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant
to enter into a business combination transaction with us.
The
ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us
to complete the most desirable business combination or optimize our capital structure.
At
the time we enter into an agreement for our initial business combination, we will not know how many shareholders may exercise
their redemption rights and, therefore, we will need to structure the transaction based on our expectations as to the number of
shares that will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the
cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need
to reserve a portion of the cash in the trust account to meet such requirements, or arrange for third-party financing. In addition,
if a larger number of shares is submitted for redemption than we initially expected, we may need to restructure the transaction
to reserve a greater portion of the cash in the trust account or arrange for third-party financing. Raising additional third-party
financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations
may limit our ability to complete the most desirable business combination available to us or optimize our capital structure.
The
ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the
probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order
to redeem your shares.
If
our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price,
or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful
increases. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account
until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your shares in the
open market; however, at such time our shares may trade at a discount to the pro rata amount per share in the trust account. In
either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our
redemption until we liquidate or you are able to sell your shares in the open market.
The
requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses
leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential
business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete
our initial business combination on terms that would produce value for our shareholders.
Any
potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete
our initial business combination within the Combination Period. Consequently, such target business may obtain leverage over us in negotiating
a business combination, knowing that if we do not complete our initial business combination with that particular target business, we
may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to July
28, 2022. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms
that we would have rejected upon a more comprehensive investigation.
We
may not be able to complete our initial business combination within the prescribed time frame, in which case we would cease all
operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public
shareholders may receive only $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire
worthless.
Our
sponsor, directors and officers have agreed that we must complete our initial business combination within the Combination Period.
We may not be able to find a suitable target business and complete our initial business combination within such time period. Our
ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the
capital and debt markets and the other risks described herein.
If
we have not completed our initial business combination within such time period, we will: (1) cease all operations except for the
purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public
shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest
(less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the
number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights
as shareholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably
possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, dissolve
and liquidate, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements
of other applicable law. In such case, our public shareholders may receive only $10.00 per share, or less than $10.00 per share,
on the redemption of their shares, and our warrants will expire worthless. See “— If third parties bring claims against
us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be
less than $10.00 per share” and other risk factors herein.
If
we seek shareholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of their affiliates
may elect to purchase shares or warrants from public shareholders, which may influence a vote on a proposed business combination
and reduce the public “float” of our securities.
If
we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their affiliates
may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following
the completion of our initial business combination. Any such price per share may be different than the amount per share a public
shareholder would receive if it elected to redeem its shares in connection with our initial business combination. Additionally,
at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to
material nonpublic information), our sponsor, directors, officers, advisors or any of their affiliates may enter into transactions
with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial
business combination or not redeem their public shares. However, our sponsor, directors, officers, advisors or any of their affiliates
are under no obligation or duty to do so. The purpose of such purchases could be to vote such shares in favor of our initial business
combination and thereby increase the likelihood of obtaining shareholder approval of our initial business combination or to satisfy
a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at
the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose
of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants
on any matters submitted to the warrant holders for approval in connection with our initial business combination. This may result
in the completion of our initial business combination that may not otherwise have been possible.
In
addition, if such purchases are made, the public “float” of our securities and the number of beneficial holders of
our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities
on a national securities exchange.
If
a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination,
or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We
will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial
business combination. Despite our compliance with these rules, if a shareholder fails to receive our tender offer or proxy materials,
as applicable, such shareholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents
or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business
combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares.
In the event that a shareholder fails to comply with these procedures, its shares may not be redeemed. See “Business —
Tendering Share Certificates in Connection with a Tender Offer or Redemption Rights.”
You
will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate
your investment, therefore, you may be forced to sell your public shares and/or warrants, potentially at a loss.
Our
public shareholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (1) our completion
of an initial business combination, and then only in connection with those Class A ordinary shares that such shareholder properly
elected to redeem, subject to certain limitations; (2) the redemption of any public shares properly submitted in connection with
a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing
of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares
if we do not complete our initial business combination within the Combination Period or (B) with respect to any other provision
relating to shareholders’ rights or pre-initial business combination activity; and (3) the redemption of our public shares
if we have not completed an initial business combination within the Combination Period, subject to applicable law. In no other
circumstances will a shareholder have any right or interest of any kind to or in the trust account. Holders of warrants will not
have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment,
you may be forced to sell your public shares and/or warrants, potentially at a loss.
Our units, Class
A ordinary shares and warrants have been delisted and are not currently listed on any other national securities exchange, which may negatively
impact the price of our securities and the levels of liquidity available to our shareholders and make it more difficult for us to consummate
an initial business combination.
Our securities were suspended
from trading on the New York Stock Exchange, or NYSE, following market close on March 8, 2022, were subsequently delisted, and are not
currently trading on any national securities exchange.
We are not planning to relist
our securities on NYSE or any other exchange at this time, and this may negatively impact the price of our securities and the levels of
liquidity available to our shareholders. In addition, target businesses may be unwilling to consummate an initial business combination
with us as a result, or we may not be able to complete any initial business combination within the Combination Period if target businesses
require us to obtain a new listing prior to or in connection with any transaction. Further, if we do enter into an agreement with a target
for an initial business combination, our lack of current listing may cause us to experience significant levels of redemptions in connection
with any such shareholder vote.
You
are not entitled to protections normally afforded to investors of many other blank check companies.
We
may be deemed to be a “blank check” company under the U.S. securities laws. However, because we have net tangible
assets in excess of $5,000,001 and filed a Current Report on Form 8-K, including an audited balance sheet of the Company demonstrating
this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly,
investors are not afforded the benefits or protections of those rules. Among other things, this means our units were immediately
tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule
419. Moreover, if we were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the
trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an
initial business combination.
If
we seek shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer
rules, and if you or a “group” of shareholders are deemed to hold in excess of 15% of our Class A ordinary shares,
you will lose the ability to redeem all such shares in excess of 15% of our Class A ordinary shares.
If
we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provides
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 redeeming its
shares with respect to the Excess Shares without our prior consent. However, we would not be restricting our shareholders’
ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Your inability
to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could
suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will
not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as
a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required
to sell your shares in open market transactions, potentially at a loss.
Because
of our limited resources and the significant competition for business combination opportunities, it may be more difficult for
us to complete our initial business combination. If we are unable to complete our initial business combination, our public shareholders
may receive only approximately $10.00 per share, or less in certain circumstances, on our redemption of their shares, and our
warrants will expire worthless.
We have encountered and expect
to continue to encounter intense competition from other entities having a business objective similar to ours, including private investors
(which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing
for the types of businesses we intend to acquire. Many of these individuals and entities are well established and have extensive experience
in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries.
Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial
resources are relatively limited when contrasted with those of many of these competitors. In addition, nearly all of the blank check companies
we compete with will have existing stock exchange listings, which would likely put them at a competitive advantage over us. While we believe
there are numerous target businesses we could potentially acquire with the remaining net proceeds of our Initial Public Offering and the
sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable
will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition
of certain target businesses. Furthermore, in the event we seek shareholder approval of our initial business combination and we are obligated
to pay cash for our Class A ordinary shares, it will potentially reduce the resources available to us for our initial business combination.
Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. If we are unable
to complete our initial business combination, our public shareholders may receive only approximately $10.00 per share, or less in certain
circumstances, on the liquidation of our trust account and our warrants will expire worthless. See “— If third parties bring
claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders
may be less than $10.00 per share” and other risk factors herein.
If the funds not being held in the trust
account are insufficient to allow us to operate until July 28, 2022, we may be unable to complete our initial business combination.
The funds available to us
outside of the trust account may not be sufficient to allow us to operate until July 28, 2022, assuming that our initial business combination
is not completed during that time. We have incurred and expect to continue to incur significant costs in pursuit of our acquisition plans.
Management’s plans to address this need for capital are discussed in the section titled “Management’s Discussion and
Analysis of Financial Condition and Results of Operations.” However, our affiliates are not obligated to make loans to us in the
future, and we may not be able to raise additional financing from unaffiliated parties necessary to fund our expenses. Any such event
in the future may negatively impact the analysis regarding our ability to continue as a going concern at such time.
We believe that the funds
available to us outside of the trust account are sufficient to allow us to operate until July 28, 2022; however, we cannot assure you
that our estimate is accurate. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants
to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop”
provision (a provision in letters of intent designed to keep target businesses from “shopping” around for transactions with
other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination.
If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently
required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching
for, or conduct due diligence with respect to, a target business. If we are unable to complete our initial business combination, our public
shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account
and our warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account
could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per share” and other risk
factors herein.
If the remaining net proceeds of our Initial
Public Offering and the sale of the private placement warrants not being held in the trust account are insufficient, it could limit the
amount available to fund our search for a target business or businesses and complete our initial business combination and we may depend
on loans from our sponsor or management team to fund our search, to pay our taxes and to complete our initial business combination.
Of the net proceeds of our
Initial Public Offering and the sale of the private placement warrants remaining following the redemptions in connection with our Extraordinary
General Meeting, only approximately $146,000 is available to us as of December 31, 2021 outside the trust account to fund our working
capital requirements. If we are required to seek additional capital, we would need to borrow funds from our sponsor, management team or
other third parties to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor any of their affiliates
is under any obligation to loan funds to, or otherwise invest in, us in such circumstances. Any such loans may be repaid only from funds
held outside the trust account or from funds released to us upon completion of our initial business combination. If we are unable to complete
our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate
the trust account. In such case, our public shareholders may receive only $10.00 per share, or less in certain circumstances, and our
warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could
be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per share” and other risk factors
herein.
Subsequent
to our completion of our initial business combination, we may be required to subsequently take write-downs or write-offs, restructuring
and impairment or other charges that could have a significant negative effect on our financial condition, results of operations
and the price of our securities, which could cause you to lose some or all of your investment.
Even
if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will
identify all material issues that may be present with a particular target business that it would be possible to uncover all material
issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control
will not later arise. As a result of these factors, we may be forced to later write down or write off assets, restructure our
operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully
identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with
our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity,
the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In
addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of
assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly,
any shareholder or warrant holder who chooses to remain a shareholder or warrant holder following our initial business combination
could suffer a reduction in the value of their securities. Such shareholders and warrant holders are unlikely to have a remedy
for such reduction in value.
If
third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount
received by shareholders may be less than $10.00 per share.
Our
placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to
have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with
which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held
in the trust account for the benefit of our public 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 our assets, including the funds held in
the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account,
our management will perform an analysis of the alternatives available to it and will enter into an agreement with a third party
that has not executed a waiver only if management believes that such third party’s engagement would be significantly more
beneficial to us than any alternative.
Examples
of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party
consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants
that would agree to execute a waiver or in cases where we are unable to find a service provider willing to execute a waiver. In
addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of,
or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for
any reason. Upon redemption of our public shares, if we are unable to complete our initial business combination within the prescribed
timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we will be required
to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following
redemption. Accordingly, the per-share redemption amount received by public shareholders could be less than the $10.00 per share
initially held in the trust account, due to claims of such creditors.
Our
sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors)
for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction
agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount per
public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of
the trust assets, in each case net of the interest which may be withdrawn to pay taxes, 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 our indemnity
of the underwriters of our Initial Public Offering against certain liabilities, including liabilities under the Securities Act.
Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible
to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient
funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our Company. Our
sponsor may not have sufficient funds available to satisfy those obligations. We have not asked our sponsor to reserve for such
obligations, and therefore, no funds are currently set aside to cover any such obligations. As a result, if any such claims were
successfully made against the trust account, the funds available for our initial business combination and redemptions could be
reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination,
and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our directors
or officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target
businesses.
Our
directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of
funds in the trust account available for distribution to our public shareholders.
In
the event that the proceeds in the trust account are reduced below the lesser of (1) $10.00 per public share or (2) such lesser
amount per share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value
of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and our sponsor asserts that it is
unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent
directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we
currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so
in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of
funds in the trust account available for distribution to our public shareholders may be reduced below $10.00 per share.
If,
after we distribute the proceeds in the trust account to our public shareholders, we file a winding-up or bankruptcy petition
or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to
recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our
creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.
If,
after we distribute the proceeds in the trust account to our public shareholders, we file a winding-up or bankruptcy petition
or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, any distributions received by shareholders
could be viewed under applicable debtor/creditor and/or insolvency laws as a voidable performance. As a result, a liquidator could
seek to recover some or all amounts received by our shareholders. In addition, our board of directors may be viewed as having
breached its fiduciary duty to our creditors and/or having acted in bad faith by paying public shareholders from the trust account
prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages.
If,
before distributing the proceeds in the trust account to our public shareholders, we file a winding-up or bankruptcy petition
or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such
proceeding may have priority over the claims of our shareholders and the per-share amount that would otherwise be received by
our shareholders in connection with our liquidation may be reduced.
If,
before distributing the proceeds in the trust account to our public shareholders, we file a winding-up or bankruptcy petition
or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust
account could be subject to applicable insolvency law, and may be included in our liquidation estate and subject to the claims
of third parties with priority over the claims of our shareholders. To the extent any liquidation claims deplete the trust account,
the per-share amount that would otherwise be received by our shareholders in connection with our liquidation would be reduced.
We have identified a material weakness
in our internal control over financial reporting. This material weakness could continue to adversely affect our ability to report our
results of operations and financial condition accurately and in a timely manner.
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with U.S. GAAP. Our management is likewise required, on a quarterly basis, to evaluate the effectiveness
of our internal controls and to disclose any changes and material weaknesses identified through such evaluation in those internal
controls. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting,
such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not
be prevented or detected on a timely basis.
As
described elsewhere in this Annual Report, we identified a material weakness in our internal control over financial reporting
related to the accounting for a significant and unusual transaction related to the Warrants. As a result of this material weakness,
our management concluded that our internal control over financial reporting was not effective as of December 31, 2020. This material
weakness resulted in a material misstatement of our warrant liabilities, change in fair value of warrant liabilities, additional
paid-in capital, accumulated deficit and related financial disclosures for the Affected Periods.
To
respond to this material weakness, we have devoted, and plan to continue to devote, significant effort and resources to the remediation
and improvement of our internal control over financial reporting. While we have processes to identify and appropriately apply
applicable accounting requirements, we plan to enhance these processes to better evaluate our research and understanding of the
nuances of the complex accounting standards that apply to our financial statements. Our plans at this time include providing enhanced
access to accounting literature, research materials and documents and increased communication among our personnel and third-party
professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be
accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects. For a
discussion of management’s consideration of the material weakness identified related to our accounting for a significant
and unusual transaction related to the Warrants, see Part II, Item 9A: Controls and Procedures included in this Annual Report.
Any
failure to maintain such internal control could adversely impact our ability to report our financial position and results from
operations on a timely and accurate basis. If our financial statements are not accurate, investors may not have a complete understanding
of our operations. Likewise, if our financial statements are not filed on a timely basis, we could be subject to sanctions or
investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities. In either case,
there could be a material adverse effect on our business. Ineffective internal controls could also cause investors to lose confidence
in our reported financial information, which could have a negative effect on the trading price of our stock.
We can give no assurance
that the measures we have taken and plan to take in the future will remediate the material weakness identified or that any additional
material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate
internal control over financial reporting or circumvention of these controls. In addition, even if we are successful in strengthening
our controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or
errors or to facilitate the fair presentation of our financial statements.
If
we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance
requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If
we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
| |
● |
restrictions
on the nature of our investments; and |
| |
● |
restrictions
on the issuance of securities; |
each
of which may make it difficult for us to complete our initial business combination.
In
addition, we may have imposed upon us burdensome requirements, including:
| |
● |
registration
as an investment company with the SEC; |
| |
● |
adoption
of a specific form of corporate structure; and |
| |
● |
reporting,
record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject
to. |
We
do not believe that our principal activities subject us to the Investment Company Act. The proceeds held in the trust account
may be invested by the trustee only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds
investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. Because the
investment of the proceeds is restricted to these instruments, we believe we meet the requirements for the exemption provided
in Rule 3a-1 promulgated under the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance
with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder
our ability to complete a business combination. If we are unable to complete our initial business combination, our public shareholders
may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and
our warrants will expire worthless.
Changes
in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our
ability to negotiate and complete our initial business combination, and results of operations.
We
are subject to laws and regulations enacted by national, regional and local governments. In particular, we are required to comply with
certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time
consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those
changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply
with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our
ability to negotiate and complete our initial business combination, and results of operations.
If we have not completed our initial business
combination within the Combination Period, our public shareholders may be forced to wait beyond July 28, 2022 before redemption from our
trust account.
If we have not completed our
initial business combination within the Combination Period, we will distribute the aggregate amount then on deposit in the trust account,
including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), pro
rata to our public shareholders by way of redemption and cease all operations except for the purposes of winding up of our affairs. Any
redemption of public shareholders from the trust account shall be effected automatically by function of our amended and restated memorandum
and articles of association prior to any voluntary winding up. If we are required to windup, liquidate the trust account and distribute
such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution
must comply with the applicable provisions of the Companies Law. In that case, investors may be forced to wait beyond July 28, 2022 before
the redemption proceeds of our trust account become available to them and they receive the return of their pro rata portion of the proceeds
from our trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless,
prior thereto, we consummate our initial business combination or amend certain provisions of our amended and restated memorandum and articles
of association and then only in cases where investors have properly sought to redeem their Class A ordinary shares. Only upon our redemption
or any liquidation will public shareholders be entitled to distributions if we are unable to complete our initial business combination
and do not amend certain provisions of our amended and restated memorandum and articles of association prior thereto.
Our
shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption
of their shares.
If
we are 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, we were unable to pay our debts
as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received
by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors
and/or may have acted in bad faith, and thereby exposing themselves and our company to claims, by paying public shareholders from
the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us
for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted any distribution to be
paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business
would be guilty of an offence and may be liable to a fine of up to approximately $18,300 and to imprisonment for five years in
the Cayman Islands.
We
may not hold an annual general meeting of shareholders until after the consummation of our initial business combination. Our public
shareholders may not have the right to elect or remove directors prior to the consummation of our initial business combination.
There is no requirement under
the Companies Law for us to hold annual or general meetings to elect directors. Until we hold an annual general meeting of shareholders,
public shareholders may not be afforded the opportunity to discuss company affairs with management. In addition, as holders of our Class
A ordinary shares, our public shareholders do not have the right to vote on the election of directors prior to consummation of our initial
business combination. In addition, holders of a majority of our founder shares may remove a member of the board of directors for any reason.
We
have not registered the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities
laws, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from
being able to exercise its warrants except on a cashless basis and potentially causing such warrants to expire worthless.
We
have not registered the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities
laws. However, under the terms of the warrant agreement, we have agreed that, as soon as practicable, but in no event later than
15 business days after the closing of our initial business combination, we will use our reasonable best efforts to file with the
SEC a registration statement covering the issuance of such shares, and we will use our reasonable best efforts to cause the same
to become effective within 60 business days after the closing of our initial business combination and to maintain the effectiveness
of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or
are redeemed. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a
fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained
or incorporated by reference therein are not current, complete or correct or the SEC issues a stop order. If the shares issuable
upon exercise of the warrants are not registered under the Securities Act in accordance with the above requirements, we will be
required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or
on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the
issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising
holder, or an exemption from registration is available. Notwithstanding the above, if our Class A ordinary shares are at the time
of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered
security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise
their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the
event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our reasonable
best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In
no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants
in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities laws
and no exemption is available. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or
exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such
warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units
will have paid the full unit purchase price solely for the Class A ordinary shares included in the units. There may be a circumstance
where an exemption from registration exists for holders of our private placement warrants to exercise their warrants while a corresponding
exemption does not exist for holders of the public warrants included as part of units. In such an instance, our sponsor and its
permitted transferees (which may include our directors and executive officers) would be able to exercise their warrants and sell
the ordinary shares underlying their warrants while holders of our public warrants would not be able to exercise their warrants
and sell the underlying ordinary shares. If and when the warrants become redeemable by us, we may exercise our redemption right
even if we are unable to register or qualify the underlying Class A ordinary shares for sale under all applicable state securities
laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise their warrants.
The
grant of registration rights to our initial shareholders and their permitted transferees may make it more difficult to complete
our initial business combination, and the future exercise of such rights may adversely affect the market price of our Class A
ordinary shares.
Our
initial shareholders and their permitted transferees can demand that we register the resale of their founder shares after those
shares convert to our Class A ordinary shares at the time of our initial business combination. In addition, our sponsor and its
permitted transferees can demand that we register the resale of the private placement warrants and the Class A ordinary shares
issuable upon exercise of the private placement warrants, and holders of warrants that may be issued upon conversion of working
capital loans may demand that we register the resale of such warrants or the Class A ordinary shares issuable upon exercise of
such warrants. We will bear the cost of registering these securities. The registration and availability of such a significant
number of securities for trading in the public market may have an adverse effect on the market price of our Class A ordinary shares.
In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude.
This is because the shareholders of the target business may increase the equity stake they seek in the combined entity or ask
for more cash consideration to offset the negative impact on the market price of our Class A ordinary shares that is expected
when the ordinary shares owned by our initial shareholders or their permitted transferees, our private placement warrants or warrants
issued in connection with working capital loans are registered for resale.
Because
we are not limited to a particular industry or any specific target businesses with which to pursue our initial business combination,
you will be unable to ascertain the merits or risks of any particular target business’s operations.
Although we expect to focus
our search for a target business in the cybersecurity industry globally, we may seek to complete a business combination with an operating
company of any size (subject to our satisfaction of the 80% of net assets test) and in any industry, sector or geography. However, we
are not, under our amended and restated memorandum and articles of association, permitted to effectuate our initial business combination
solely with another blank check company or similar company with nominal operations. Because we have not yet reached a definitive agreement
with any specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of
any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects. To
the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations with
which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales
or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or development stage entity.
Although our directors and officers will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you
that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence.
Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those
risks will adversely impact a target business. We also cannot assure you that an investment in our units will not ultimately prove to
be less favorable to our investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly,
any shareholder or warrant holder who chooses to remain a shareholder or warrant holder, respectively, following our initial business
combination could suffer a reduction in the value of their securities. Such shareholders and warrant holders are unlikely to have a remedy
for such reduction in value.
Past
performance by our management team and their affiliates may not be indicative of future performance of an investment in the Company.
Past
performance by our management team and their affiliates, including SCV and Hudson Bay, is not a guarantee either (1) that we will
be able to identify a suitable candidate for our initial business combination or (2) of success with respect to any business combination
we may consummate. You should not rely on the historical record of our management team or their affiliates, including SCV and
Hudson Bay, or any related investment’s performance as indicative of our future performance of an investment in the Company
or the returns the Company will, or is likely to, generate going forward.
We
may seek acquisition opportunities outside the cybersecurity sector, which may be outside by our management’s area of expertise.
We
will consider a business combination outside the cybersecurity sector, which may be outside of our management’s areas of
expertise, if a business combination candidate is presented to us and we determine that such candidate offers an attractive acquisition
opportunity for our Company. In the event we elect to pursue an acquisition outside of the areas of our management’s expertise,
our management’s expertise may not be directly applicable to its evaluation or operation, and the areas of our management’s
expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may
not be able to adequately ascertain or assess all of the significant risk factors relevant to such acquisition. Accordingly, any
shareholder or warrant holder who chooses to remain a shareholder or warrant holder, respectively, following our initial business
combination could suffer a reduction in the value of their securities. Such shareholders and warrant holders are unlikely to have
a remedy for such reduction in value.
Although
we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses,
we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result,
the target business with which we enter into our initial business combination may not have attributes entirely consistent with
our general criteria and guidelines.
Although
we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target
business with which we enter into our initial business combination will not have all of these positive attributes. If we complete
our initial business combination with a target that does not meet some or all of these criteria and guidelines, such combination
may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition,
if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater
number of shareholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition
with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if shareholder approval
of the transaction is required by applicable law or stock exchange listing requirements, or we decide to obtain shareholder approval
for business or other reasons, it may be more difficult for us to attain shareholder approval of our initial business combination
if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination,
our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation
of our trust account and our warrants will expire worthless.
We
may seek acquisition opportunities with an early stage company, a financially unstable business or an entity lacking an established
record of revenue or earnings.
To
the extent we complete our initial business combination with an early stage company, a financially unstable business or an entity
lacking an established record of sales or earnings, we may be affected by numerous risks inherent in the operations of the business
with which we combine. These risks include investing in a business without a proven business model and with limited historical
financial data, volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel.
Although our directors and officers will endeavor to evaluate the risks inherent in a particular target business, we may not be
able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence.
Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that
those risks will adversely impact a target business.
We
are not required to obtain an opinion from an independent investment banking firm or from an independent accounting firm regarding
fairness. Consequently, you may have no assurance from an independent source that the price we are paying for the business is
fair to our company from a financial point of view.
Unless
we complete our initial business combination with an affiliated entity, we are not required to obtain an opinion that the price
we are paying is fair to our company from a financial point of view. If no opinion is obtained, our shareholders will be relying
on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial
community. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable,
related to our initial business combination.
We
may issue additional Class A ordinary shares or preferred shares to complete our initial business combination or under an employee
incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares upon the conversion
of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result
of the anti-dilution provisions contained in our amended and restated memorandum and articles of association. Any such issuances
would dilute the interest of our shareholders and likely present other risks.
Our amended and restated memorandum and articles of association authorizes
the issuance of up to 200,000,000 Class A ordinary shares, par value $0.0001 per share, 20,000,000 Class B ordinary shares, par value
$0.0001 per share, and 1,000,000 undesignated preferred shares, par value $0.0001 per share. As of April 28, 2022, there are 177,000,000
and 14,250,000 authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance, which
amount takes into account shares reserved for issuance upon exercise of outstanding warrants but not upon conversion of the Class B ordinary
shares. Class B ordinary shares are convertible into Class A ordinary shares, initially at a one-for-one ratio but subject to adjustment.
As of April 28, 2022, there are no preferred shares issued or outstanding.
We
may issue a substantial number of additional Class A ordinary shares, and may issue preferred shares, in order to complete our initial
business combination or under an employee incentive plan after completion of our initial business combination. We may also issue Class
A ordinary shares upon conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business
combination as a result of the anti-dilution provisions contained in our amended and restated memorandum and articles of association.
However, our amended and restated memorandum and articles of association provides, among other things, that prior to our initial business
combination, we may not issue additional ordinary shares that would entitle the holders thereof to (1) receive funds from the trust account
or (2) vote as a class with our public shares on any initial business combination. The issuance of additional ordinary shares or preferred
shares:
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● |
may
significantly dilute the equity interest of investors, which dilution would increase if the anti-dilution provisions in the
Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion
of the Class B ordinary shares; |
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● |
may
subordinate the rights of holders of ordinary shares if preferred shares are issued with rights senior to those afforded our
ordinary shares; |
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● |
could
cause a change of control if a substantial number of our ordinary shares are issued, which may affect, among other things,
our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present
directors and officers; |
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● |
may
have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a
person seeking to obtain control of us; and |
| |
● |
may
adversely affect prevailing market prices for our units, ordinary shares and/or warrants. |
We
may be a passive foreign investment company, or “PFIC,” which could result in adverse U.S. federal income tax consequences
to U.S. investors.
If
we are a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. holder of our ordinary
shares or warrants, the U.S. holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional
reporting requirements. Our PFIC status for our current and subsequent taxable years may depend upon the status of an acquired
company pursuant to a business combination and whether we qualify for the PFIC start-up exception. Depending on the particular
circumstances, the application of the start-up exception may be subject to uncertainty, and there cannot be any assurance that
we will qualify for the start-up exception. Accordingly, there can be no assurances with respect to our status as a PFIC for our
current taxable year or any subsequent taxable year. Our actual PFIC status for any taxable year, however, will not be determinable
until after the end of such taxable year. Moreover, if we determine we are a PFIC for any taxable year, we will endeavor to provide
to a U.S. holder such information as the Internal Revenue Service (“IRS”) may require, including a PFIC Annual Information
Statement, in order to enable the U.S. holder to make and maintain a “qualified electing fund” election, but there
can be no assurance that we will timely provide such required information, and such election would likely be unavailable with
respect to our warrants in all cases. We urge U.S. holders to consult their own tax advisors regarding the possible application
of the PFIC rules to holders of our ordinary shares and warrants.
We
may reincorporate in another jurisdiction in connection with our initial business combination and such reincorporation may result
in taxes imposed on shareholders.
We
may, in connection with our initial business combination and subject to requisite shareholder approval by special resolution under
the Companies Law, reincorporate in the jurisdiction in which the target company or business is located or in another jurisdiction.
The transaction may require a shareholder to recognize taxable income in the jurisdiction in which the shareholder is a tax resident
or in which its members are resident if it is a tax transparent entity. We do not intend to make any cash distributions to shareholders
to pay such taxes. Shareholders may be subject to withholding taxes or other taxes with respect to their ownership of us after
the reincorporation.
Resources
could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts
to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public
shareholders may receive only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation
of our trust account and our warrants will expire worthless.
We
anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements,
disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants,
attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point
for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target
business, we may fail to complete our initial business combination for any number of reasons including those beyond our control.
Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts
to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public
shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust
account and our warrants will expire worthless.
We
are dependent upon our directors and officers and their departure could adversely affect our ability to operate.
Our
operations are dependent upon a relatively small group of individuals and in particular, Michael Doniger, our Chief Executive
Officer and Chairman of the board of directors, Hank Thomas, our Chief Technology Officer and one of our directors, and Chris
Ahern, our Chief Financial Officer and Secretary. We believe that our success depends on the continued service of our directors
and officers, at least until we have completed our initial business combination. In addition, our directors and officers are not
required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating
their time among various business activities, including identifying potential business combinations and monitoring the related
due diligence. Moreover, certain of our directors and officers have time and attention requirements for investment funds of which
affiliates of our sponsor are the investment managers. We do not have an employment agreement with, or key-man insurance on the
life of, any of our directors or officers. The unexpected loss of the services of one or more of our directors or officers could
have a detrimental effect on us.
Our
ability to successfully effect our initial business combination and to be successful thereafter will be dependent upon the efforts
of our key personnel, some of whom may join us following our initial business combination. The loss of our or a target’s
key personnel could negatively impact the operations and profitability of our post-combination business.
Our
ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of
our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain
with the target business in senior management or advisory positions following our initial business combination, it is likely that
some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals
we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to
be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could
cause us to have to expend time and resources helping them become familiar with such requirements.
In
addition, the directors and officers of an acquisition candidate may resign upon completion of our initial business combination.
The departure of a business combination target’s key personnel could negatively impact the operations and profitability
of our post-combination business. The role of an acquisition candidate’s key personnel upon the completion of our initial
business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s
management team will remain associated with the acquisition candidate following our initial business combination, it is possible
that members of the management of an acquisition candidate will not wish to remain in place. The loss of key personnel could negatively
impact the operations and profitability of our post-combination business.
Our
key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business
combination. These agreements may provide for them to receive compensation following our initial business combination and as a
result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Our
key personnel may be able to remain with the company after the completion of our initial business combination only if they are
able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take
place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation
in the form of cash payments and/or our securities for services they would render to us after the completion of our initial business
combination. The personal and financial interests of such individuals may influence their motivation in identifying and selecting
a target business, subject to his or her fiduciary duties under Cayman Islands law. However, we believe the ability of such individuals
to remain with us after the completion of our initial business combination will not be the determining factor in our decision
as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any of our
key personnel will remain with us after the completion of our initial business combination. We cannot assure you that any of our
key personnel will remain in senior management or advisory positions with us. The determination as to whether any of our key personnel
will remain with us will be made at the time of our initial business combination.
We
may have limited ability to assess the management of a prospective target business and, as a result, may affect our initial business
combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
When
evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess
the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications
or abilities we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary
to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly,
any shareholder or warrant holder who chooses to remain a shareholder or warrant holder following our initial business combination
could suffer a reduction in the value of their securities. Such shareholders and warrant holders are unlikely to have a remedy
for such reduction in value.
The
directors and officers of an acquisition candidate may resign upon completion of our initial business combination. The departure
of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination
business. The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot
be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team
will remain associated with the acquisition candidate following our initial business combination, it is possible that members
of the management of an acquisition candidate will not wish to remain in place.
Our
directors and officers will allocate their time to other businesses thereby causing conflicts of interest in their determination
as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete
our initial business combination.
Our
directors and officers are not required to, and will not, commit their full time to our affairs, which may result in a conflict
of interest in allocating their time between our operations and our search for a business combination and their other businesses.
We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our officers
is engaged in several other business endeavors for which he may be entitled to substantial compensation and our officers are not
obligated to contribute any specific number of hours per week to our affairs. In particular, all of our officers and certain of
our directors have fiduciary and contractual duties to either SCV or Hudson Bay and to certain companies in which either of them
has invested, including companies in industries we may target for our initial business combination. Our independent directors
also serve as officers and board members for other entities. If our officers’ and directors’ other business affairs
require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit
their ability to devote time to our affairs, which may have a negative impact on our ability to complete our initial business
combination. For a complete discussion of our officers’ and directors’ other business affairs, please see “Management
— Directors and Officers.”
Certain
of our directors and officers are now, and all of them may in the future become, affiliated with entities engaged in business
activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to
which entity a particular business opportunity should be presented.
Until
we consummate our initial business combination, we are engaged in the business of identifying and combining with one or more businesses.
Our sponsor and directors and officers are, or may in the future become, affiliated with entities that are engaged in a similar
business. Our sponsor and directors and officers are also not prohibited from sponsoring, or otherwise becoming involved with,
any other blank check companies prior to us completing our initial business combination. Moreover, certain of our directors and
officers have time and attention requirements for investment funds of which affiliates of our sponsor are the investment managers.
Our
directors and officers also may become aware of business opportunities which may be appropriate for presentation to us and the
other entities to which they owe certain fiduciary or contractual duties. Accordingly, they may have conflicts of interest in
determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our
favor and a potential target business may be presented to other entities prior to its presentation to us, subject to his or her
fiduciary duties under Cayman Islands law. Our amended and restated memorandum and articles of association provides that we renounce
our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such
person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to complete
on a reasonable basis.
For
a complete discussion of our officers’ and directors’ business affiliations and the potential conflicts of interest
that you should be aware of, please see “Management — Directors, Director Nominees and Officers,” “Management
— Conflicts of Interest” and “Certain Relationships and Related Transactions, and Director Independence.”
Our
directors, officers, security holders and their respective affiliates may have competitive pecuniary interests that conflict with
our interests.
We
have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct
or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which
we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated
with our sponsor, our directors or officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits
any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons
or entities may have a conflict between their interests and ours.
In
particular, affiliates of our sponsor have invested in industries as diverse as healthcare, education, financial services, artificial
intelligence and social media. As a result, there may be substantial overlap between companies that would be a suitable business
combination for us and companies that would make an attractive target for such other affiliates.
We
may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated
with our sponsor, directors or officers which may raise potential conflicts of interest.
In
light of the involvement of our sponsor, directors and officers with other entities, we may decide to acquire one or more businesses
affiliated with our sponsor, directors and officers. Our directors and officers also serve as officers and board members for other
entities, including those described under “Management — Conflicts of Interest.” Such entities may compete with
us for business combination opportunities. Our sponsor, directors and officers are not currently aware of any specific opportunities
for us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive
discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing
on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such
affiliated entity met our criteria for a business combination as set forth in “Business — Selection of a Target Business
and Structuring of Our business combination” and such transaction was approved by a majority of our independent and disinterested
directors. Despite our agreement that we, or a committee of independent and disinterested directors, will obtain an opinion from
an independent investment banking firm that is a member of FINRA or from an independent accounting firm, regarding the fairness
to our company from a financial point of view of a business combination with one or more domestic or international businesses
affiliated with our sponsor, directors or officers, potential conflicts of interest still may exist and, as a result, the terms
of the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest.
Since
our initial shareholders will lose their entire investment in us if our initial business combination is not completed, a conflict
of interest may arise in determining whether a particular business combination target is appropriate for our initial business
combination.
As of April 28, 2022, our initial shareholders hold 5,750,000 founder
shares and 6,600,000 private placement warrants. The founder shares and private placement warrants will be worthless if we do not complete
an initial business combination.
If
we submit our initial business combination to our public shareholders for a vote, our initial shareholders have agreed (and their
permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote their founder shares
and any public shares held by them in favor of our initial business combination.
The personal and financial
interests of our sponsor, directors and officers may influence their motivation in identifying and selecting a target business combination,
completing an initial business combination and influencing the operation of the business following the initial business combination. This
risk may become more acute as July 28, 2022 nears, which is the deadline for the completion of our initial business combination.
We
may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely
affect our leverage and financial condition and thus negatively impact the value of our shareholders’ investment in us.
Although
we have no commitments as of the date of this Annual Report on Form 10-K to issue any notes or other debt securities, or to otherwise
incur outstanding debt, we may choose to incur substantial debt to complete our initial business combination. We have agreed that
we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of
any kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per-share amount available
for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
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default
and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our
debt obligations; |
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acceleration
of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain
covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
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our
immediate payment of all principal and accrued interest, if any, if the debt is payable on demand; |
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our
inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing
while the debt is outstanding; |
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our
inability to pay dividends on our ordinary shares; |
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● |
using
a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for
dividends on our ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
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● |
limitations
on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
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● |
increased
vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government
regulation; and |
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● |
limitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution
of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
We may be able to complete only one business
combination with the remaining proceeds of our Initial Public Offering and the sale of the private placement warrants, which will cause
us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification may
negatively impact our operations and profitability.
We
may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or
within a short period of time. However, we may not be able to effectuate our initial business combination with more than one target
business because of various factors, including the existence of complex accounting issues and the requirement that we prepare
and file pro forma financial statements with the SEC that present operating results and the financial condition of several target
businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single
entity our lack of diversification may subject us to numerous economic, competitive and regulatory risks. Further, we would not
be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities
which may have the resources to complete several business combinations in different industries or different areas of a single
industry. Accordingly, the prospects for our success may be:
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● |
solely
dependent upon the performance of a single business, property or asset; or |
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dependent
upon the development or market acceptance of a single or limited number of products, processes or services. |
This
lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a
substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We
may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to
complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations
and profitability.
If
we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers
to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which
may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business
combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations
and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation
of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately
address these risks, it could negatively impact our profitability and results of operations.
We
may attempt to complete our initial business combination with a private company about which little information is available, which
may result in a business combination with a company that is not as profitable as we suspected, if at all.
In
pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company. Very
little public information generally exists about private companies, and we could be required to make our decision on whether to
pursue a potential initial business combination on the basis of limited information, which may result in a business combination
with a company that is not as profitable as we suspected, if at all.
Our
management may not be able to maintain control of a target business after our initial business combination. We cannot provide
assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities
necessary to profitably operate such business.
We
may structure our initial business combination so that the post-transaction company in which our public shareholders own shares
will own less than 100% of the equity interests or assets of a target business, but we will complete such business combination
only if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target
or otherwise acquires a controlling interest in the target business sufficient for us not to be required to register as an investment
company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction
company owns 50% or more of the voting securities of the target, our shareholders prior to our initial business combination may
collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target
and us in our initial business combination transaction. For example, we could pursue a transaction in which we issue a substantial
number of new ordinary shares in exchange for all of the issued and outstanding capital stock or shares of a target. In this case,
we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new ordinary shares,
our shareholders immediately prior to such transaction could own less than a majority of our issued and outstanding ordinary shares
subsequent to such transaction. In addition, other minority shareholders may subsequently combine their holdings resulting in
a single person or group obtaining a larger share of the company’s shares than we initially acquired. Accordingly, this
may make it more likely that our management will not be able to maintain our control of the target business.
We
do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to
complete a business combination with which a substantial majority of our shareholders do not agree.
Our
amended and restated memorandum and articles of association does not provide a specified maximum redemption threshold, except
that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001
following such redemptions, or any greater net tangible asset or cash requirement that may be contained in the agreement relating
to our initial business combination. As a result, we may be able to complete our initial business combination even though a substantial
majority of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder
approval of our initial business combination and do not conduct redemptions in connection with our initial business combination
pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, directors,
officers, advisors or any of 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 us, we will not complete the business combination
or redeem any shares, and all ordinary shares submitted for redemption will be returned to the holders thereof, and we instead
may search for an alternate business combination.
The
exercise price for the public warrants is higher than in many similar blank check company offerings in the past, and, accordingly,
the warrants are more likely to expire worthless.
The
exercise price of the public warrants is higher than is typical in many similar blank check companies in the past. Historically,
the exercise price of a warrant was generally a fraction of the purchase price of the units in the initial public offering. The
exercise price for our public warrants is $11.50 per share, subject to adjustment. As a result, the warrants are more likely to
expire worthless.
In
order to effectuate an initial business combination, blank check companies have, in the past, amended various provisions of their
charters and modified governing instruments. We cannot assure you that we will not seek to amend our amended and restated memorandum
and articles of association or governing instruments in a manner that will make it easier for us to complete our initial business
combination that some of our shareholders may not support.
In order to effectuate an
initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified
governing instruments. For example, blank check companies have amended the definition of business combination, increased redemption thresholds
and extended the time to consummate an initial business combination. Amending our amended and restated memorandum and articles of association
requires at least a special resolution of our shareholders as a matter of Cayman Islands law. A resolution is deemed to be a special resolution
as a matter of Cayman Islands law where it has been approved by either (1) holders of at least two-thirds (or any higher threshold specified
in a company’s articles of association) of a company’s ordinary shares at a general meeting for which notice specifying the
intention to propose the resolution as a special resolution has been given or (2) if so authorized by a company’s articles of association,
by a unanimous written resolution of all of the company’s shareholders. Our amended and restated memorandum and articles of association
provides that special resolutions must be approved either by holders of at least two-thirds of our ordinary shares who attend and vote
at a general meeting (i.e., the lowest threshold permissible under Cayman Islands law) (other than amendments relating to provisions governing
the appointment or removal of directors prior to our initial business combination, which require the approval of a majority of at least
90% of our ordinary shares attending and voting in a general meeting), or by a unanimous written resolution of all of our shareholders.
We cannot assure you that we will not seek to amend our amended and restated memorandum and articles of association or governing instruments
or extend the time to consummate an initial business combination in order to effectuate our initial business combination. In such case,
we expect any such amendment would be approved, given the substantial ownership interests of our sponsor, officers and directors.
Certain
provisions of our amended and restated memorandum and articles of association that relate to our pre-business combination activity
(and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the
approval of holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting, which is a lower amendment
threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated
memorandum and articles of association and the trust agreement to facilitate the completion of an initial business combination
that some of our shareholders may not support.
Some
other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including
those which relate to a company’s pre-business combination activity, without approval by holders of a certain percentage
of the company’s shares. In those companies, amendment of these provisions typically requires approval by holders holding
between 90% and 100% of the company’s public shares. Our amended and restated memorandum and articles of association provides
that any of its provisions, including those related to pre-business combination activity (including the requirement to deposit
proceeds of our Initial Public Offering and the Private Placement into the trust account and not release such amounts except in
specified circumstances), may be amended if approved by holders of at least two-thirds of our ordinary shares who attend and vote
in a general meeting, and corresponding provisions of the trust agreement governing the release of funds from our trust account
may be amended if approved by holders of 65% of our ordinary shares (other than amendments relating to provisions governing the
appointment or removal of directors prior to our initial business combination, which require the approval of a majority of at
least 90% of our ordinary shares attending and voting in a general meeting). Our initial shareholders may participate in any vote
to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to
vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated memorandum and
articles of association which govern our pre-business combination behavior more easily than some other blank check companies,
and this may increase our ability to complete our initial business combination with which you do not agree. In certain circumstances,
our shareholders may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
We
may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth
of a target business, which could compel us to restructure or abandon a particular business combination.
Although we believe that the
remaining net proceeds of our Initial Public Offering and the sale of the private placement warrants will be sufficient to allow us to
complete our initial business combination, because we have not yet agreed with any target business we cannot ascertain the capital requirements
for any particular transaction. If the remaining net proceeds of our Initial Public Offering and the sale of the private placement warrants
prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds
in search of a target business, the obligation to redeem for cash a significant number of shares from shareholders who elect redemption
in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our
initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. We cannot
assure you that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be
unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon
that particular business combination and seek an alternative target business candidate.
In
addition, even if we do not need additional financing to complete our initial business combination, we may require such financing
to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse
effect on the continued development or growth of the target business. None of our directors, officers or shareholders is required
to provide any financing to us in connection with or after our initial business combination. If we are unable to complete our
initial business combination, our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances,
on the liquidation of our trust account, and our warrants will expire worthless.
Our
initial shareholders will control the election of our board of directors until consummation of our initial business combination
and hold a substantial interest in us. As a result, they will elect all of our directors prior to our initial business combination
and may exert a substantial influence on actions requiring shareholder vote, potentially in a manner that you do not support.
Our
initial shareholders own approximately [60]% of our issued and outstanding ordinary shares. In addition, prior to our initial business
combination, holders of the founder shares have the right to elect all of our directors and may remove members of the board of directors
for any reason. Holders of our public shares have no right to vote on the election of directors during such time. These provisions of
our amended and restated memorandum and articles of association may only be amended by a special resolution passed by a majority of at
least 90% of our ordinary shares attending and voting in a general meeting. As a result, holders of our public shares will not have any
influence over the election of directors prior to our initial business combination.
Neither our initial shareholders
nor, to our knowledge, any of our directors or officers, have any current intention to purchase additional securities. Factors that would
be considered in making such additional purchases would include consideration of the current trading price of our Class A ordinary shares.
In addition, as a result of their majority ownership in our company, our initial shareholders can control other actions requiring a shareholder
vote, potentially in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association
and approval of major corporate transactions. If our initial shareholders purchase any Class A ordinary shares, this would increase their
influence over these actions. Accordingly, our initial shareholders will control actions requiring a shareholder vote at least until the
completion of our initial business combination.
We
may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders
of at least 65% of the then outstanding public warrants.
Our
warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant
agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder
to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then
outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants.
Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 65% of the then
outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the
consent of at least 65% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments
to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of ordinary
shares purchasable upon exercise of a warrant.
A
provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.
Unlike
most blank check companies, if
(i)
we issue additional ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of
our initial business combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue
price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance
to our sponsor or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable,
prior to such issuance) (the “Newly Issued Price”);
(ii)
the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available
for the funding of our initial business combination on the date of the completion of our initial business combination (net of
redemptions), and
(iii)
the volume weighted average trading price of our ordinary shares during the 20 trading day period starting on the trading day
prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below
$9.20 per share, then the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value
and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal
to 180% of the higher of the Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an
initial business combination with a target business.
We
may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants
worthless.
We
have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a
price of $0.01 per warrant; provided that the last reported sales price of our Class A ordinary shares equals or exceeds $18.00
per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and
the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the
notice of redemption to the warrant holders. If and when the warrants become redeemable by us, we may exercise our redemption
right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise the warrants.
Redemption of the outstanding warrants could force you to: (1) exercise your warrants and pay the exercise price therefor at a
time when it may be disadvantageous for you to do so; (2) sell your warrants at the then-current market price when you might otherwise
wish to hold your warrants; or (3) 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 us so long as they are held by our sponsor or its permitted transferees.
Our
warrants and founder shares may have an adverse effect on the market price of our Class A ordinary shares and make it more difficult
to effectuate our initial business combination.
We
issued warrants to purchase 11,500,000 Class A ordinary shares, at a price of $11.50 per whole share, subject to adjustment, as
part of the units offered in our Initial Public Offering and, simultaneously with the closing of our Initial Public Offering,
we issued in the Private Placement an aggregate of 6,600,000 private placement warrants, each exercisable to purchase one Class
A ordinary share at a price of $11.50 per share, subject to adjustment. Our initial shareholders currently hold 5,750,000 Class
B ordinary shares. The Class B ordinary shares are convertible into Class A ordinary shares on a one-for-one basis, subject to
adjustment.
In
addition, if our sponsor, an affiliate of our sponsor or certain of our directors and officers make any working capital loans,
up to $1,500,000 of such loans may be converted into warrants, at the price of $1.00 per warrant at the option of the lender.
Such warrants would be identical to the private placement warrants. To the extent we issue Class A ordinary shares to effectuate
a business transaction, the potential for the issuance of a substantial number of additional Class A ordinary shares upon exercise
of these warrants or conversion rights could make us a less attractive acquisition vehicle to a target business. Any such issuance
will increase the number of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares
issued to complete the business transaction. Therefore, our warrants and founder shares may make it more difficult to effectuate
a business combination or increase the cost of acquiring the target business.
The
private placement warrants are identical to the warrants sold as part of the units in our Initial Public Offering except that,
so long as they are held by our sponsor or its permitted transferees: (1) they will not be redeemable by us; (2) they (including
the Class A ordinary shares issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred,
assigned or sold by our sponsor until 30 days after the completion of our initial business combination; (3) they may be exercised
by the holders on a cashless basis; and (4) they (including the ordinary shares issuable upon exercise of these warrants) are
entitled to registration rights.
Because
each unit contains one-half of one redeemable warrant and only a whole warrant may be exercised, the units may be worth less than
units of other blank check companies.
Each
unit contains one-half of one redeemable warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon
separation of the units, and only whole units will trade. This is different from other companies similar to us whose units include
one ordinary share and one whole warrant to purchase one share. We have established the components of the units in this way in
order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable
in the aggregate for a half of the number of shares compared to units that each contain a whole warrant to purchase one whole
share, thus making us, we believe, a more attractive business combination partner for target businesses. Nevertheless, this unit
structure may cause our units to be worth less than if they included a warrant to purchase one whole share.
Because
we must furnish our shareholders with target business financial statements, we may lose the ability to complete an otherwise advantageous
initial business combination with some prospective target businesses.
The
federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial
significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the
same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the
tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, U.S. GAAP
or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with
the standards of the PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire
because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in
accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.
We
are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage
of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this
could make our securities less attractive to investors and may make it more difficult to compare our performance with other public
companies.
We
are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we have
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 our periodic reports
and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and
shareholder approval of any golden parachute payments not previously approved. As a result, our shareholders may not have access
to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances
could cause us to lose that status earlier, including if the market value of our ordinary shares held by non-affiliates exceeds
$700 million as of the end of any second quarter of a fiscal year, in which case we would no longer be an emerging growth company
as of the end of such fiscal year. We cannot predict whether investors will find our securities less attractive because we will
rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions,
the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for
our securities and the trading prices of our securities may be more volatile.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial
accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared
effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised
financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and
comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have
elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different
application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at
the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another
public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended
transition period difficult or impossible because of the potential differences in accounting standards used.
Additionally,
we are a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may
take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial
statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of
our ordinary shares held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (2)
our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by
non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter. Because we take advantage of such
reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult
or impossible.
Compliance
obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require
substantial financial and management resources, and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley
Act requires that we evaluate and report on our system of internal controls beginning with this Annual Report on Form 10-K for the year
ending December 31, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify
as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement
on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of
the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business with which we seek
to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy
of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act
may increase the time and costs necessary to complete any such acquisition.
Because
we are incorporated under the laws of the Cayman 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.
We
are an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect
service of process within the United States upon our directors or officers, or enforce judgments obtained in the United States
courts against our directors or officers.
Our
corporate affairs are governed by our amended and restated memorandum and articles of association, the Companies Law (as the same
may be supplemented or amended from time to time) and the common law of the Cayman Islands. The rights of shareholders to take
action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under
Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands
is derived in part from comparatively limited judicial precedent in the Cayman 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 Cayman Islands. The rights of our
shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be
under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman 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, Cayman Islands companies may not have standing to initiate a
shareholders derivative action in a Federal court of the United States.
We
have been advised by our Cayman Islands legal counsel that the courts of the Cayman Islands are unlikely (1) to recognize or enforce
against us 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 (2) in original actions brought in the Cayman Islands, to impose liabilities against us
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 Cayman Islands of judgments obtained in the United States, the courts of the Cayman 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 Cayman 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 Cayman
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 Cayman Islands (awards of punitive or multiple
damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent
proceedings are being brought elsewhere.
As
a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions
taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a
United States company.
Provisions
in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors
might be willing to pay in the future for our Class A ordinary shares and could entrench management.
Our
amended and restated memorandum and articles of association contains provisions that may discourage unsolicited takeover proposals
that shareholders may consider to be in their best interests. These provisions include two-year director terms and the ability
of the board of directors to designate the terms of and issue new series of preferred shares, which may make more difficult the
removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market
prices for our securities.
After
our initial business combination, it is possible that a majority of our directors and officers will live outside the United States
and all or substantially all of our assets will be located outside the United States; therefore investors may not be able to enforce
federal securities laws or their other legal rights.
It
is possible that after our initial business combination, a majority of our directors and officers will reside outside of the United
States and all or substantially all of our assets will be located outside of the United States. As a result, it may be difficult,
or in some cases not possible, for investors in the United States to enforce their legal rights, to effect service of process
upon all of our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal
penalties on our directors and officers under United States laws.
If
our management team pursues a company with operations or opportunities outside of the United States for our initial business combination,
we may face additional burdens in connection with investigating, agreeing to and completing such combination, and if we effect
such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations.
While
we intend to focus our search for a target business operating in the technology industries globally, if our management team pursues
a company with operations or opportunities outside of the United States for our initial business combination, we would be subject
to risks associated with cross-border business combinations, including in connection with investigating, agreeing to and completing
our initial business combination, conducting due diligence in a foreign market, having such transaction approved by any local
governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
If
we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated
with companies operating in an international setting, including any of the following:
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costs
and difficulties inherent in managing cross-border business operations and complying with commercial and legal requirements
of overseas markets; |
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rules
and regulations regarding currency redemption; |
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complex
corporate withholding taxes on individuals; |
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laws
governing the manner in which future business combinations may be effected; |
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tariffs
and trade barriers; |
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regulations
related to customs and import/export matters; |
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tax
consequences, such as tax law changes, including termination or reduction of tax and other incentives that the applicable
government provides to domestic companies, and variations in tax laws as compared to the United States; |
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currency
fluctuations and exchange controls; |
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challenges
in collecting accounts receivable; |
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cultural
and language differences; |
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employment
regulations; |
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crime,
strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars; |
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deterioration
of political relations with the United States; |
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obligatory
military service by personnel; and |
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government
appropriation of assets. |
We
may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such combination
or, if we complete such combination, our operations might suffer, either of which may adversely impact our results of operations
and financial condition.
If
our management following our initial business combination is unfamiliar with U.S. securities laws, they may have to expend time
and resources becoming familiar with such laws, which could lead to various regulatory issues.
Following
our initial business combination, any or all of our management could resign from their positions as officers of the company, and
the management of the target business at the time of the business combination could remain in place. Management of the target
business may not be familiar with U.S. securities laws. If new management is unfamiliar with U.S. securities laws, they may have
to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various
regulatory issues which may adversely affect our operations.
After
our initial business combination, our results of operations and prospects could be subject, to a significant extent, to the economic,
political, social and government policies, developments and conditions in the country in which we operate.
The
economic, political and social conditions, as well as government policies, of the country in which our operations are located
could affect our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such
growth may not be sustained in the future. If in the future such country’s economy experiences a downturn or grows at a
slower rate than expected, there may be less demand for spending in certain industries. A decrease in demand for spending in certain
industries could materially and adversely affect our ability to find an attractive target business with which to consummate our
initial business combination and if we effect our initial business combination, the ability of that target business to become
profitable.
Exchange
rate fluctuations and currency policies may cause a target business’s ability to succeed in the international markets to
be diminished.
In
the event we acquire a non-U.S. target, all revenues and income would likely be received in a foreign currency, and the dollar
equivalent of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency.
The value of the currencies in our target regions fluctuate and are affected by, among other things, changes in political and
economic conditions. Any change in the relative value of such currency against our reporting currency may affect the attractiveness
of any target business or, following consummation of our initial business combination, our financial condition and results of
operations. Additionally, if a currency appreciates in value against the dollar prior to the consummation of our initial business
combination, the cost of a target business as measured in dollars will increase, which may make it less likely that we are able
to consummate such transaction.
We may face risks related to companies in the technology industries.
Business combinations with companies in the technology industries entail special considerations and risks.
If we are successful in completing a business combination with such a target business, we may be subject to, and possibly adversely affected by, the following risks:
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an inability to compete effectively in a highly competitive environment with many incumbents having substantially greater resources; |
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an inability to manage rapid change, increasing consumer expectations and growth; |
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an inability to build strong brand identity and improve subscriber or customer satisfaction and loyalty; |
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a reliance on proprietary technology to provide services and to manage our operations, and the failure of this technology to operate effectively, or our failure to use such technology effectively; |
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an inability to deal with our subscribers’ or customers’ privacy concerns; |
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an inability to attract and retain subscribers or customers; |
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an inability to license or enforce intellectual property rights on which our business may depend; |
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any significant disruption in our computer systems or those of third parties that we would utilize in our operations; |
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an inability by us, or a refusal by third parties, to license content to us upon acceptable terms; |
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potential liability for negligence, copyright, or trademark infringement or other claims based on the nature and content of materials that we may distribute; |
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competition for advertising revenue; |
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competition for the leisure and entertainment time and discretionary spending of subscribers or customers, which may intensify in part due to advances in technology and changes in consumer expectations and behavior; |
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disruption or failure of our networks, systems or technology as a result of computer viruses, “cyber-attacks,” misappropriation of data or other malfeasance, as well as outages, natural disasters, terrorist attacks, accidental releases of information or similar events; |
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an inability to obtain necessary hardware, software and operational support; and |
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reliance on third-party vendors or service providers. |
Any of the foregoing could have an adverse impact on our operations following a business combination. However, our efforts in identifying prospective target businesses will not be limited to the technology industries. Accordingly, if we acquire a target business in another industry, these risks we will be subject to risks attendant with the specific industry in which we operate or target business which we acquire, which may or may not be different than those risks listed above.
Our search for a business combination, and
any target business with which we ultimately consummate a business combination, may be materially adversely affected by the coronavirus
(COVID-19) outbreak.
On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (the “COVID-19 outbreak”). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve. The COVID-19 outbreak has resulted in a widespread health crisis that has adversely affected, and may continue to adversely affect, the economies and financial markets worldwide, and the business of any potential target business with which we may consummate a business combination could be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential financing sources or a potential target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 may impact our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected. In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events.
