UNITED
STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Schedule
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
(Amendment
No. )
Filed by
the Registrant ☒
Filed by a
party other than the Registrant ☐
Check
the appropriate box:
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Preliminary Proxy
Statement |
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Confidential, for Use
of the Commission Only (as permitted by Rule
14a-6(e)(2)) |
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Definitive
Proxy Statement |
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Definitive
Additional Materials |
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Soliciting
Material under § 240.14a-12 |
Acri
Capital Acquisition Corporation
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment
of Filing Fee (Check all boxes that apply):
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Fee paid
previously with preliminary materials. |
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Fee
computed on table in exhibit required by Item 25(b) per Exchange
Act Rules 14a- 6(i)(1) and 0-11 |
Acri Capital Acquisition Corporation
13284 Pond Springs Rd, Ste 405
Austin, Texas
NOTICE OF SPECIAL
MEETING OF STOCKHOLDERS
TO BE HELD January 24,
2023
To the Stockholders of Acri Capital Acquisition Corporation:
You are cordially invited to attend the special meeting (the
“special meeting”) of stockholders of Acri Capital Acquisition
Corporation (“Acri Capital” the “Company,” “we,” “us” or “our”) to
be held virtually on January 24, 2023 at 9:00 a.m., Eastern Time.
You will be able to attend the special meeting online, vote and
submit your questions during the special meeting by visiting
[_].
If you plan to attend the virtual special
meeting, please be sure to follow instructions found on your proxy
card, voting instruction form or notice to consider and vote upon
the following proposals:
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Proposal No. 1 - The Extension Amendment Proposal – a
proposal to amend the Company’s amended and restated certificate of
incorporation (the “Charter”) to amend the amount of monthly
deposit (each, a “Monthly Extension Payment”) required to be
deposited in the trust account (the “Trust Account”) from $0.0333
for each public share to $[__] for each public share for up to nine
(9) times if the Company has not consummated its initial business
combination by March 14, 2023 (the nine (9) month anniversary of
the closing of its initial public offering) (the “Extension
Amendment Proposal”) (such amendment to the Charter as set forth in
Annex A is herein referred to as the “Extension
Amendment”); |
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Proposal No. 2 - The Adjournment Proposal – a proposal to
adjourn the special meeting to a later date or dates, if necessary,
to permit further solicitation and vote of proxies if, at the time
of the special meeting, there are not sufficient votes for, or
otherwise in connection with, the approval of the foregoing
proposal (the “Adjournment Proposal”). |
If the stockholders approve the Extension Amendment Proposal, for
each public share that is not redeemed by the stockholders in
connection with the Extension Amendment Proposal (collectively, the
“Remaining Shares”, each, a “Remaining Share”), for each monthly
period, or portion thereof during the Extension, the Company will
make Monthly Extension Payment of $[__] per public share in the
Trust Account . If there is (i) no redemption
of the public shares, the Monthly Extension Payment will be $[__],
(ii) 50% redemption of the public shares, the Monthly Extension
Payment will be $[__], and (iii) 80% redemption of the public
shares, the Monthly Extension Payment will be $[__]. The first
Monthly Extension Payment after the approval of the Extension
Amendment Proposal must be made prior to March 14, 2023, while the
second Monthly Extension Payment must be deposited into the Trust
Account prior to 14th of each succeeding month until end of
Extended Termination Date (as defined below). We intend to issue a
press release announcing the deposit of funds promptly after such
funds are deposited into the Trust Account.
Each of the proposals is more fully described in the accompanying
proxy statement.
The Adjournment Proposal will only be presented at the special
meeting if, based on the tabulated votes, there are not sufficient
votes at the time of the special meeting for, or otherwise in
connection with, the approval of other proposals.
The Board has fixed the close of business on December 28, 2022 (the
“Record Date”) as the date for determining the stockholders
entitled to receive notice of and vote at the special meeting and
any adjournment thereof. Only holders of record of the Company’s
outstanding shares on that date are entitled to have their votes
counted at the special meeting or any adjournment. On the Record
Date, there were 8,625,000 shares of Class A common stock, par
value $0.0001 per share (“Class A Common Stock”) issued and
outstanding, all of which are public shares and 2,156,250 shares of
Class B common stock, par value $0.0001 per share (“Class B Common
Stock”, together with Class A Common Stock, “Common Stock”) issued
and outstanding.
The purpose of the Extension Amendment is to allow the Company to
have more flexibility to complete the initial business combination.
The Company’s initial public offering (the “IPO”) prospectus (File
No. 333-263477) (the “IPO Prospectus”) dated June 9, 2022 and the
Charter provide that we have until March 14, 2023 (the “Current
Termination Date”) to complete a merger, capital stock exchange,
asset acquisition, stock purchase, recapitalization, reorganization
or other similar business combination with one or more businesses
or entities, or an “initial business combination.” If we anticipate
that we may not be able to consummate the initial business
combination by the Current Termination Date, we may, but are not
obligated to, if requested by Acri Capital Sponsor LLC, a Delaware
limited liability company, our sponsor (the “Sponsor”) or its
affiliates, extend the Termination Date up to nine (9) times by an
additional one month each time for a total of up to 9 months (the
“Paid
Extension Period”) by depositing $287,212.5 per month (or
$0.0333 per public share) into the Trust Account, affording the
Company up to eighteen (18) months from the closing of the IPO to
complete our initial business combination (the end of such period,
the “Extended Termination Date”). Further, the IPO Prospectus and
the Charter provide that the Company may modify the Current
Termination Date by amending the Charter approved by the
affirmative vote of the holders of at least sixty-five percent
(65%) of all then outstanding shares of Common Stock.
The Board currently believes that there will not be sufficient time
before March 14, 2023 for the Company to complete the initial
business combination. Under the circumstances, the Sponsor wants to
pay an extension amount that is substantially less than the
$287,212.5 for Paid Extension Period as provided by the Charter. If
the Extension Amendment Proposal is approved, the Company will
still have the right to extend the time for the Company to complete
its initial business combination from March 14, 2023 to December
14, 2023 (i.e., 18 months from the closing of the IPO), provided
that the Monthly Extension Payment of $[__] per public share is
deposited into the Trust Account on or prior to the 14th day of
each month commencing from March until December 2023. In connection
with the Extension Amendment, if there is (i) no redemption of the
public shares, the Monthly Extension Payment will be $[__], (ii)
50% redemption of the public shares, the Monthly Extension Payment
will be $[__], and (iii) 80% redemption of the public shares, the
Monthly Extension Payment will be $[__]. The Company’s board has
determined that, given the Company’s expenditure of time, efforts
and money on identifying suitable target business and completion of
a business combination, it is in the best interests of its
stockholder to approve the Extension Amendment.
Although the approval of the Extension Amendment Proposal is
essential to the implementation of the Board’s plan to amend the
Monthly Extension Payment, the Board will retain the right to
abandon and not implement the Extension Amendment at any time
without any further action by stockholders.
If the Extension Amendment Proposal is not approved, and the
initial business combination is not consummated by March 14, 2023
(or by December 14, 2023 if extended), the Company will (i) cease
all operations except for the purpose of winding up, (ii) as
promptly as reasonably possible but not more than ten business days
thereafter, redeem 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 earned on the funds held in the Trust
Account and not previously released to the Company to pay its taxes
or for working capital purposes (less up to $50,000 of interest to
pay dissolution expenses), divided by the number of then
outstanding public shares, which redemption will completely
extinguish public stockholders’ rights as stockholders (including
the right to receive further liquidating distributions, if any),
subject to applicable law, and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of the
Company’s remaining stockholders and the Board, dissolve and
liquidate, subject in each case to the Company’s obligations under
Delaware 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 in the event the Company winds up. The
Company would expect to pay the costs of liquidation from its
remaining assets outside of the Trust Account or available to the
Company from interest income on the Trust Account balance.
You are not being asked to vote on any proposed business
combination at this time. If the Extension Amendment Proposal is
approved and you do not elect to have your public shares redeemed
now, you will retain the right to vote on any proposed business
combination when and if one is submitted to stockholders and the
right to redeem your public shares for a pro rata portion of the
Trust Account in the event a proposed business combination is
approved and completed or the Company has not consummated a
business combination by the Extended Termination Date.
Public stockholders of shares of Class A Common Stock sold in the
IPO may elect to redeem their shares for their pro rata portion of
the funds available in the Trust Account in connection with the
Extension Amendment Proposal (the “Election”), regardless of
whether such public stockholders vote “FOR” or “AGAINST,” or
abstain from voting on, the Extension Amendment Proposal or
otherwise at the special meeting. Public stockholders may make an
Election regardless of whether such public stockholders were
holders as of the Record Date. However, the Company will not
proceed with the Extension Amendment if the redemption of public
shares in connection therewith would cause the Company to have net
tangible assets of less than $5,000,001. In the event that the
redemption of public shares causes the net tangible assets to be
less than $5,000,001 and the Extension Amendment is not proceeded,
the Company will be required to dissolve and liquidate its Trust
Account by returning the then remaining funds in such Trust Account
to the public stockholders.
The Company believes that such redemption right protects the
Company’s public stockholders from having to sustain their
investments for an unreasonably long period if we fail to find a
suitable acquisition in the timeframe initially contemplated by the
Charter. In addition, regardless of whether public stockholders
vote “FOR” or “AGAINST,” or abstain from voting on, the Extension
Amendment Proposal at the special meeting, if the Extension
Amendment Proposal is approved by the requisite vote of
stockholders (and not abandoned), the remaining holders of public
shares will retain their right to redeem their public shares for
their pro rata portion of the funds available in the Trust Account
upon consummation of an initial business combination when it is
submitted to the stockholders, subject to any limitations set forth
in the Charter and the limitations contained in related agreements.
Each redemption of shares by our public stockholders in connection
with the Extension will decrease the amount in our Trust
Account.
PUBLIC STOKHOLDER ARE NOT REQUIRED TO VOTE OR AFFIRMATIVELY VOTE
EITHER FOR OR AGAINST THE EXTENSION AMENDMENT PROPOSAL IN ORDER TO
REDEEM THEIR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE
TRUST ACCOUNT. THIS MEANS THAT PUBLIC STOKHOLDERS WHO HOLD PUBLIC
SHARES ON OR BEFORE TWO BUSINESS DAYS BEFORE THE SPECIAL MEETING
MAY ELECT TO REDEEM THEIR SHARES WHETHER OR NOT THEY ARE HOLDERS OF
THE RECORD DATE, AND WHETHER THEY VOTE FOR OR AGAINST, OR ABSTAIN
FROM VOTING ON, THE EXTENSION AMENDMENT PROPOSAL. YOU MAY TENDER
YOUR SHARES BY EITHER DELIVERING YOUR STOCK CERTIFICATE TO THE
TRANSFER AGENT OR BY DELIVERING YOUR STOCK ELECTRONICALLY USING THE
DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN)
SYSTEM. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO
INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW
THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION
RIGHTS.
We estimate, based on the value of Trust Account as of the Record
Date, that the per-share price at which public shares may be
redeemed from cash held in the Trust Account will be approximately
$[__] pe share, subject to the actual value of the Trust Account at
the time of the redemption. The closing price of Class A Common
Stock on December 28, 2022, the Record Date, was $10.26. We cannot
assure our stockholders that they will be able to sell their shares
of Class A Common Stock in the open market, even if the market
price per share is higher than the redemption price stated above,
as there may not be sufficient liquidity in our securities when our
stockholders wish to sell their shares.
In consideration of the Extension Amendment Proposal, the Company’s
stockholders should be aware that if the Extension Amendment
Proposal is approved (and not abandoned), the Company will incur
additional expenses in seeking to complete an initial business
combination, in addition to the Extension Payments.
Approval of the Extension Amendment Proposal require the
affirmative vote of the holders of at least 65% of the outstanding
shares of Common Stock. The affirmative vote of at least a majority
of the votes cast by the stockholders present in person (including
virtual presence) or represented by proxy at the special meeting is
required to approve the Adjournment Proposal.
After careful consideration of all relevant factors, the Board has
determined that the Extension Amendment Proposal is fair to and in
the best interests of the Company and its stockholders, and has
declared it advisable and recommends that you vote or give
instruction to vote “FOR” it. In addition, the Board recommends
that you vote “FOR” to direct the chairman of the special meeting
to adjourn the special meeting, if applicable.
Under Delaware law and the Company’s bylaws, no other business may
be transacted at the special meeting.
Enclosed is the proxy statement containing detailed information
concerning the Extension Amendment Proposal to be considered at the
special meeting. Whether or not you plan to attend the special
meeting, we urge you to read this material carefully and vote your
shares. We are providing the proxy statement and the accompanying
proxy card to our stockholders in connection with the solicitation
of proxies to be voted at the special meeting and at any
adjournments or postponements of the special meeting. The proxy
statement is dated [__], 2023 and is first being mailed to
stockholders of the Company on or about [__], 2023.
The Company is actively monitoring
the coronavirus (COVID-19) and is sensitive to the public
health and travel concerns stockholders may have as well as the
protocols that federal, state, and local governments may impose.
The Company will hold the special meeting virtually by means of
electronic communication.
Whether or not you plan to attend the special meeting, we urge
you to read the proxy statement carefully and to vote your shares.
Your vote is very important. If you are a registered
stockholder, please vote your shares as soon as possible by
completing, signing, dating and returning the enclosed proxy card
in the postage-paid envelope provided. If you hold your shares
in “street name” through a bank, broker or other nominee, you will
need to follow the instructions provided to you by your bank,
broker or other nominee to ensure that your shares are represented
and voted at the special meeting. If you sign, date and return your
proxy card without indicating how you wish to vote, your proxy will
be voted FOR the proposals to be considered at the special meeting,
except that with respect to the Extension Amendment Proposal, your
votes without instruction how you wish to vote will be counted as
broker “non-votes.”
We look forward to seeing you at the meeting.
Dated: [__], 2023
By Order of the Board of Directors, |
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“Joy”
Yi Hua |
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Chairwoman of the Board of Directors |
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NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY
U. S. STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR
DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT
OR PASSED UPON THEIR MERITS OR FAIRNESS, OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE PROXY
STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Acri Capital Acquisition
Corporation
13284 Pond Springs Rd, Ste 405
Austin, Texas
SPECIAL MEETING OF
STOCKHOLDERS
TO BE HELD JANUARY 24,
2023
PROXY
STATEMENT
The special meeting of stockholders (the “special meeting”) of Acri
Capital Acquisition Corporation (“Acri Capital”, the “Company,”
“we,” “us”
or “our”), a Delaware corporation, will be held virtually on
January 24, 2023 at 9:00 a.m., Eastern Time, to consider and vote
upon the following proposals:
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Proposal No. 1 - The Extension Amendment Proposal – a
proposal to amend the Company’s amended and restated certificate of
incorporation (the “Charter”) to amend the amount of monthly
deposit (each, a “Monthly Extension Payment”) required to be
deposited in the trust account ( the “Trust Account”) from $0.0333
for each public share to $[__] for each public share for up to nine
(9) times if the Company has not consummated its initial business
combination by March 14, 2023 (the nine (9) month anniversary of
the closing of its initial public offering) (the “Extension
Amendment Proposal”) (such amendment to the Charter as set forth in
Annex A is herein referred to as the “Extension
Amendment”); |
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Proposal No. 2 - The Adjournment Proposal – a proposal to
adjourn the special meeting to a later date or dates, if necessary,
to permit further solicitation and vote of proxies if, at the time
of the special meeting, there are not sufficient votes for, or
otherwise in connection with, the approval of the foregoing
proposals (the “Adjournment Proposal”). |
If the stockholders approve the Extension Amendment Proposal, for
each public share that is not redeemed by the stockholders in
connection with the Extension Amendment Proposal (collectively, the
“Remaining Shares”, each, a “Remaining Share”), for each monthly
period, or portion thereof during the Extension, the Company will
deposit $[__] per public share per month in the Trust
Account. If there is (i) no redemption of
the public shares, the Monthly Extension Payment will be $[__],
(ii) 50% redemption of the public shares, the Monthly Extension
Payment will be $[__], and (iii) 80% redemption of the public
shares, the Monthly Extension Payment will be $[__]. The first
Monthly Extension Payment after the approval of the Extension
Amendment Proposal must be made prior to March 14, 2023, while the
second Monthly Extension Payment must be deposited into the Trust
Account prior to 14th of each succeeding month until end of
Extended Termination Date (as defined below). We intend to issue a
press release announcing the deposit of funds promptly after such
funds are deposited into the Trust Account.
Due to the COVID-19 pandemic, Acri Capital will hold the special
meeting virtually. You will be able to attend the special meeting
online, vote and submit your questions during the special meeting
by visiting [__].
If you plan to attend the virtual special meeting, please be sure
to follow instructions found on your proxy card, voting instruction
form or notice.
The Board has fixed the close of business on December 28, 2022 (the
“Record Date”) as the date for determining the stockholders
entitled to receive notice of and vote at the special meeting and
any adjournment thereof. Only holders of record of the Company’s
outstanding shares on that date are entitled to have their votes
counted at the special meeting or any adjournment. On the Record
Date, there were 8,625,000 shares of Class A common stock, par
value $0.0001 per share (“Class A Common Stock”) issued and
outstanding, all of which are public shares and 2,156,250 shares of
Class B common stock, par value $0.0001 per share (“Class B Common
Stock”, together with Class A Common Stock, “Common Stock”) issued
and outstanding.
The purpose of the Extension Amendment is to allow the Company to
have more flexibility to complete the initial business combination.
The Charter of the Company provides that we have until March 14,
2023 to complete an initial business combination. If we anticipate
that we may not be able to consummate an initial business
combination by March 14, 2023, we may, but are not obligated to, if
requested by the Sponsor or its affiliates, extend the time we need
to complete an initial business combination (the “Combination
Period”) up to nine (9) times by an additional one month each time
for a total of up to 9 months (the “Paid Extension Period”) by
depositing $287,212.5 per month ($0.0333 per public share) into our
Trust Account, affording us up to December 14, 2023 to complete our
initial business combination (the “Extended Termination Date”).
Further, the Charter provides that we may modify the time and
substance of the Combination Period by amending the Charter
approved by the affirmative vote of the holders of at least
sixty-five percent (65%) of all then outstanding shares of Common
Stock.
The Board currently believes that there will not be sufficient time
before March 14, 2023 for the Company to complete an initial
business combination. If the Extension Amendment Proposal is
approved, the Company will still have the right to extend the
Combination Period from March 14, 2023 to December 14, 2023 (i.e.,
18 months from the closing of the IPO), provided that the Monthly
Extension Payment of $[__] per public share is deposited into the
Trust Account on or prior to the 14th day of each month commencing
from March until December 2023. In connection with the Extension
Amendment, if there is (i) no redemption of the public shares, the
Monthly Extension Payment will be $[__], (ii) 50% redemption of the
public shares, the Monthly Extension Payment will be $[__], and
(iii) 80% redemption of the public shares, the Monthly Extension
Payment will be $[__]. The Company’s board has determined that,
given the Company’s expenditure of time, efforts and money on
identifying suitable target business and completion of a business
combination, it is in the best interests of its stockholder to
approve the Extension Amendment.
A quorum of 50% of the Company’s shares outstanding as of the
Record Date, present in person (including virtual presence) or by
proxy, will be required to conduct the special meeting. Provided
that there is a quorum, Approval of the Extension Amendment
Proposal requires the affirmative vote of the holders of at least
sixty-five percent (65%) of the then outstanding shares of Common
Stock.
Public stockholders of shares of Common Stock sold in the IPO may
elect to redeem their shares for their pro rata portion of the
funds available in the Trust Account in connection with the
Extension Amendment Proposal (the “Election”), regardless of
whether such public stockholders vote “FOR” or “AGAINST,” or
abstain from voting on, the Extension Amendment Proposal or
otherwise at the special meeting. Public stockholders may make an
Election regardless of whether such public stockholders were
holders as of the Record Date. However, the Company will not
proceed with the Extension Amendment if the redemption of public
shares in connection therewith would cause the Company to have net
tangible assets of less than $5,000,001. In the event that the
redemption of public shares causes the net tangible assets to be
less than $5,000,001 and the Extension Amendment is not proceeded,
the Company will be required to dissolve and liquidate its Trust
Account by returning the then remaining funds in such Trust Account
to the public stockholders. If the Extension Amendment Proposal is
approved by the requisite vote of stockholders (and not abandoned),
the remaining holders of public shares will retain their right to
redeem their public shares for their pro rata portion of the funds
available in the Trust Account upon consummation of an initial
business combination when it is submitted to the stockholders,
subject to any limitations set forth in the Charter and the
limitations contained in related agreements. In addition, public
stockholders who vote for the Extension Amendment Proposal and do
not make the Election would be entitled to redemption if the
Company has not completed a business combination by the Extended
Termination Date. The withdrawal of funds from the Trust Account in
connection with the Election will reduce the amount held in the
Trust Account following the redemption, and the amount remaining in
the Trust Account may be significantly reduced from the
approximately $88.4 million held in the Trust Account as of
September 30, 2022. In such event, we may need to obtain additional
funds to complete a business combination and there can be no
assurance that such funds will be available on terms acceptable to
the parties or at all.
If the Extension Amendment Proposal is not approved, and the
initial business combination not consummated by March 14, 2023 (or
by December 14, 2023 if extended), the Company will (i) cease all
operations except for the purpose of winding up, (ii) as promptly
as reasonably possible but not more than ten business days
thereafter, redeem 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 earned on the funds held in the Trust
Account and not previously released to the Company to pay its taxes
or for working capital purposes (less up to $50,000 of interest to
pay dissolution expenses), divided by the number of then
outstanding public shares, which redemption will completely
extinguish public stockholders’ rights as stockholders (including
the right to receive further liquidating distributions, if any),
subject to applicable law, and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of the
Company’s remaining stockholders and the Board, dissolve and
liquidate, subject in each case to the Company’s obligations under
Delaware law to provide for claims of creditors and the
requirements of other applicable law. Holders of warrants will
receive no proceeds in connection with the liquidation with respect
to such rights or warrants, which will expire worthless. The
Company would expect to pay the costs of liquidation from its
remaining assets outside of the Trust Account or available to the
Company from interest income on the Trust Account balance.
Prior to the IPO, we issued certain shares of Class B Common Stock
(the “Founder Shares”) to Acri Capital Sponsor LLC, a Delaware
limited liability company (the “Sponsor”), our officers, directors,
and/or their designees (collectively with the Sponsor, the
“Founders”). In the IPO, we issued and sold to the public, units,
each consisting of one share of Common Stock and one-half of one
warrant. Our Founders have waived their
redemption rights with respect to their Founder Shares and public
shares in connection with a stockholder vote to approve an
amendment to our Charter with respect to any other provision
relating to stockholders’ rights or pre-initial business
combination activity. Holders of warrants will receive
no proceeds in connection with the liquidation with respect to such
warrants, which will expire worthless.
The Sponsor has agreed that it will be liable to us if and to the
extent any claims by a third party for services rendered or
products sold to us, or by 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 (i) $10.20 per public
share or (ii) such lesser amount per public share held in the Trust
Account as of the date of the liquidation of the Trust Account due
to reductions in the value of the trust assets, in each case net of
the interest which may be withdrawn to pay taxes. This liability
will not apply with respect 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, then the Sponsor will not be
responsible to the extent of any liability for such third party
claims. We have not independently verified whether the Sponsor has
sufficient funds to satisfy its indemnity obligations and believe
that the Sponsor’s only assets are securities of the Company. We
have not asked the Sponsor to reserve for such indemnification
obligations. None of our officers will indemnify us for claims by
third parties including, without limitation, claims by vendors and
prospective target businesses. Nevertheless, we cannot assure you
that the per share distribution from the Trust Account, if the
Company liquidates, will not be less than $10.20, plus interest,
due to unforeseen claims of potential creditors.
Under the Delaware General Corporation Law (the “DGCL”),
stockholders may be held liable for claims by third parties against
a corporation to the extent of distributions received by them in a
dissolution. The pro rata portion of the Trust Account distributed
to our public stockholders upon the redemption of 100% of our
outstanding public shares in the event we do not complete our
initial business combination within the required time period may be
considered a liquidation distribution under Delaware law. If the
corporation complies with certain procedures set forth in Section
280 of the DGCL intended to ensure that it makes reasonable
provision for all claims against it, including a 60-day notice
period during which any third-party claims can be brought against
the corporation, a 90-day period during which the corporation may
reject any claims brought, and an additional 150-day waiting period
before any liquidating distributions are made to stockholders, any
liability of stockholders with respect to a liquidating
distribution is limited to the lesser of such stockholder’s pro
rata share of the claim or the amount distributed to the
stockholder, and any liability of the stockholder would be barred
after the third anniversary of the dissolution.
However, because we will not be complying with Section 280 of the
DGCL, Section 281(b) of the DGCL requires us to adopt a plan, based
on facts known to us at such time that will provide for our payment
of all existing and pending claims or claims that may be
potentially brought against us within the subsequent ten years.
However, because we are a blank check company, rather than an
operating company, and our operations will be limited to searching
for prospective target businesses to acquire, the only likely
claims to arise would be from our vendors (such as lawyers,
investment bankers, etc.) or prospective target businesses.
Approval of the Extension will constitute consent for Acri Capital
to instruct the trustee to (i) remove from the Trust Account an
amount (the “Withdrawal Amount”) equal to the number of public
shares properly redeemed multiplied by the per-share price, equal
to the aggregate amount then on deposit in the Trust Account,
including interest not previously released to us to pay our taxes,
divided by the number of then outstanding public shares and (ii)
deliver to the holders of such redeemed public shares their portion
of the Withdrawal Amount. The remainder of such funds shall remain
in the Trust Account and be available for use by us to complete a
business by the Current Termination Date (or by the Extended
Termination Date, if extended). Holders of public shares who do not
redeem their public shares now will retain their redemption rights
and their ability to vote on any business combination through March
14, 2023 (or up to September 14, 2023).
This proxy statement contains important information about the
special meeting and the proposals. Please read it carefully and
vote your shares.
This proxy statement, including the form of proxy, are first being
mailed to stockholders on or about [__], 2023.
TABLE OF
CONTENTS
QUESTIONS AND
ANSWERS ABOUT THE SPECIAL MEETING
These Questions and Answers are only summaries of the matters they
discuss. They do not contain all of the information that may be
important to you. You should read carefully the entire document,
including the annexes to this proxy statement.
Q. |
Why am I receiving this proxy statement? |
A. This proxy statement and the accompanying
materials are being sent to you in connection with the solicitation
of proxies by the board of directors (the “Board”), for use at the
special meeting of stockholders in lieu of the annual meeting of
stockholders (the “special meeting”) to be held on virtually
January 24, 2022 at 9:00 a.m., Eastern Time, or at any adjournments
or postponements thereof. You will be able to attend the special
meeting online, vote and submit your questions during the special
meeting by visiting [__].
If you plan to attend the virtual special meeting, please be sure
to follow instructions found on your proxy card, voting instruction
form or notice.
This proxy statement summarizes the information that you need to
make an informed decision on the proposals to be considered at the
special meeting.
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Q. |
What is being voted on? |
A. You
are being asked to vote on a proposal to amend Company’s
amended and restated certificate of incorporation (the “Charter”)
to amend the amount of monthly deposit (each, a “Monthly Extension
Payment”) required to be deposited in the trust account (the “Trust
Account”) from $0.0333 for each public share to $[__] for each
public shares for up to nine (9) times if the Company has not
consummated its initial business combination by March 14, 2023 (the
nine (9) month anniversary of the closing of its initial public
offering) (the “Extension Amendment Proposal) (such amendment to
the Charter as set forth in Annex A is herein referred to as the
“Extension Amendment”); |
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Q. |
What is the purpose of the Extension Amendment? |
A. The
purpose of the Extension Amendment is to allow the Company to have
more flexibility to complete the initial business combination.
The
Charter provides that we have until March 14, 2023 (the “Current
Termination Date”) to complete a merger, capital stock exchange,
asset acquisition, stock purchase, recapitalization, reorganization
or other similar business combination with one or more businesses
or entities, or an “initial business combination.” If we anticipate
that we may not be able to consummate an initial business
combination by the Current Termination Date, we may, but are not
obligated to, if requested by our sponsor or its affiliates, extend
the time we need to complete an initial business combination (the
“Combination Period”) up to nine (9) times by an additional one
month each time for a total of up to 9 months (the “Paid Extension
Period”) by depositing $287,212.5 per month ($0.0333 per public
share) into our Trust Account, affording the Company December 14,
2023 to complete our initial business combination the “Extended
Termination Date”).
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If the Extension Amendment Proposal is approved, the Company will
still have the right to extend the Combination Period from March
14, 2023 to December 14, provided that the Monthly Extension
Payment of $[__] per public share is deposited into the Trust
Account. If there is (i) no redemption of the public shares, the
Monthly Extension Payment will be $[__], (ii) 50% redemption of the
public shares, the Monthly Extension Payment will be $[__], and
(iii) 80% redemption of the public shares, the Monthly Extension
Payment will be $[__] . The Company’s board has determined that,
given the Company’s expenditure of time, efforts and money on
identifying suitable target business and completion of a business
combination, it is in the best interests of its stockholder to
approve the Extension Amendment.
If the Extension Amendment Proposal is approved, such approval will
constitute consent for us to remove an amount from the Trust
Account (the “Withdrawal Amount”) equal to the number of public
shares properly redeemed multiplied by the per-share price, equal
to the aggregate amount then on deposit in the Trust Account,
including interest not previously released to us to pay our taxes,
divided by the number of then outstanding public share, and deliver
to the holders of redeemed public shares their portion of the
Withdrawal Amount and retain the remainder of the funds in the
Trust Account for our use in connection with consummating a
business combination on or before the Extended Termination Date. We
will not proceed with the Extension if redemptions of our public
shares cause us to have less than $5,000,001 of net tangible assets
following approval of the Extension Amendment Proposal.
If the Extension Amendment Proposal is approved, the removal of the
Withdrawal Amount from the Trust Account in connection with the
Election (as defined below) will reduce the amount held in the
Trust Account following the Election. We cannot predict the amount
that will remain in the Trust Account if the Extension Amendment is
approved and the amount remaining in the Trust Account may be only
a fraction of the approximately $88.4 million that was in the Trust
Account as of September 30, 2022, which could impact our ability to
consummate a business combination.
If the Extension Amendment Proposal is not approved, and the
initial business combination not consummated by March 14, 2023 (or
by December 14, 2023 if extended), the Company will (i) cease all
operations except for the purpose of winding up, (ii) as promptly
as reasonably possible but not more than ten business days
thereafter, redeem 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 earned on the funds held in the Trust
Account and not previously released to the Company to pay its taxes
or for working capital purposes (less up to $50,000 of interest to
pay dissolution expenses), divided by the number of then
outstanding public shares, which redemption will completely
extinguish public stockholders’ rights as stockholders (including
the right to receive further liquidating distributions, if any),
subject to applicable law, and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of the
Company’s remaining stockholders and the Board, dissolve and
liquidate, subject in each case to the Company’s obligations under
Delaware law to provide for claims of creditors and the
requirements of other applicable law. The Company would expect to
pay the costs of liquidation from its remaining assets outside of
the Trust Account or available to the Company from interest income
on the Trust Account balance.
You are not being asked to vote on any proposed business
combination at this time. If the Extension Amendment Proposal is
approved and you do not elect to redeem your public shares in
connection with the Elections, you will retain the right to vote on
any proposed business combination when and if one is submitted to
stockholders and the right to redeem your public shares for a pro
rata portion from the Trust Account in the event a proposed
business combination is approved and completed or the Company has
not consummated a business combination by the Extended Termination
Date.
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Q. |
Why should I vote for the Extension Amendment
Proposal? |
A. The approval of the Extension Amendment
Proposal is essential to the implementation of the Board’s plan to
amend the Monthly Extension Payment in order to extend the
Combination Period beyond March 14, 2023.
Our Board believes stockholders will benefit from the Company
consummating a business combination and is proposing the Extension
Amendment Proposal to allow us to more flexibility to complete the
initial business combination.
The Charter provides that if our stockholders approve an amendment
to modify A) 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 completion
period or extended completion period, or (B) with respect to
any other provision relating to stockholders’ rights or
pre-initial business combination activity , we will
provide our public stockholders with the opportunity to redeem all
or a portion of their shares of Common Stock upon such approval at
a per-share price, payable in cash, equal to the aggregate amount
then on deposit in the Trust Account, including interest earned on
the funds held in the Trust Account and not previously released to
the Company to pay its taxes or for working capital purposes (less
up to $50,000 of interest to pay dissolution expenses), divided by
the number of then outstanding public shares. We believe that this
provision of the Charter was included to protect our stockholders
from having to sustain their investments for an unreasonably long
period if we failed to find a suitable business combination in the
timeframe contemplated by the Charter. The Board also believes,
however, that it is in the best interests of our stockholders to
provide the Company more flexibility to complete a business
combination.
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Q. |
What is Monthly Extension Payment and how it impacts the
redemption price? |
A. If the stockholder approves the Extension
Amendment Proposal, the Company will have the right to extend the
Combination Period from March 14, 2023 to December 14, 2023,
provided that, for each public share that is not redeemed by the
stockholders in connection with the Extension Amendment Proposal
(collectively, the “Remaining Shares”, each, a “Remaining Share”),
for each monthly period, the Monthly Extension Payment of $[__] per
public share is deposited into the Trust Account, If there is (i)
no redemption of the public shares, the Monthly Extension Payment
will be $[__], (ii) 50% redemption of the public shares, the
Monthly Extension Payment will be $ [__], and (iii) 80% redemption
of the public shares, the Monthly Extension Payment will be $[__].
The first Monthly Extension Payment after the approval of the
Extension Amendment Proposal must be made prior to March 14, 2023,
while the second Extension Payment must be deposited into the Trust
Account prior to 14th of each succeeding month until the end of
Paid Extension Period. We intend to issue a press release
announcing the deposit of Monthly Extension Payment after such
funds are deposited into the Trust Account.
We estimate, based on the value of Trust Account as of the Record
Date, that the per-share price at which public shares may be
redeemed from cash held in the Trust Account will be approximately
$[__] pe share, subject to the actual value of the Trust Account at
the time of the redemption. If the Extension Amendment Proposal is
approved and the Company takes full nine months to complete an
initial business combination, the redemption amount per share at
the meeting for the initial business combination or the Company’s
subsequent liquidation will be approximately $[__], including nine
Monthly Extension Payment. If you are a public shareholder and
elect not to redeem the shares of Common Stock in connection with
the Extension Amendment Proposal, you may be entitled to a
redemption price of $[__] in comparison to the current redemption
amount of $[__] per share (solely based on the redemption price as
of the current Record Date, subject to the actual value of the
Trust Account at the time of the redemption and full nine-month
extension).
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Q. |
How do the Founders intend to vote their
shares? |
A. Prior to the IPO, we issued certain
shares of Class B Common Stock (the “Founder Shares”) to Acri
Capital Sponsor LLC, a Delaware limited liability company (the
“Sponsor”), our officers, directors, and their designees
(collectively with the Sponsor, the “Founders”). The Founders are
expected to vote any Founder Shares and any shares of Class A
Common Stock held in favor of all of the proposals.
Our Founders have agreed to waive their redemption rights with
respect to any Founder Shares and any public shares held by them in
connection with the completion of our initial business combination
and to waive their redemption rights with respect to their Founder
Shares and public shares in connection with a stockholder vote to
approve an amendment to the Charter (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 completion period or extended completion
period, or (B) with respect to any other provision relating to
stockholders’ rights or pre-initial business combination
activity.
On the Record Date, the Founders beneficially owned and were
entitled to vote 2,156,250 shares of Class B Common Stock,
representing approximately 20.0% of our issued and outstanding
Common Stock. The Founders did not beneficially own any public
shares as of such date.
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Q. |
How does the Board of Directors recommend I
vote? |
A. After
careful consideration of all relevant factors, the Board has
determined that the Extension Amendment Proposal is fair to and in
the best interests of the Company and our stockholders. The Board
recommends that you vote or give instruction to vote “FOR” the
Extension Amendment Proposal. The Board also recommends that you
vote “FOR” the Adjournment Proposal. The Adjournment Proposal will
only be put forth for a vote if there are not sufficient votes for,
or otherwise in connection with, the approval of the other
proposals at the special meeting |
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Q. |
Who may vote at the special meeting? |
A. The
Board has fixed the close of business on December 28, 2022 as the
date for determining the stockholders entitled to vote at the
special meeting and any adjournment thereof. Only holders of record
of the Company’s outstanding shares on that date are entitled to
have their votes counted at the special meeting or any
adjournment. |
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Q. |
How many votes must be present to hold the special
meeting? |
A
quorum of 50% of the Company’s shares outstanding as of the Record
Date, present in person (including virtual presence) or by proxy,
will be required to conduct the special meeting. |
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Q. |
How many votes do I have? |
A. You
are entitled to cast one vote at the special meeting for each share
you held as of December 28, 2022, the Record Date for the special
meeting. As of the close of business on the Record Date, there were
10,781,250 outstanding shares, including 8,625,000 outstanding
public shares. |
Q. |
What is the proxy card? |
A. The
proxy card enables you to appoint the representatives named on the
card to vote your shares at the special meeting in accordance with
your instructions on the proxy card. That way, your shares will be
voted whether or not you attend the special meeting. Even if you
plan to attend the special meeting, it is strongly recommended that
you complete and return your proxy card before the special meeting
date, in case your plans change. |
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Q. |
What is the difference between a stockholder of record and a
beneficial owner of shares held in street name? |
A. Stockholder of
Record. If your shares are registered
directly in your name with the Company’s transfer agent, VStock
Transfer, LLC, you are considered the stockholder of record with
respect to those shares, and the Company sent the proxy materials
directly to you.
Beneficial Owner of Shares Held in Street
Name. If your shares are held in an
account at a brokerage firm, bank, broker-dealer, nominee or other
similar organization, then you are the beneficial owner of shares
held in “street name,” and the proxy materials were forwarded to
you by that organization. The organization holding your account is
considered the stockholder of record for purposes of voting at the
special meeting. As a beneficial owner, you have the right to
instruct that organization how to vote the shares held in your
account. Those instructions are contained in a “voting instruction
form” containing information substantially similar to the
information set forth on the proxy card.
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Q. |
What vote is required to approve the Extension Amendment
Proposal? |
A. Approval of the Extension Amendment
Proposal requires the affirmative vote of the holders of at least
sixty-five percent (65%) of the then outstanding shares of Common
Stock. With respect to the Extension Amendment Proposal,
abstentions and broker non-votes will have the same effect as
“AGAINST” votes.
Approval of the Adjournment Proposal requires the affirmative vote
of at least a majority of the votes cast by the stockholders
present in person (including virtual presence) or represented by
proxy at the special meeting. The Adjournment Proposal will only be
put forth for a vote if there are not sufficient votes for, or
otherwise in connection with, the approval of the other proposals
at the special meeting.
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Q. |
What if I don’t want to vote for the Extension Amendment
Proposal? |
A. If you do not want the Extension
Amendment Proposal to be approved, you must abstain, not vote, or
vote against the proposals. You will be entitled to make the
Election to redeem your shares for cash in connection with this
vote regardless of whether you vote for or against, or abstain from
voting on, the Extension Amendment Proposal. If you do not make the
Election, you will retain your right to redeem your public shares
for a pro rata portion of the funds available in the Trust Account
if an initial business combination is approved and completed,
subject to any limitations set forth in the Charter.
In addition, public stockholders who do not make the Election would
be entitled to redemption if the Company has not completed a
business combination by the Combination Period.
If the Extension Amendment Proposal is approved (and not
abandoned) and you exercise your redemption right with respect to
your public shares, you will no longer own your public shares once
the Extension Amendment Proposal becomes effective.
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Q. |
Will you seek any further extensions to liquidate the Trust
Account? |
A. Other
than the Paid Extension Period as described in this proxy
statement, we do not currently anticipate seeking any further
extensions to consummate a business combination. We have provided
the Election for all holders of public shares, including those who
vote for the Extension Amendment Proposal and holders should
receive the funds shortly after the special meeting which is
scheduled for January 24, 2022. Those holders of public shares who
elect not to redeem their shares now shall retain redemption rights
with respect to future business combinations, or, if we do not
consummate a business combination by March 14, 2023, such holders
shall be entitled to their pro rata portion of the Trust
Account on such date. |
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Q. |
What happens if the Extension Amendment Proposal is not
approved? |
A. If the Extension Amendment Proposal is
not approved, and the initial business combination not consummated
by March 14, 2023 (or by December 14, 2023 if extended), the
Company will (i) cease all operations except for the purpose of
winding up, (ii) as promptly as reasonably possible but not more
than ten business days thereafter, redeem 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 earned on
the funds held in the Trust Account and not previously released to
the Company to pay its taxes or for working capital purposes (less
up to $50,000 of interest to pay dissolution expenses), divided by
the number of then outstanding public shares, which redemption will
completely extinguish public stockholders’ rights as stockholders
(including the right to receive further liquidating distributions,
if any), subject to applicable law, and (iii) as promptly as
reasonably possible following such redemption, subject to the
approval of the Company’s remaining stockholders and the Board,
dissolve and liquidate, subject in each case to the Company’s
obligations under Delaware law to provide for claims of creditors
and the requirements of other applicable law. The Company would
expect to pay the costs of liquidation from its remaining assets
outside of the Trust Account or available to the Company from
interest income on the Trust Account balance.
The Founders have waived their rights to liquidating distributions
from the Trust Account with respect to any Founder Shares held by
them if we fail to complete our initial business combination within
the Combination Period, although they will be entitled to
liquidating distributions from the Trust Account with respect to
any public shares they hold if we fail to complete our initial
business combination within the Combination Period
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Q. |
If the Extension Amendment Proposal is approved, what happens
next? |
A. If the Extension Amendment Proposal is
approved, we will file an amendment to the Charter with the
Secretary of State of the State of Delaware in the form of Annex
A hereto to amend the Monthly Extension Payment. We will remain
a reporting company under the Exchange Act, and our units, Class A
Common Stock, and warrants will remain publicly traded. We will
then continue to work to consummate a business combination by March
14, 2023 (or by December 14, 2023 if extended).
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If the Extension Amendment is
implemented, the removal of the Withdrawal Amount from the Trust
Account in connection with the Election will reduce the amount held
in the Trust Account, and the percentage interest of the Company’s
shares held by the Founders will increase. We cannot predict the
amount that will remain in the Trust Account if the Extension
Amendment is implemented, and the amount remaining in the Trust
Account may be only a fraction of the amount that was in the Trust
Account as of September 30, 2022. However, we will not proceed with
the Extension Amendment if the number of redemptions of our public
shares causes us to have less than $5,000,001 of net tangible
assets following approval of the Extension Amendment Proposal. |
Q. |
Would I still be able to vote on any business combination if I
exercise my redemption rights? |
A. Unless
you elect to redeem all of your shares, you will be able to vote on
any business combination when it is submitted to stockholders. If
you disagree with the business combination, you will retain your
right to redeem your public shares upon consummation of a business
combination in connection with the stockholder vote to approve the
business combination, subject to any limitations set forth in the
charter. |
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Would I still be able to exercise my redemption rights if I vote
against or abstain from voting on the Extension Amendment
Proposal? |
A. Public
stockholders may elect to redeem their shares for a pro rata
portion of the funds available in the Trust Account in connection
with the Extension Amendment Proposal regardless of how such public
stockholders vote in regard to the Extension Amendment Proposal or
otherwise at the special meeting. However, the Company will not
proceed with the Extension Amendment if the redemption of public
shares in connection therewith would cause the Company to have net
tangible assets of less than $5,000,001. In the event that the
redemption of public shares causes the net tangible assets to be
less than $5,000,001 and the Extension Amendment is not proceeded,
the Company will be required to dissolve and liquidate its Trust
Account by returning the then remaining funds in the Trust Account
to the public stockholders. Public stockholders are not required to
affirmatively vote either for or against the Extension Amendment
Proposal in order to redeem their shares for a pro rata portion of
the funds held in the Trust Account. This means that public
stockholders who hold public shares on or before such date that is
two business days before the special meeting may elect to redeem
their shares whether or not they are holders of the Record Date,
and whether or not they vote for the Extension Amendment Proposal
or even abstain from voting on. You may tender your shares by
either delivering your share certificate to the transfer agent or
by delivering your shares electronically using the depository trust
company’s DWAC (deposit withdrawal at custodian) system. If you
hold the shares in street name, you will need to instruct the
account executive at your bank or broker to withdraw the shares
from your account in order to exercise your redemption
rights. |
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Q. |
What is the deadline for voting my shares? |
A. If
you are a stockholder of record, you may mark, sign, date and
return the enclosed proxy card, which must be received before the
special meeting, in order for your shares to be voted at the
special meeting. If you are a beneficial owner, please read the
voting instruction form provided by your bank, broker, trust or
other nominee for information on the deadline for voting your
shares. |
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Q. |
Is my vote confidential? |
A. Proxies,
ballots and voting tabulations identifying stockholders are kept
confidential and will not be disclosed except as may be necessary
to meet legal requirements. |
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Q. |
Where will I be able to find the voting results of the special
meeting? |
A. We
will announce preliminary voting results at the special meeting.
The final voting results will be tallied by the inspector of
election and published in the Company’s Current Report on Form 8-K,
which the Company is required to file with the SEC within four
business days following the special meeting. |
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Q. |
Who bears the cost of soliciting proxies? |
A. The
Company will bear the cost of soliciting proxies in the
accompanying form and will reimburse brokerage firms and others for
expenses involved in forwarding proxy materials to beneficial
owners or soliciting their execution. In addition to solicitations
by mail, the Company, through its directors and officers, may
solicit proxies in person, by telephone or by electronic means.
Such directors and officers will not receive any special
remuneration for these efforts. We have retained Advantage Proxy,
Inc. to assist us in soliciting proxies for a nominal fee plus
reasonable out-of-pocket expenses. |
Q. |
How can I submit my proxy or voting instruction
form? |
A. Whether you are a stockholder of record
or a beneficial owner, you may direct how your shares are voted
without attending the special meeting. If you are a stockholder of
record, you may submit a proxy to direct how
your shares are voted at the special meeting, or at any adjournment
or postponement thereof. Your proxy can be submitted by completing,
signing and dating the proxy card you received with this proxy
statement and then mailing it in the enclosed prepaid envelope. If
you are a beneficial owner, you must submit voting instructions to
your bank, broker, trust or other nominee in order to authorize how
your shares are voted at the special meeting, or at any adjournment
or postponement thereof. Please follow the instructions provided by
your bank, broker, trust or other nominee.
Submitting a proxy or voting instruction form will not affect your
right to vote in person should you decide to attend the special
meeting. However, if your shares are held in the “street name” of
your broker, bank or another nominee, you must obtain a proxy from
the broker, bank or other nominee to vote in person at the special
meeting. That is the only way we can be sure that the broker, bank
or nominee has not already voted your shares.
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Q. |
How do I change my vote? |
A. If you have submitted a proxy to vote
your shares and wish to change your vote, you may do so by
delivering a later-dated, signed proxy card to Advantage Proxy,
Inc., our proxy solicitor, prior to the date of the special meeting
or by voting in person at the special meeting. Attendance at the
special meeting alone will not change your vote. You also may
revoke your proxy by sending a notice of revocation to: Advantage
Proxy, Inc., P.O. Box 13581, Des Moines, WA 98198.
If your shares are held of record by a brokerage firm, bank or
other nominee, you must instruct your broker, bank or other nominee
that you wish to change your vote by following the procedures on
the voting instruction form provided to you by the broker, bank or
other nominee. If your shares are held in street name, and you wish
to attend the special meeting and vote at the special meeting, you
must bring to the special meeting a legal proxy from the broker,
bank or other nominee holding your shares, confirming your
beneficial ownership of the shares and giving you the right to vote
your shares.
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Q. |
How are votes counted? |
A. Votes will be counted by the inspector of
election appointed for the meeting, who will separately count
“FOR”, “AGAINST” or “WITHHOLD” votes, as well as abstentions and
broker non-votes.
Approval of the Extension Amendment Proposal requires the
affirmative vote of the holders of at least sixty-five percent
(65%) of all then outstanding shares of Common Stock.
Approval of the Adjournment Proposal requires the affirmative vote
of at least a majority of the votes cast by the stockholders
present in person (including virtual presence) or represented by
proxy at the special meeting. The Adjournment Proposal will only be
put forth for a vote if there are not sufficient votes for, or
otherwise in connection with, the approval of the other proposals
at the special meeting.
With respect to the Extension Amendment Proposal, abstentions and
broker non-votes will have the same effect as “AGAINST” votes.
Abstentions will be counted in connection with the determination of
whether a valid quorum is established.
If your shares are held by your broker as your nominee (that is, in
“street name”), you may need to obtain a proxy form from the
institution that holds your shares and follow the instructions
included on that form regarding how to instruct your broker to vote
your shares. If you do not give instructions to your broker, your
broker can vote your shares with respect to “discretionary” items,
but not with respect to “non-discretionary” items. For
discretionary items your broker has the discretion to vote shares
held in street name in the absence of your voting instructions. On
non-discretionary items for which you do not give your broker
instructions, the shares will be treated as broker
non-votes. The Extension Amendment Proposal is considered as a
non-discretionary item.
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Q. |
If my shares are held in “street name,” will my broker
automatically vote them for me? |
A. With
respect to the Extension Amendment Proposal, your broker can vote
your shares only if you provide them with instructions on how to
vote. You should instruct your broker to vote your shares. Your
broker can tell you how to provide these instructions. |
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Q. |
What is a quorum requirement? |
A. A quorum of stockholders is necessary to
hold a valid meeting. A quorum will be present with regard to each
of the proposals if at least a majority of the outstanding shares
of Common Stock on the record date are represented by stockholders
present at the meeting or by proxy at the special meeting.
Your shares will be counted towards the quorum only if you submit a
valid proxy (or one is submitted on your behalf by your broker,
bank or other nominee) or if you vote in person at the special
meeting. Abstentions and broker non-votes will be counted towards
the quorum requirement. If there is no quorum, the chairman of the
special meeting may adjourn the special meeting to another
date.
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Q. |
Who can vote at the special meeting? |
A. Only holders of record of Common Stock at
the close of business on December 28, 2022, the Record Date, are
entitled to have their vote counted at the special meeting and any
adjournments or postponements thereof. On the Record Date,
10,781,250 shares of Common Stock, including 8,625,000 public
shares, were outstanding and entitled to vote.
Stockholder of Record: Shares Registered in Your Name. If on
the record date your shares were registered directly in your name
with our transfer agent, VStock Transfer, LLC, then you are a
stockholder of record. As a stockholder of record, you may vote in
person at the special meeting or vote by proxy. Whether or not you
plan to attend the special meeting in person, we urge you to fill
out and return the enclosed proxy card to ensure your vote is
counted.
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Beneficial Owner:
Shares Registered in the Name of a Broker or Bank. If on the
Record Date your shares were held, not in your name, but rather in
an account at a brokerage firm, bank, dealer, or other similar
organization, then you are the beneficial owner of shares held in
“street name” and these proxy materials are being forwarded to you
by that organization. As a beneficial owner, you have the right to
direct your broker or other agent on how to vote the shares in your
account. You are also invited to attend the special meeting.
However, since you are not the stockholder of record, you may not
vote your shares in person at the special meeting unless you
request and obtain a valid proxy from your broker or other
agent. |
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Q. |
What interests do the Founders have in the approval of the
proposals? |
A. The
Founders have interests in the proposals that may be different
from, or in addition to, your interests as a stockholder. These
interests include ownership of Founder Shares and the possibility
of future compensatory arrangements. See the section entitled
“Proposal No.1 – The Extension Amendment Proposal—Interests of
the Founders.” |
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Q. |
What if I object to the Extension Amendment Proposal? Do I have
appraisal rights? |
A. If
you do not want the Extension Amendment Proposal to be approved,
you must vote against such proposals, abstain from voting, or
refrain from voting. If holders of public shares do not elect to
redeem their public shares, such holders shall retain redemption
rights in connection with any future business combination we
propose. You will still be entitled to make the Election if you
vote against, abstain or do not vote on the Extension Amendment
Proposal. In addition, public stockholders who do not make the
Election would be entitled to redemption if we have not completed a
business combination by March 14, 2023. Our stockholders do not
have appraisal rights in connection with the Extension Amendment
Proposal under the DGCL. |
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Q. |
What happens to our warrants if the Extension Amendment Proposal is
not approved? |
A. If
the Extension Amendment Proposal is not approved, and the initial
business combination not consummated by March 14, 2023 (or by
December 14, 2023 if extended), the Company will (i) cease all
operations except for the purpose of winding up, (ii) as promptly
as reasonably possible but not more than ten business days
thereafter, redeem 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 earned on the funds held in the Trust
Account and not previously released to the Company to pay its taxes
or for working capital purposes (less up to $50,000 of interest to
pay dissolution expenses), divided by the number of then
outstanding public shares, which redemption will completely
extinguish public stockholders’ rights as stockholders (including
the right to receive further liquidating distributions, if any),
subject to applicable law, and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of the
Company’s remaining stockholders and the Board, dissolve and
liquidate, subject in each case to the Company’s obligations under
Delaware 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 in the event the Company winds
up. |
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Q. |
What happens to our warrants if the Extension Amendment Proposal is
approved? |
A. If
the Extension Amendment Proposal is approved, we will continue our
efforts to consummate a business combination until end of the Paid
Extension Period, and will retain the blank check company
restrictions previously applicable to us. The warrants will remain
outstanding in accordance with their terms. |
Q. |
What do I need to do now? |
A. We
urge you to read carefully and consider the information contained
in this proxy statement, including the annexes, and to consider how
the proposals will affect you as our stockholder. You should then
vote as soon as possible in accordance with the instructions
provided in this proxy statement and on the enclosed proxy
card. |
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Q. |
How do I vote? |
A. If you are a holder of record of Common
Stock, you may vote in person at the special meeting or by
submitting a proxy for the special meeting. Whether or not you plan
to attend the special meeting in person, we urge you to vote by
proxy to ensure your vote is counted. You may submit your proxy by
completing, signing, dating and returning the enclosed proxy card
in the accompanying pre-addressed postage paid envelope. You may
still attend the special meeting and vote in person if you have
already voted by proxy.
If your shares of Common Stock are held in “street name” by a
broker or other agent, you have the right to direct your broker or
other agent on how to vote the shares in your account. You are also
invited to attend the special meeting. However, since you are not
the stockholder of record, you may not vote your shares in person
at the special meeting unless you request and obtain a valid proxy
from your broker or other agent.
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How do I redeem my shares of Common Stock? |
A. If the Extension Amendment is
implemented, each public stockholder may seek to redeem such
stockholder’s public shares for its pro rata portion of the funds
available in the Trust Account, less any income taxes owed on such
funds but not yet paid. You will also be able to redeem your public
shares in connection with any stockholder vote to approve a
proposed business combination, or if the Company has not
consummated a business combination by March 14, 2023.
In connection with tendering your shares for redemption, you must
elect either to physically tender your share certificates to VStock
Transfer, LLC, the Company’s transfer agent, at 18 Lafayette Place,
Woodmere, NY 11598, Attn: Chief Executive Officer, at least two
business days prior to the special meeting or to deliver your
shares to the transfer agent electronically using The Depository
Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System,
which election would likely be determined based on the manner in
which you hold your shares.
Certificates that have not been tendered in accordance with these
procedures at least two business days prior to the special meeting
will not be redeemed for cash. Any request for redemption, once
made by a public stockholder, may not be withdrawn once submitted
to us unless our Board determines (in its sole discretion) to
permit the withdrawal of such redemption request (which they may do
in whole or in part). In addition, if you deliver your shares for
redemption to the transfer agent and later decide prior to the
special meeting not to redeem your shares, you may request that the
transfer agent return the shares (physically or electronically).
You may make such request by contacting our transfer agent at the
address listed above.
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Q. |
What should I do if I receive more than one set of voting
materials? |
A. You
may receive more than one set of voting materials, including
multiple copies of this proxy statement and multiple proxy cards or
voting instruction cards, if your shares are registered in more
than one name or are registered in different accounts. For example,
if you hold your shares in more than one brokerage account, you
will receive a separate voting instruction card for each brokerage
account in which you hold shares. Please complete, sign, date and
return each proxy card and voting instruction card that you receive
in order to cast a vote with respect to all of your
shares. |
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Q. |
Who can help answer my questions? |
A. If you have questions about the proposals
or if you need additional copies of the proxy statement or the
enclosed proxy card, you should contact our proxy solicitor at:
Advantage Proxy, Inc.
P.O. Box 13581
Des Moines, WA 98198
Attn: Karen Smith
Toll Free: (877) 870-8565
Collect: (206) 870-8565
Email: ksmith@advantageproxy.com
If you are a holder of public shares and you intend to seek
redemption of your shares, you will need to deliver your share
certificates (if any) and other redemption forms (either physically
or electronically) to our transfer agent at the address below at
least one (1) business day prior to the vote at the extraordinary
general meeting. If you have questions regarding the certification
of your position or delivery of your subunit certificates (if any)
and other redemption forms, please contact:
VStock Transfer, LLC
18 Lafayette Place,
Woodmere, NY 11598
Attn: Chief Executive Officer
You may also obtain additional information about the Company from
documents filed with the SEC by following the instructions in the
section entitled “Where You Can Find More Information.”
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FORWARD-LOOKING
STATEMENTS
This
proxy statement and the documents to which we refer you in this
proxy statement contain “forward-looking statements” as that term
is defined by the Private Securities Litigation Reform Act of 1995,
which we refer to as the Act, and the federal securities laws. Any
statements that do not relate to historical or current facts or
matters are forward-looking statements. You can identify some of
the forward-looking statements by the use of forward-looking words
such as “anticipate,” “believe,” “plan,” “estimate,” “expect,”
“intend,” “should,” “may” and other similar expressions, although
not all forward-looking statements contain these identifying words.
There can be no assurance that actual results will not materially
differ from expectations. Such statements include, but are not
limited to, any statements relating to our ability to consummate a
business combination, and any other statements that are not
statements of current or historical facts. These forward-looking
statements are based on information available to the Company as of
the date of the proxy materials and current expectations, forecasts
and assumptions and involve a number of risks and uncertainties.
Accordingly, forward-looking statements should not be relied upon
as representing the Company’s views as of any subsequent date and
the Company undertakes no obligation to update forward-looking
statements to reflect events or circumstances after the date they
were made.
These
forward-looking statements involve a number of known and unknown
risks and uncertainties or other assumptions that may cause actual
results or performance to be materially different from those
expressed or implied by these forward-looking statements. Some
factors that could cause actual results to differ
include:
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the
ability of the Company to effect the Extension Amendment or
consummate a business combination; |
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unanticipated
delays in the distribution of the funds from the Trust
Account; |
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claims
by third parties against the Trust Account; or |
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the
ability of the Company to finance and consummate a business
combination. |
You
should carefully consider these risks, in addition to the risk
factors set forth in our other filings with the SEC, including the
final prospectus related to our IPO dated June 9, 2022
(Registration No. 333-263477) and our other filings with the SEC.
The documents we file with the SEC, including those referred to
above, also discuss some of the risks that could cause actual
results to differ from those contained or implied in the
forward-looking statements. See “Where You Can Find More
Information” for additional information about our
filings.
BACKGROUND
Our
Company
We
are a blank check company formed as a Delaware corporation for the
purpose of effecting a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization, or similar business
combination with one or more businesses, which we refer to
throughout this report as our initial business
combination.
On
June 14, 2022, we completed our initial public offering (the “IPO”)
of 8,625,000 units, which included 1,125,000 units issued upon the
full exercise of the underwriters’ over-allotment option. Each unit
consists of one share of Class A Common Stock and one-half of one
warrant. Each whole warrant entitles the holder thereof to purchase
one share of Class A Common Stock at a price of $11.50 per share.
The units were sold at an offering price of $10.00 per unit,
generating gross proceeds of $86,250,000.
Substantially concurrently with the closing of the IPO, the Company
completed the private sale of 5,240,000 warrants (“Private
Warrants”) to the Company’s sponsor, Acri Capital Sponsor LLC (the
“Sponsor”), with each whole warrant entitling the holder thereof to
purchase one share of Class A Common Stock at an exercise price of
$11.50 per share, at a purchase price of $1.00 per Private
Placement Warrant, generating gross proceeds to the Company of
$5,240,000 (the “Private Placement”). The Private Warrants are
identical to the warrants sold as part of the units in the IPO,
except that the holders have agreed not to transfer, assign or sell
any of the Private Warrants (except to certain permitted
transferees) until 30 days after the completion of the Company’s
initial business combination.
A total of $87,975,000 (or $10.20 per unit), comprised of
$86,250,000 of the proceeds from the IPO (which amounts includes
$2,587,500 of the underwriter’s deferred underwriting fee pursuant
to the Underwriting Agreement), and $1,725,000 of the proceeds from
the Private Warrants, were placed in a U.S.-based Trust Account
maintained by Wilmington Trust, acting as trustee. Except with
respect to interest earned on the funds in the Trust Account that
may be released to the Company to pay its franchise and income
taxes and expenses relating to the administration of the Trust
Account, the proceeds from the IPO and the Private Placement held
in the trust account will not be released until the earliest of (a)
the completion of the Company’s initial business combination, (b)
the redemption of any public shares properly tendered in connection
with a shareholder vote to amend the Company’s Amended and Restated
Certificate of Incorporation to modify the substance or timing of
its obligation to allow redemption in connection with its initial
business combination or redeem 100% of its public shares if the
Company does not complete its initial business combination within
18 months from the closing of the IPO, and (c) the redemption of
all of the Company’s public shares if it is unable to complete its
business combination within 9 months (or up to 18 months from the
consummation of this offering if we extend the period of time to
consummate a business combination as described in more detail in
the Prospectus) from the closing of the IPO, subject to applicable
law.
Our
management has broad discretion with respect to the specific
application of the net proceeds of the IPO and the sale of Private
Warrant, although substantially all the net proceeds are intended
to be applied generally towards consummating a business
combination.
Since
our IPO, our sole business activity has been identifying and
evaluating suitable acquisition transaction candidates. We
presently have no revenue and have had losses since inception from
incurring formation and operating costs. We have relied upon the
sale of our securities and loans from the Sponsor to fund our
operations.
As of
September 30, 2022, $949,982 of cash and prepaid expenses was held
outside of the Trust Account and was available for working capital
purposes. Interest earned on the Trust Account balance through
September 30, 2022 available to be released to us for the payment
of tax obligations amounted to $415,041. As of September 30, 2022
we had $88,390,014 in the Trust Account.
The
mailing address of our principal executive office is 13284 Pond
Springs Rd, Ste 405, Austin, Texas 78729, and our telephone number
is 512-666-1277.
Extension
Payments
The Company’s IPO prospectus (File No. 333-263477) (the “IPO
Prospectus”) dated June 9, 2022 and the Charter provide that we
have until March 14, 2023 to complete a merger, capital stock
exchange, asset acquisition, stock purchase, recapitalization,
reorganization or other similar business combination with one or
more businesses or entities. If we anticipate that we may not be
able to consummate the initial business combination by March 14,
2023, we may, but are not obligated to, if requested by the Sponsor
or its affiliates, extend date up to nine (9) times by an
additional one month each time for a total of up to December 14,
2023 by depositing $287,212.5 per month ($0.0333 per public share)
into our Trust Account, to complete our initial business
combination. Further, the IPO Prospectus and the Charter provide
that the Company may modify the Current Termination Date by
amending the Charter approved by the affirmative vote of the
holders of at least sixty-five percent (65%) of all then
outstanding shares of Common Stock.
If
the Extension Amendment Proposal is not Approved
If
the Extension Amendment Proposal is not approved and a business
combination is not consummated by March 14, 2023 (or up to by
December 14, 2023, if extended), the Company will (i) cease all
operations except for the purpose of winding up, (ii) as promptly
as reasonably possible but not more than ten business days
thereafter, redeem 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 earned on the funds held in the Trust
Account and not previously released to the Company to pay its taxes
or for working capital purposes (less up to $50,000 of interest to
pay dissolution expenses), divided by the number of then
outstanding public shares, which redemption will completely
extinguish public stockholders’ rights as stockholders (including
the right to receive further liquidating distributions, if any),
subject to applicable law, and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of the
Company’s remaining stockholders and the Board, dissolve and
liquidate, subject in each case to the Company’s obligations under
Delaware law to provide for claims of creditors and the
requirements of other applicable law. In connection with our
redemption of 100% of our outstanding public shares for a portion
of the funds held in the Trust Account, each holder will receive a
full pro rata portion of the amount then in the Trust Account (less
the net interest earned thereon to pay dissolution expenses), plus
any pro rata interest earned on the funds held in the Trust Account
and not previously released to us for payment of taxes due on such
funds. Holders of warrants will receive no proceeds in connection
with the liquidation with respect to such rights or warrants, which
will expire worthless. The Company would expect to pay the costs of
liquidation from its remaining assets outside of the Trust Fund or
available to the Company from interest income on the Trust
Account’s balance.
If
the Extension Amendment Proposal is Approved
Under
the terms of the proposed Extension Amendment, public stockholders
may make the Election.
If
the Extension Amendment Proposal is approved by holders of
sixty-five percent (65%) or more of all then outstanding shares of
the Common Stock, the Company will file amended Charter with the
Secretary of State of the State of Delaware in the form of Annex A
hereto. The Company will remain a reporting company under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)
and its units, Class A Common Stock and warrants will remain
publicly traded. The Company will then continue to work to
consummate a business combination within the Combination
Period.
If the Extension Amendment Proposal is approved, the Company will
still have the right to extend the time for the Company to complete
its initial business combination (the “Combination Period”) from
March 14, 2023 up to December 14, 2023 (i.e., 18 months from the
closing of the IPO), provided that the Monthly Extension Payment of
$[__] per public share is deposited into the Trust Account. If
there is (i) no redemption of the public shares, the Monthly
Extension Payment will be $[__], (ii) 50% redemption of the public
shares, the Monthly Extension Payment will be $ [__], and (iii) 80%
redemption of the public shares, the Monthly Extension Payment will
be $[__]. The Company’s board has determined that, given the
Company’s expenditure of time, efforts and money on identifying
suitable target business and completion of a business combination,
it is in the best interests of its stockholder to approve the
Extension Amendment. The first Monthly Extension Payment after the
approval of the Extension Amendment Proposal must be made prior to
March 14, 2023, while the second Monthly Extension Payment must be
deposited into the Trust Account prior to 14th of each succeeding
month up to December 14, 2023. We intend to issue a press release
announcing the deposit of funds promptly after such funds are
deposited into the Trust Account.
You
are not being asked to vote on any proposed business combination at
this time. If the Extension Amendment Proposal is approved and you
do not elect to have your public shares redeemed now, you will
retain the right to vote on any proposed business combination when
and if one is submitted to stockholders and the right to redeem
your public shares for a pro rata portion of the Trust Account in
the event a proposed business combination is approved and completed
or the Company has not consummated a business combination within
the Combination Period.
If
the Extension Amendment Proposal is approved (and not abandoned),
the removal of the Withdrawal Amount in connection with the
redemption from the Trust Account may significantly reduce the
amount remaining in the Trust Account and increase the percentage
interest of the Company’s shares held by the Founders.
Additionally,
the Company’s Charter provides that the Company shall not
consummate any business combination if the redemption of public
shares in connection therewith would cause the Company to have net
tangible assets of less than $5,000,001, which could be impacted by
the reduction in the Trust Account.
Possible
Claims Against and Impairment of the Trust Account
In
considering the Extension Amendment Proposal, the Company’s
stockholders should be aware that if the Extension Amendment
Proposal is approved (and not abandoned), the Company will incur
additional expenses in seeking to complete an initial business
combination, in addition to expenses incurred in proposing the
Extension Amendment. The Founders and/or their affiliate may also
advance or fund the Company on as needed basis for working capital
or payment for expenses incurred. Additionally, if the stockholders
approve the Extension Amendment Proposal, for each remaining share
for each monthly period, or portion thereof during the Combination
Period, the Company will deposit the Monthly Extension Deposit into
the Trust Account. The Monthly Extension Deposit would be made in
the form of a loan. If the
Company complete its initial business combination, the Company
would repay such loaned amounts out of the proceeds of the Trust
Account. In addition, such extension funding loans may be
convertible into Private Warrants upon the closing of the Company’s
initial business combination at $1.00 per warrant at the
option of the lender. If we do not have sufficient funds
available to conduct the normal operations of the business or to
consummate an initial business combination, we will need to seek
additional working capital from the Founders and/or their
affiliates for these purposes. If we consummate an initial business
combination, we would repay such loaned amounts. In the event that
the initial business combination does not close, we may use a
portion of the working capital held outside the Trust Account to
repay such loaned amounts but no proceeds from our Trust Account
would be used for such repayment, other than interest on such
proceeds.
If the Company is unable to complete a business combination within
the required time period, the Sponsor will be liable to the extent
necessary to ensure that the amounts in the Trust Account are not
reduced below (i) $10.20 per public share or (ii) such
lesser amount per public share held in the Trust Account as of the
date of the liquidation of the Trust Account, due to reductions in
value of the trust assets, in each case net of the amount of
interest withdrawn to pay taxes and will not be liable as to any
claims under our indemnity of the underwriters of the IPO 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, our Sponsor will not be
responsible to the extent of any liability for such
third-party claims. We cannot assure you, however, that, the
Sponsor would be able to satisfy those obligations. None of our
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 the lesser of (i) $10.20 per public share or (ii)
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 the 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 the Sponsor to enforce its indemnification obligations.
While we currently expect that our independent directors would take
legal action on our behalf against the 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
on our behalf, the amount of funds in the Trust Account available
for distribution to our public stockholders may be reduced below
$10.20 per share. You should read this proxy statement carefully
for more information concerning this possibility and other
consequences of the adoption of the Extension Amendment
Proposal.
The
Special Meeting
Date,
Time and Place. The special meeting of stockholders will be held on
January 24, 2023 at 9:00 a.m., Eastern Time, virtually at
[__].
If
you plan to attend the virtual online special meeting, please be
sure to follow instructions found on your proxy card, voting
instruction form or notice.
Voting
Power; Record Date. You will be entitled to vote or direct
votes to be cast at the special meeting, if you owned shares of our
Common Stock at the close of business on December 28, 2022, the
Record Date for the special meeting. You will have one vote per
proposal for each share you owned at that time. Our warrants do not
carry voting rights.
Votes
Required. Approval of the Extension Amendment Proposal requires
the affirmative vote of at least 65% of our outstanding shares of
Common Stock. Approval of the Adjournment Proposal requires the
affirmative vote of at least a majority of the votes cast by the
stockholders present in person (including virtual presence) or
represented by proxy at the special meeting. The Adjournment
Proposal will only be put forth for a vote if there are not
sufficient votes for, or otherwise in connection with, the approval
of the other proposals at the special meeting.
With
respect to the Extension Amendment Proposal, abstentions and broker
non-votes will have the same effect as “AGAINST” votes. Abstentions
will be counted in connection with the determination of whether a
valid quorum is established.
At
the close of business on the Record Date, there were 10,781,250
outstanding shares of Common Stock, including 8,625,000 public
shares, each of which entitles its holder to cast one vote per
proposal.
If
you do not want the Extension Amendment Proposal approved, you
should vote against the proposals or abstain from voting on the
proposals. If you want to obtain your pro rata portion of
the Trust Account in the event the Extension Amendment is
implemented, which will be paid shortly after the special meeting
scheduled for January 24, 2023, you must demand redemption of your
shares. Holders of public shares may redeem their public shares
regardless of whether they vote for or against, or abstain from
voting on, the Extension Amendment Proposal.
Proxies;
Board Solicitation. Your proxy is being solicited by the Board
on the proposals being presented to stockholders at the special
meeting to approve the proposals. No recommendation is being made
as to whether you should elect to redeem your shares. Proxies may
be solicited in person or by telephone. If you grant a proxy, you
may still revoke your proxy and vote your shares in person at the
special meeting.
We
have retained Advantage Proxy, Inc. to aid in the solicitation of
proxies. Advantage Proxy, Inc. will receive a fee of approximately
$10,000, as well as reimbursement for certain costs and
out-of-pocket expenses incurred by them in connection with their
services, all of which will be paid by us. In addition, our
officers and directors may solicit proxies by mail, telephone,
facsimile, and personal interview, for which no additional
compensation will be paid, though they may be reimbursed for their
out-of-pocket expenses. We will bear the cost of preparing,
assembling and mailing the enclosed form of proxy, this proxy
statement and other material which may be sent to stockholders in
connection with this solicitation. We may reimburse brokerage firms
and other nominee holders for their reasonable expenses in sending
proxies and proxy material to the beneficial owners of our
shares.
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
The
following is a discussion of the material U.S. federal income tax
considerations for holders of the Company’s Common Stock that elect
to have their Common Stock redeemed for cash if the acquisition is
completed. This summary is based upon the Code, the regulations
promulgated by the U.S. Treasury Department, current administrative
interpretations and practices of the Internal Revenue Service (the
“IRS”), and judicial decisions, all as currently in effect and all
of which are subject to differing interpretations or to change,
possibly with retroactive effect. No assurance can be given that
the IRS would not assert, or that a court would not sustain, a
position contrary to any of the tax considerations described below.
No advance ruling has been or will be sought from the IRS regarding
any matter discussed in this summary. This summary does not discuss
the impact that U.S. state and local taxes and taxes imposed by
non-U.S. jurisdictions could have on the matters discussed in this
summary. This summary does not purport to discuss all aspects of
U.S. federal income taxation that may be important to a particular
stockholder in light of its investment or tax circumstances or to
stockholders subject to special tax rules, such as:
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financial
institutions or financial services entities; |
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dealers
or traders subject to a mark-to-market method of tax accounting
with respect to shares of Common Stock; |
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persons
holding Common Stock as part of a “straddle,” hedge, integrated
transaction or similar transaction; |
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U.S.
Holders (as defined below) whose functional currency is not the
U.S. dollar; |
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“specified
foreign corporations” (including “controlled foreign
corporations”), “passive foreign investment companies” and
corporations that accumulate earnings to avoid U.S. federal income
tax; |
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U.S.
expatriates or former long-term residents of the United
States; |
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governments
or agencies or instrumentalities thereof; |
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regulated
investment companies (RICs) or real estate investment trusts
(REITs); |
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persons
that directly, indirectly or constructively own five percent or
more (by vote or value) of Common Stock; |
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persons
who received their shares of Common Stock pursuant to an exercise
of employee share options, in connection with employee share
incentive plans or otherwise as compensation; |
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the
Sponsor or its affiliates, officers or directors; |
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partnerships
(including entities or arrangements treated as partnerships for
U.S. federal income tax purposes); and |
If a
partnership (including an entity or arrangement treated as a
partnership for U.S. federal income tax purposes) holds Common
Stock, the U.S. federal income tax treatment of the partners in the
partnership will generally depend on the status of the partners and
the activities of the partnership. Partnerships and their partners
should consult their tax advisors with respect to the tax
consequences to them of redemption. This summary assumes that
stockholders hold Common Stock as capital assets within the meaning
of Section 1221 of the Code, which generally means as property held
for investment and not as a dealer or for sale to customers in the
ordinary course of the stockholder’s trade or business.
WE
URGE HOLDERS OF COMMON STOCK CONTEMPLATING EXERCISE OF THEIR
REDEMPTION RIGHTS TO CONSULT THEIR TAX ADVISOR REGARDING THE U.S.
FEDERAL, STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX
CONSEQUENCES THEREOF.
Treatment
of Redemption of Common Stock
In
the event that a holder’s Common Stock is redeemed pursuant to the
exercise of its redemption right in connection with the stockholder
vote regarding the Extension Amendment Proposal the treatment of
the transaction for U.S. federal income tax purposes will depend on
whether the redemption qualifies as a sale of Common Stock under
Section 302 of the Code. If the redemption qualifies as a sale of
Common Stock, U.S. Holders will be treated as described under
“U.S. Holders — Taxation of Redemption Treated as an Exchange of
Common Stock” below and Non-U.S. Holders will be treated as
described under “Non-U.S. Holders — Taxation of Redemption
Treated as an Exchange of Common Stock” below. If the
redemption does not qualify as a sale of Common Stock, U.S. Holders
will be treated as receiving a corporate distribution with the tax
consequences described below under “U.S. Holders — Taxation of
Redemption Treated as a Distribution” and Non-U.S. Holders will
be subject to the tax consequences described below under “—
Non-U.S. Holders — Taxation of Redemption Treated as a
Distribution” below. Whether a redemption qualifies for sale
treatment will depend largely on the total number of Common Stock
treated as held by the holder relative to all of our shares
outstanding both before and after such redemption. The redemption
of Common Stock generally will be treated as a sale of Common Stock
(rather than as a corporate distribution) if such redemption (i) is
“substantially disproportionate” with respect to the holder, (ii)
results in a “complete termination” of the holder’s interest in the
Company or (iii) is “not essentially equivalent to a dividend” with
respect to the holder (collectively, the “302 tests”). These tests
are explained more fully below.
In
determining whether any of the 302 tests is satisfied, a holder
takes into account not only the Company shares actually owned by
the holder, but also the Company shares that are constructively
owned by such holder under the relevant rules. A holder may
constructively own, in addition to shares owned directly, shares
owned by certain related individuals and entities in which the
holder has an interest or that have an interest in such holder, as
well as any shares the holder has a right to acquire by exercise of
an option. In order to meet the substantially disproportionate
test, the percentage of the Company’s outstanding voting shares
actually and constructively owned by the holder immediately
following the redemption of Common Stock must, among other
requirements, be less than 80% of the percentage of our outstanding
voting shares actually and constructively owned by the holder
immediately before the redemption. There will be a complete
termination of a holder’s interest if either (i) all of the
Company’s shares actually and constructively owned by the holder
are redeemed or (ii) all of the Company’s shares actually owned by
the holder are redeemed and the holder is eligible to waive, and
effectively waives in accordance with specific rules, the
attribution of shares owned by certain family members and the
holder does not constructively own any other Company’s shares. The
redemption of Common Stock will not be essentially equivalent to a
dividend if such redemption results in a “meaningful reduction” of
the holder’s proportionate interest in the Company. Whether the
redemption will result in a meaningful reduction in a holder’s
proportionate interest in the Company will depend on the particular
facts and circumstances. However, the IRS has indicated in a
published ruling that even a small reduction in the proportionate
interest of a small minority stockholder in a publicly held
corporation who exercises no control over corporate affairs may
constitute such a “meaningful reduction.” A holder should consult
with its own tax advisors as to the tax consequences of a
redemption.
If
none of the 302 tests is satisfied, then the redemption will be
treated as a corporate distribution and the tax effects will be as
described under “U.S. Holders — Taxation of Redemption Treated
as a Distribution” and “Non-U.S. Holders — Taxation of
Redemption Treated as a Distribution” below. After the
application of those rules, any remaining tax basis of the U.S.
Holder in the redeemed Common Stock will be added to the holder’s
adjusted tax basis in its remaining shares, or, if it has none,
possibly to the U.S. Holder’s adjusted tax basis in its other
shares constructively owned by such U.S. Holder.
U.S.
Holders
Taxation
of Redemption Treated as an Exchange of Common Stock. If the
redemption qualifies as an exchange of Common Stock as described
above under “— Treatment of Redemption
of Common Stock,” a U.S. Holder generally will
recognize capital gain or loss in an amount equal to the difference
between the amount realized and the U.S. Holder’s adjusted tax
basis in Common Stock. Any such capital gain or loss generally will
be long-term capital gain or loss if the U.S. Holder’s holding
period for Common Stock so disposed of exceeds one year. It is
unclear, however, whether the redemption rights with respect to
Common Stock may suspend the running of the applicable holding
period for this purpose. Long-term capital gains recognized
by non-corporate U.S. Holders will be eligible to be
taxed at reduced rates under current law. The deductibility of
capital losses is subject to limitations.
Generally,
the amount of gain or loss recognized by a U.S. Holder is an amount
equal to the difference between (i) the sum of the amount of
cash and the fair market value of any property received in such
disposition and (ii) the U.S. Holder’s adjusted tax basis in
its Common Stock so disposed of. A U.S. Holder’s adjusted tax basis
in its Common Stock generally will equal the U.S. Holder’s
acquisition cost less any prior distributions treated as a return
of capital for U.S. federal income tax purposes.
Taxation
of Redemption Treated as a Distribution. If the redemption does
not qualify as an exchange of Common Stock, a U.S. Holder will
generally be treated as receiving a distribution in respect of its
Common Stock. Such a distribution generally will be includable in a
U.S. Holder’s gross income as dividend income to the extent that
such distributions are paid out of our current or accumulated
earnings and profits as determined under U.S. federal income tax
principles. Dividends will be taxable to a corporate U.S. Holder at
regular rates and will generally be eligible for the
dividends-received deduction if the requisite holding period is
satisfied.
For non-corporate U.S.
Holders, if the U.S. Holder satisfies certain holding period
requirements and the U.S. Holder is not under an obligation to make
related payments with respect to positions in substantially similar
or related property, dividends are “qualified dividend income”
taxed at the preferential applicable long-term capital gain rate.
It is unclear whether the redemption rights with respect to Common
Stock may prevent a U.S. Holder from satisfying the applicable
holding period requirements with respect to the dividends received
deduction or the preferential tax rate on qualified dividend
income, as the case may be. If the holding period requirements are
not satisfied, then non-corporate U.S. Holders may be
subject to tax on such dividends at regular ordinary income tax
rates instead of the preferential rate that applies to qualified
dividend income.
Distributions
in excess of our current or accumulated earnings and profit
generally will be applied against and reduce the U.S. Holder’s
basis in its Common Stock (but not below zero) and, to the extent
in excess of such basis, will be treated as gain from the sale or
exchange of such Common Stock in the manner described above under
“—Taxation of Redemption Treated as an Exchange of Common
Stock.”
U.S.
Information Reporting and Backup Withholding. Distributions
with respect to Common Stock to a U.S. Holder, whether or not such
distributions qualify as dividends for U.S. federal income tax
purposes, and proceeds from the sale, exchange or redemption of
Common Stock by a U.S. Holder generally are subject to information
reporting to the IRS and possible U.S. backup withholding, unless
the U.S. Holder is an exempt recipient. Backup withholding may
apply to such payments if a U.S. Holder fails to furnish a correct
taxpayer identification number, fails to furnish a certification of
exempt status or has been notified by the IRS that it is subject to
backup withholding (and such notification has not been
withdrawn).
Backup
withholding is not an additional tax. Amounts withheld as backup
withholding may be credited against a U.S. Holder’s U.S. federal
income tax liability, and such holder may obtain a refund of any
excess amounts withheld under the backup withholding rules by
timely filing the appropriate claim for refund with the IRS and
furnishing any required information.
Non-U.S. Holders
Redemption
of Common Stock. The characterization for U.S. federal income
tax purposes of the redemption of a Non-U.S. Holder’s
share of Common Stock generally will follow the U.S. federal income
tax characterization of such a redemption as described under
“ — Treatment of Redemption of Common Stock”
above.
Because
the satisfaction of the 302 tests described above is dependent on
matters of fact, withholding agents may presume, for withholding
purposes, that all amounts paid to Non-U.S. Holders in connection
with a redemption are treated as distributions in respect of their
shares. Accordingly, a Non-U.S. Holder should expect that a
withholding agent will likely withhold U.S. federal income tax on
the gross proceeds payable to a Non-U.S. Holder pursuant to a
redemption at a rate of 30% unless such Non-U.S. Holder is eligible
for a reduced rate of withholding tax under an applicable income
tax treaty and provides proper certification of its eligibility for
such reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E, or
other applicable IRS Form W-8). Each holder should consult with its
own tax advisors as to the tax consequences to it of any redemption
of its Common Stock, including its ability to obtain a refund of
any amounts withheld by filing an appropriate claim for a refund
with the IRS in the event that the Non-U.S. Holder is not treated
as receiving a dividend under the 302 tests.
Taxation
of Redemption Treated as an Exchange of Common Stock.
A Non-U.S. Holder generally will not be subject to U.S.
federal income or withholding tax in respect of any gain realized
upon the redemption of Common Stock unless:
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the
gain is effectively connected with the Non-U.S. Holder’s
conduct of a trade or business within the United States (and,
if required by an applicable income tax treaty,
the Non-U.S. Holder maintains a permanent establishment
in the United States to which such gain is
attributable); |
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the Non-U.S. Holder
is a nonresident alien individual present in the United States
for 183 days or more during the taxable year of the
disposition and certain other requirements are met; or |
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Common
Stock constitutes a U.S. real property interest (“USRPI”) by reason
of the Company’s status as a U.S. real property holding corporation
(“USRPHC”) for U.S. federal income tax purposes, and certain other
conditions are met. |
Gain
described in the first bullet point above generally will be subject
to U.S. federal income tax on a net income basis at the regular
rates applicable to a U.S. Holder, unless an applicable tax treaty
provides otherwise. A Non-U.S. Holder that is a
corporation also may be subject to a branch profits tax at a rate
of 30% (or such lower rate specified by an applicable income tax
treaty) on such effectively connected gain, as adjusted for certain
items.
Gain
described in the second bullet point above will be subject to U.S.
federal income tax at a rate of 30% (or such lower rate specified
by an applicable income tax treaty), which may be offset by U.S.
source capital losses of the Non-U.S. Holder (even though
the individual is not considered a resident of the
United States), provided the Non-U.S. Holder has
timely filed U.S. federal income tax returns with respect to such
losses.
With
respect to the third bullet above, the Company believes that it is
not and has not been at any time since its formation, and does not
expect to be immediately after its initial business combination is
completed, a USRPHC.
Non-U.S. Holders
should consult their tax advisors regarding potentially applicable
income tax treaties that may provide for different
rules.
Taxation
of Redemption Treated as a Distribution. If the redemption
does not qualify as an exchange of Common Stock, with respect to
a Non-U.S. Holder, such holder will generally be treated
as receiving a distribution in respect of Common Stock. Such a
distribution to the extent paid out of the Company’s current or
accumulated earnings and profits (as determined under U.S. federal
income tax principles) will constitute a dividend for U.S. federal
income tax purposes. Amounts not treated as a dividend for U.S.
federal income tax purposes will constitute a return of capital and
be applied against and reduce a Non-U.S. Holder’s
adjusted tax basis in its Common Stock, but not below zero, and
thereafter as capital gain and will be treated as described above
under “—Non-U.S. Holders—Taxation of Redemption Treated as
an Exchange of Common Stock.”
Subject
to the discussion below on effectively connected income, dividends
paid to a Non-U.S. Holder of Common Stock will be subject
to U.S. federal withholding tax at a rate of 30% of the gross
amount of the dividends (or such lower rate specified by an
applicable income tax treaty, provided
the Non-U.S. Holder furnishes a valid
IRS Form W-8BEN or W-8BEN-E (or other
applicable documentation) certifying qualification for the lower
treaty rate). A Non-U.S. Holder that does not timely
furnish the required documentation, but that qualifies for a
reduced treaty rate, may obtain a refund of any excess amounts
withheld by timely filing an appropriate claim for refund with the
IRS.
If
dividends paid to a Non-U.S. Holder are effectively
connected with the Non-U.S. Holder’s conduct of a trade
or business within the United States (and, if required by an
applicable income tax treaty, the Non-U.S. Holder
maintains a permanent establishment in the United States to
which such dividends are attributable),
the Non-U.S. Holder will be exempt from the U.S. federal
withholding tax described above. To claim the exemption,
the Non-U.S. Holder must furnish to the applicable
withholding agent a valid
IRS Form W-8ECI, certifying that the dividends are
effectively connected with the Non-U.S. Holder’s conduct
of a trade or business within the United States.
Any
such effectively connected dividends will be subject to U.S.
federal income tax on a net income basis at the regular rates.
A Non-U.S. Holder that is a corporation also may be
subject to a branch profits tax at a rate of 30% (or such lower
rate specified by an applicable income tax treaty) on such
effectively connected dividends, as adjusted for certain
items. Non-U.S. Holders should consult their tax advisors
regarding any applicable tax treaties that may provide for
different rules.
Information
Reporting and Backup Withholding. Payments of dividends on
Common Stock will not be subject to backup withholding, provided
the applicable withholding agent does not have actual knowledge or
reason to know the holder is a United States person and the
holder either certifies its non-U.S. status, such as by
furnishing a valid
IRS Form W-8BEN, W-8BEN-E or W-8ECI, or
otherwise establishes an exemption. However, information returns
are required to be filed with the IRS in connection with any
dividends on Common Stock paid to the Non-U.S. Holder,
regardless of whether any tax was actually withheld. In addition,
proceeds from a sale or other taxable disposition of Common Stock
within the United States or conducted through certain
U.S.-related brokers generally will not be subject to backup
withholding or information reporting if the applicable withholding
agent receives the certification described above and does not have
actual knowledge or reason to know that such holder is a
United States person, or the holder otherwise establishes an
exemption. Proceeds from a disposition of Common Stock conducted
through a non-U.S. office of a non-U.S. broker
generally will not be subject to backup withholding or information
reporting.
Copies
of information returns that are filed with the IRS may also be made
available under the provisions of an applicable treaty or agreement
to the tax authorities of the country in which
the Non-U.S. Holder resides or is established. Backup
withholding is not an additional tax. Any amounts withheld under
the backup withholding rules may be allowed as a refund or a credit
against a Non-U.S. Holder’s U.S. federal income tax
liability, provided the required information is timely furnished to
the IRS.
Foreign
Account Tax Compliance Act. Under Sections 1471 through
1474 of the Code (such Sections commonly referred to as “FATCA”),
payments of dividends on and the gross proceeds of dispositions of
Common Stock of a U.S. issuer paid to (i) a “foreign financial
institution” (as specifically defined in the Code) or (ii) a
“non-financial foreign entity” (as specifically defined in the
Code) will be subject to a withholding tax (separate and apart
from, but without duplication of, the withholding tax described
above) at a rate of 30%, unless various U.S. information reporting
and due diligence requirements (generally relating to ownership by
U.S. persons of interests in or accounts with those entities) have
been satisfied or an exemption from these rules applies. Under
proposed Treasury Regulations, the preamble to which states that
taxpayers may rely on them until final Treasury Regulations are
issued, this withholding tax will not apply to the gross proceeds
from the sale or disposition of Common Stock. An intergovernmental
agreement between the United States and an applicable foreign
country may modify these requirements. If a dividend payment is
both subject to withholding under FATCA and subject to the
withholding tax discussed above, the withholding under FATCA may be
credited against, and therefore reduce, such other withholding tax.
Non-U.S. holders should consult their tax advisors regarding the
possible implications of this withholding tax on their Common
Stock.
We
urge you to consult with your own tax adviser to determine the
particular tax consequences to you (including the application and
effect of any U.S. federal, state, local or foreign income or other
tax laws) of the receipt of cash in exchange for shares in
connection with the Extension Amendment Proposal.
Company’s
Recommendation to Stockholders
After
careful consideration of all relevant factors, the Board has
determined that the Extension Amendment Proposal is fair to, and in
the best interests of, the Company and its stockholders. The Board
has approved and declared advisable the Extension Amendment
Proposal, and recommends that you vote “FOR” the adoption of the
Extension Amendment. See the section entitled “Reasons for the
Extension Amendment — The Board’s Reasons for the Extension
Amendment, its Conclusion, and its Recommendation.”
Interests
of the Company’s Founders, Directors and Executive
Officers
When
you consider the recommendation of the Board, you should keep in
mind that the Company’s Founders have interests that may be
different from, or in addition to, your interests as a stockholder.
See the section entitled “Proposal No. 1 - The Extension
Amendment Proposal — Interests of the Company’s
Founders.”
Stock
Ownership
Information
concerning the holdings of certain of the Company’s stockholder is
set forth below under “Beneficial Ownership of
Securities.”
PROPOSAL
NO. 1 – THE EXTENSION AMENDMENT PROPOSAL
The
Extension Amendment
We
are proposing to amend the Charter to allow us to amend the Monthly
Extension Payment required to be deposited in Trust Account from
$0.0333 for each public share to $[__] per Remaining Share for up
to nine (9) times if the Company has not consummated its initial
business combination by March 14, 2023 (the nine (9) month
anniversary of the closing of the IPO).
Although
the approval of the Extension Amendment Proposal is essential to
allow the Company to have more flexibility to complete the initial
business combination, the Board will retain the right to abandon
and not implement the Extension Amendment at any time without any
further action by stockholders. If the Extension Amendment
Proposal is approved, the Company will file an amended form of the
Charter with the Secretary of State of the State of Delaware. A
copy of the proposed amendment to the Charter of the Company to
effectuate the Extension is attached to this proxy statement as
Annex A.
All
holders of our public shares, whether they vote for or against the
Extension Amendment Proposal or do not vote at all, will be
permitted to convert all or a portion of their public shares into
their pro rata portion of the Trust Account, provided that the
Extension Amendment is implemented. Holders of public shares do not
need to be a holder of record on the Record Date in order to
exercise redemption rights.
Reasons
for the Extension Amendment
The Company’s IPO Prospectus dated June 9, 2022 and the Charter
provide that we have until March 14, 2023 to complete a merger,
capital stock exchange, asset acquisition, stock purchase,
recapitalization, reorganization or other similar business
combination with one or more businesses or entities. If we
anticipate that we may not be able to consummate the initial
business combination by March 14, 2023, we may, but are not
obligated to, if requested by the Sponsor or its affiliates, extend
the Combination Period by depositing $287,212.5 per month ($0.0333
per public share) into our Trust Account, affording the Company up
to December 14, 2023 to complete our initial business combination.
Further, the IPO Prospectus and the Charter provide that the
Company may modify the Current Termination Date by amending the
Charter approved by the affirmative vote of the holders of at least
sixty-five percent (65%) of all then outstanding shares of Common
Stock.
The Company’s management believes that the Extension Amendment will
allow the Company to have more flexibility to complete the initial
business combination. If the Extension Amendment Proposal is
approved, the Company will still have the right to extend the
Combination Period from March 14, 2023 up to December 14, 2023
(i.e., 18 months from the closing of the IPO), provided that the
Monthly Extension Payment of $[__] per public share is deposited
into the Trust Account. If there is (i) no redemption of the public
shares, the Monthly Extension Payment will be $[__], (ii) 50%
redemption of the public shares, the Monthly Extension Payment will
be $ [__], and (iii) 80% redemption of the public shares, the
Monthly Extension Payment will be $[__]. The Company’s board has
determined that, given the Company’s expenditure of time, efforts
and money on identifying suitable target business and completion of
a business combination, it is in the best interests of its
stockholder to approve the Extension Amendment. The first Monthly
Extension Payment after the approval of the Extension Amendment
Proposal must be made prior to March 14, 2023, while the second
Monthly Extension Payment must be deposited into the Trust Account
prior to 4th of each succeeding month up to December 14, 2023. We
intend to issue a press release announcing the deposit of funds
promptly after such funds are deposited into the Trust
Account.
If
the Extension Amendment Proposal is not approved, and the initial
business combination is not consummated by March 14, 2023 (or by
December 14, 2023 if extended), the Company will (i) cease all
operations except for the purpose of winding up, (ii) as promptly
as reasonably possible but not more than ten business days
thereafter, redeem 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 earned on the funds held in the Trust
Account and not previously released to the Company to pay its taxes
or for working capital purposes (less up to $50,000 of interest to
pay dissolution expenses), divided by the number of then
outstanding public shares, which redemption will completely
extinguish public stockholders’ rights as stockholders (including
the right to receive further liquidating distributions, if any),
subject to applicable law, and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of the
Company’s remaining stockholders and the Board, dissolve and
liquidate, subject in each case to the Company’s obligations under
Delaware 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 in the event the Company winds
up.
In
connection with our redemption of 100% of our outstanding public
shares for a portion of the funds held in the Trust Account, each
holder will receive a full pro rata portion of the amount then in
the Trust Account (less up to $50,000 of interest to pay
dissolution expenses). Holders of warrants will receive no proceeds
in connection with the liquidation with respect to such warrants,
which will expire worthless. The Company would expect to pay the
costs of liquidation from its remaining assets outside of the Trust
Account or available to the Company from interest income on the
Trust Account balance.
Our
Founders have waived their redemption rights with respect to their
Founder Shares and public shares in connection with a stockholder
vote to approve an amendment to our Charter with respect to
any other provision relating to stockholders’ rights or
pre-initial business combination activity. Holders of
warrants will receive no proceeds in connection with the
liquidation with respect to such warrants, which will expire
worthless.
After consultation with the Sponsor, the Company’s management has
reasons to believe that, if the Extension Amendment Proposal is
approved, the Sponsor or its affiliates will contribute $[__] to
the Company as a loan for the Company to deposit the funds into the
Trust Account as the Monthly Extension Payment. The first Extension
Payment after the approval of the Extension Amendment Proposal must
be made prior to March 14, 2023, while the second Extension Payment
must be deposited into the Trust Account prior to 14th of each
succeeding month until the termination of the Extension.
If the Company complete its
initial business combination, the Company would repay such loaned
amounts out of the proceeds of the Trust Account. In addition, such
extension funding loans may be convertible into Private Warrants
upon the closing of the Company’s initial business combination at
$1.00 per warrant at the option of the lender.
Redemption
Rights
If
the Extension Amendment Proposal is approved (and not abandoned),
the Company will afford the public stockholders making the
Election, the opportunity to receive, at the time the Extension
Amendment becomes effective, and in exchange for the surrender of
their shares, a pro rata portion of the funds available in the
Trust Account. You will also be able to redeem your public shares
in connection with the expected stockholder vote to approve an
initial business combination, or if the Company has not consummated
a business combination by the Extended Termination
Date.
If
you do not make the Election, you will retain the opportunity to
redeem your public shares upon consummation of an initial business
combination, subject to any limitations set forth in the Charter
and the limitations contained in related agreements. In addition,
public stockholders who vote for the Extension Amendment Proposal
and do not make the Election would be entitled to redemption if the
Company has not completed a business combination by the Extended
Termination Date.
Redemption
Procedure
In
connection with tendering your shares for redemption, you must
elect either to physically tender your share certificates to VStock
Transfer, LLC, the Company’s transfer agent, at 18 Lafayette Place,
Woodmere, NY 11598, by two business days prior to the special
meeting or to deliver your shares to the transfer agent
electronically using The Depository Trust Company’s DWAC System,
which election would likely be determined based on the manner in
which you hold your shares. The requirement for physical or
electronic delivery prior to the special meeting ensures that a
redeeming holder’s Election is irrevocable once the Extension
Amendment Proposal is approved. In furtherance of such irrevocable
election, stockholders making the Election will not be able to
tender their shares at the special meeting.
Through
the DWAC system, this electronic delivery process can be
accomplished by the stockholder, whether or not it is a record
holder or its shares are held in “street name,” by contacting the
transfer agent or its broker and requesting delivery of its shares
through the DWAC system. Delivering shares physically may take
significantly longer. In order to obtain a physical share
certificate, a stockholder’s broker and/or clearing broker, DTC,
and the Company’s transfer agent will need to act together to
facilitate this request. 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 approximately
$120.00 and the broker would determine whether or not to pass this
cost on to the redeeming holder. It is the Company’s understanding
that stockholders should generally allot at least two weeks to
obtain physical certificates from the transfer agent. The Company
does not have any control over this process or over the brokers or
DTC, and it may take longer than two weeks to obtain a physical
share certificate. Such stockholders will have less time to make
their investment decision than those stockholders that do not elect
to exercise their redemption rights. Stockholders who request
physical share certificates and wish to redeem may be unable to
meet the deadline for tendering their shares before exercising
their redemption rights and thus will be unable to redeem their
shares.
Certificates
that have not been tendered in accordance with these procedures by
two business days prior to the special meeting will not be redeemed
for cash. In the event that a public stockholder tenders its shares
and decides prior to the special meeting that it does not want to
redeem its shares, the stockholder may withdraw the tender. If you
delivered your shares for redemption to our transfer agent and
decide prior to the special meeting not to redeem your shares, you
may request that our transfer agent return the shares (physically
or electronically). You may make such request by contacting our
transfer agent at the address listed above. In the event that a
public stockholder tenders shares and the Extension Amendment
Proposal is not approved or is abandoned, these shares will not be
redeemed for cash and the physical certificates representing these
shares will be returned to the stockholder promptly following the
determination that the Extension Amendment Proposal will not be
approved or will be abandoned. The Company anticipates that a
public stockholder who tenders shares for redemption in connection
with the vote to approve the Extension Amendment Proposal would
receive payment of the redemption price for such shares soon after
the completion of the Extension Amendment. The Company will hold
the certificates of public stockholders that make the Election
until such shares are redeemed for cash or returned to such
stockholders.
If
properly demanded, the Company will redeem each public share for a
pro rata portion of the funds available in the Trust Account,
calculated as of the Record Date. If you exercise your redemption
rights, you will be exchanging your shares for cash and will no
longer own the shares. You will be entitled to receive cash for
these shares only if you properly demand redemption, and tender
your share certificate(s) to the Company’s transfer agent by two
business days prior to the special meeting. If the Extension
Amendment Proposal is not approved or if they are abandoned, these
shares will not be redeemed for cash. However, if the Company is
unable to complete an initial business combination by the Current
Termination Date (unless such date is extended), the shares of the
public stockholders will be redeemed in accordance with the terms
of the Charter promptly following such date.
Interests
of the Company’s Founders
When
you consider the recommendation of our Board, you should keep in
mind that the Founders may be different from, or in addition to,
your interests as a stockholder. These interests include, among
other things:
|
● |
the
fact that the Founders have agreed not to redeem any shares of
Common Stock in connection with a stockholder vote to approve an
amendment to the Charter; |
|
● |
the
beneficial ownership by the Sponsor of an aggregate of 2,156,250
Founder Shares and 5,240,000 Private Warrants, which would become
worthless if the Company does not complete a business combination
within the applicable time period, as the Sponsor has agreed
(A) to vote any shares owned by them in favor of any proposed
business combination and (B) not to redeem any Founder Shares
in connection with a stockholder vote to approve a proposed initial
business combination. The personal and financial interests of our
founders 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. The Sponsor paid an
aggregate of $25,000 for the Founders Shares and $5,240,000 for the
Private Warrants.; |
|
● |
Ms.
“Joy” Yi Hua, our CEO, CFO and Chairwoman, is the sole manager and
member of the Sponsor, and as such may be deemed to have sole
voting and investment discretion with respect to the shares of
Common Stock held by the Sponsor, including 2,156,250 Founder
Shares as described above, which would become worthless if the
Company does not complete a business combination by the Combination
Period, as the Sponsor has waived any right to redemption with
respect to these shares; |
|
● |
each
of the three independent directors of the Company will receive cash
compensation of $20,000, will be payable upon the closing of our
initial business combination; |
|
● |
Our
Founders may have a conflict of interest with respect to evaluating
a business combination and financing arrangements as we may obtain
loans from our founders or an affiliate of our founders or any of
our officers and directors to finance transaction costs in
connection with an intended initial business combination. Up to
$3,000,000 of such loans may be convertible into working capital
warrants at a price of $1.00 per warrant at the option of the
lender. Such working capital warrants would be identical to the
Private Warrants sold in the Private Placement. |
|
● |
the
Founders or any of their respective affiliates will be reimbursed
for any out-of-pocket expenses incurred related to identifying,
investigating, and consummating an initial business combination,
provided, that, if the Company does not consummate a business
combination, a portion of the working capital held outside the
Trust Account may be used by the Company to repay such
reimbursements so long as no proceeds from the Trust Account are
used for such repayment. |
|
● |
the
continued indemnification of current directors and officers of the
Company and the continuation of directors’ and officers’ liability
insurance after a business combination; |
|
● |
the
fact that the Founders and their respective affiliates can earn a
positive return on their investment, even if the public
stockholders have a negative return on their investment in the
post-combination entity; and |
|
● |
in
addition to these interests of the Founders, to the fullest extent
permitted by applicable laws, the Charter waives certain
applications of the doctrine of corporate opportunity in some
circumstances where the application of any such doctrine would
conflict with any fiduciary duties or contractual obligations they
may have as of the date of the Charter or in the future, and the
Company will renounce any expectancy that any of the directors or
officers of the Company will offer any such corporate opportunity
of which he or she may become aware to the Company. the Company
does not believe that the pre-existing fiduciary duties or
contractual obligations of its officers and directors materially
impacted its search for an acquisition target. Further, the Company
does not believe that the waiver of the application of the
corporate opportunity doctrine in the Charter had any impact on its
search for a potential business combination target. |
These
interests may influence our directors in making their
recommendation that you vote in favor of the approval of the
Extension Amendment Proposal. These interests were considered by
the Board when they approved the Extension Amendment
Proposal.
Required
Vote
Approval
of the Extension Amendment Proposal requires the affirmative vote
of holders of at least 65% of our outstanding shares of Common
Stock on the Record Date. If the Extension Amendment Proposal is
not approved, the Extension Amendment will not be implemented. With
respect to the Extension Amendment Proposal, abstentions and broker
non-votes will have the same effect as “AGAINST” votes.
All
of the Founders are expected to vote any shares of Common Stock
owned by them in favor of the Extension Amendment
Proposal.
Our
Board recommends that you vote “FOR” the Extension Amendment
Proposal. Our Board expresses no opinion as to whether you should
redeem your public shares.
When
you consider the recommendation of our Board, you should keep in
mind that the Founders have interests that may be different from,
or in addition to, your interests as a stockholder. For more
details, see “Proposal No. 1 - The Extension Amendment Proposal
– Interests of the Company’s Founders.”
PROPOSAL
NO. 2 – THE ADJOURNMENT PROPOSAL
The
Adjournment Proposal, if adopted, will request the chairman of the
special meeting (who has agreed to act accordingly) to adjourn the
special meeting to a later date or dates to permit further
solicitation of proxies. The adjournment proposal will only be
presented to our shareholders in the event, based on the tabulated
votes, there are not sufficient votes at the time of the special
meeting to approve the other proposal in this proxy statement. If
the Adjournment Proposal is not approved by our stockholders, the
chairman of the meeting will not exercise his ability to adjourn
the special meeting to a later date (which he would otherwise have
under the Charter) in the event, based on the tabulated votes,
there are not sufficient votes at the time of the special meeting
to approve the other proposal.
Required
Vote
Approval
of the Adjournment Proposal requires the affirmative vote of at
least a majority of the votes cast by the stockholders present in
person (including virtual presence) or represented by proxy at the
special meeting. Abstentions and broker non-votes will have no
effect on the outcome of the Adjournment Proposal.
All
of the Founders are expected to vote shares of Common Stock owned
by them in favor of the Adjournment Proposal.
Recommendation
Our
Board recommends that you vote “FOR” the Adjournment
Proposal.
When
you consider the recommendation of our Board, you should keep in
mind that the Founders have interests that may be different from,
or in addition to, your interests as a stockholder. For more
details, see “Proposal No. 1 - The Extension Amendment Proposal
– Interests of the Company’s Founders.”
MANAGEMENT
Directors
and Executive Officers
Our
current directors and executive officers are listed
below.
Name |
|
Age |
|
Position |
“Joy”
Yi Hua |
|
47 |
|
Chief
Executive Officer, Chief Financial Officer and
Chairwoman |
James
“Jim” C. Hardin Jr. |
|
43 |
|
Director |
Mr. Edmund
R. Miller |
|
66 |
|
Director |
Mr. Andrew
Pierce |
|
36 |
|
Director |
Ms. “Joy” Yi Hua is our Chief Executive Officer, Chief
Financial Officer and Chairwoman. Ms. Hua has over 18 years of
experience in investment management, hedge fund, private equity and
real estate investment around the world. Since June 2016, Ms. Hua
has served as the Managing Director of Serene View Capital LLC, an
investment management and consulting firm. In June 2018, Ms. Hua
founded Cohere Education LLC, an online education
start-up engaged in the distribution of STEAM curriculum and
programs to K-12 and college students in the U.S. and China.
Before that, Ms. Hua co-founded and served as the Chief
Operating Officer for MeshImpact LLC for the period between July
2016 and December 2018, overseeing financial and strategic planning
for the consulting firm providing data analytics and machine
learning solutions. Earlier in her career, Ms. Hua worked for
CornerStone Parnters LLC for 8 years from 2008 to 2016 where she
managed private equity and real assets portfolios of over
3 billion US dollars for 12 non-profit clients. Ms. Hua
started her investment career at UVIMCO, the organization that
manages the University of Virginia’s $14.5 billion endowment,
from 2004 to 2008. Ms. Hua received her MBA from the University of
Texas at Austin in 2003, and a B.A. in Economics from Shanghai
University of Finance & Economics in 1997. She has been a CFA
charter holder since 2004.
Mr. James “Jim” C. Hardin Jr. has served as our
independent director since June 2022. Mr. Hardin has 20 years
of experience in direct investments, co-investments, and fund
investments in multiple private and public asset classes, sectors,
and countries. He has particular investing experience in
healthcare, fintech (bank software, payments), and community banks.
He is currently an investment banker affiliated with Deer Isle
Group, LLC and The Sponsor Fund Partners LLC. On the advisory side
through Deer Isle Group, LLC, Mr. Hardin works with clients as
a fractional general partner — which is similar to a fractional
strategic CFO role — where he provides senior bandwidth to private
equity general partners to support transaction execution and
capital raising. Prior to partnering with Deer Isle,
Mr. Hardin founded a technology-enabled service company
for the lower middle market private equity ecosystem between 2014
and 2020, led private equity investing at
full-service outsourced investment firm and Duke
University-spinout Global Endowment Management (now $12B AUM)
between 2009 and 2013, acquired and exited a point of sale payments
company between 2009 and 2017, and co-managed a healthcare
portfolio at the multi-strategy hedge fund Farallon Capital
Management/Noonday (now $35B AUM) between 2004 and 2008.
Mr. Hardin has also been a director of Affirmative
Technologies, a provider of electronic payment risk management and
fraud detection software, since 2018. Mr. Hardin has also been
the President of Fund Investor Toolkit, LLC, a consulting service,
since 2014. Mr. Hardin graduated cum laude in Economics (AB)
from Harvard College.
Mr. Edmund R. Miller has served as our
independent director since June 2022. Mr. Miller is a Senior
Managing Director of Pan American Finance, LLC, an investment
advisory firm where he has held this position since 2012. He has
extensive private equity investment, fundraising and
Telecommunication, Media, & Technology (TMT) experience. From
2002 to 2011, he was the Managing Director at Parmenter Realty
Partners where he was in charge of all aspects of documenting and
raising their second, third, and fourth institutional funds.
Earlier in his career, from 1984 to 1996, Mr. Miller was
co-manager of the largest Caribbean Basin and Latin American
coverage team for Goldman Sachs, based in Miami. From 1996 to 1999,
he managed a high yield fund for a large Latin American bank,
managed a hedge fund, and was a founder and led the initial
investment round in Answerthink (now known as The Hackett Group,
NASDAQ: HCKT), an information technology consulting company.
Mr. Miller was the co-founder of Interprise Technology
Partners, a $110 million technology venture fund which made
seven lead investments between 1999 and 2002. Prior to joining
Goldman Sachs in 1984, Mr. Miller worked for Price Waterhouse
in New York City in international tax for 4 years. He is a graduate
of the University of Florida Warrington College of Business and the
Levin College of Law. Mr. Miller was previously certified as a
CPA and was a member of the New York Bar.
Mr. Andrew Pierce has served as our independent
director since June 2022. Mr. Pierce has more than a decade of
experience in everything from data center auditing and IT support,
to building world-class software and leading teams of
engineers. Between 2014 and 2022, Mr. Pierce led the Platform
Applications team for BlackSky Technology Inc. (NYSE: BKSY), a
leading provider of real-time geospatial intelligence and
global monitoring services, and has helped grow it from a $1M ARR
startup into a publicly-traded powerhouse valued at over $1B
on opening day. Prior to BlackSky, Mr. Pierce served as the
Engineering Manager of Thermopylae Science and Technology’s
iSpatial platform. He is also the founder and owner of Banana Stand
Technologies, Inc., a company engaged in “web3”
consulting services. From 2009 to 2010, he was on the team that
built FederalReporting.gov, the system responsible for tracking the
American Recovery and Reinvestment Act (ARRA) stimulus spending. He
graduated with a B.S. in Computer Science and a B.A. in Japanese
Studies from the College of William and Mary in 2009, and has spent
time abroad living and working in Japan.
Committees
of the Board of Directors
Our
board of directors has two standing committees: an audit committee
and a compensation committee. Subject to
phase-in rules and a limited exception, the rules of
Nasdaq and Rule 10A-3 of the Exchange Act require
that the audit committee of a listed company be comprised solely of
independent directors, and the rules of Nasdaq require that
the compensation committee of a listed company be comprised solely
of independent directors.
Audit Committee
Messrs. James
“Jim” C. Hardin Jr., Edmund R. Miller and Andrew Pierce serve as
members of our audit committee, with James “Jim” C. Hardin Jr.
serving as the Chairman of the audit committee. Under the Nasdaq
listing standards and applicable SEC rules, we are required to have
at least three members of the audit committee, all of whom must be
independent, subject to certain phase-in provisions. Each such
person meets the independent director standard under Nasdaq listing
standards and under Rule 10-A-3(b)(1) of the
Exchange Act.
Each
member of the audit committee is financially literate and our board
of directors has determined that James “Jim” C. Hardin Jr.
qualifies as an “audit committee financial expert” as defined in
applicable SEC rules.
We
have adopted an audit committee charter, which details the
principal functions of the audit committee, including:
|
● |
the
appointment, compensation, retention, replacement, and oversight of
the work of the independent auditors and any other independent
registered public accounting firm engaged by us; |
|
● |
pre-approving all
audit and permitted non-audit services to be provided by the
independent auditors or any other registered public accounting firm
engaged by us, and establishing pre-approval policies and
procedures; |
|
● |
reviewing
and discussing with the independent auditors all relationships the
auditors have with us in order to evaluate their continued
independence; |
|
● |
setting
clear hiring policies for employees or former employees of the
independent auditors; |
|
● |
setting
clear policies for audit partner rotation in compliance with
applicable laws and regulations; |
|
● |
obtaining
and reviewing a report, at least annually, from the independent
auditors describing (i) the independent auditor’s internal
quality-control procedures and (ii) any material issues
raised by the most recent internal quality-control review, or
peer review, of the audit firm, or by any inquiry or investigation
by governmental or professional authorities within the preceding
five years respecting one or more independent audits carried
out by the firm and any steps taken to deal with such
issues; |
|
● |
reviewing
and approving any related party transaction required to be
disclosed pursuant to Item 404 of
Regulation S-K promulgated by the SEC prior to us
entering into such transaction; and |
|
● |
reviewing
with management, the independent auditors, and our legal advisors,
as appropriate, any legal, regulatory or compliance matters,
including any correspondence with regulators or government agencies
and any employee complaints or published reports that raise
material issues regarding our financial statements or accounting
policies and any significant changes in accounting standards or
rules promulgated by the Financial Accounting Standards Board,
the SEC or other regulatory authorities. |
Compensation Committee
We
have a compensation committee of the board of directors.
Messrs. James “Jim” C. Hardin Jr., Edmund R. Miller and Andrew
Pierce serve as members of our compensation committee, with Andrew
Pierce serving as the chairman of the compensation committee. Under
the Nasdaq listing standards and applicable SEC rules, we are
required to have at least two members of the compensation
committee, all of whom must be independent, subject to certain
phase-in provisions. Each such person meets the independent
director standard under Nasdaq listing standards applicable to
members of the compensation committee.
We
have adopted a compensation committee charter, which details the
principal functions of the compensation committee,
including:
|
● |
reviewing
and approving on an annual basis the corporate goals and objectives
relevant to our Chief Executive Officer’s compensation,
evaluating our Chief Executive Officer’s performance in light of
such goals and objectives and determining and approving the
remuneration (if any) of our Chief Executive Officer based on
such evaluation; |
|
● |
reviewing
and approving on an annual basis the compensation of all of our
other officers; |
|
● |
reviewing
on an annual basis our executive compensation policies and
plans; |
|
● |
implementing
and administering our incentive compensation
equity-based remuneration plans; |
|
● |
assisting
management in complying with our proxy statement and annual report
disclosure requirements; |
|
● |
approving
all special perquisites, special cash payments and other special
compensation and benefit arrangements for our officers and
employees; |
|
● |
if
required, producing a report on executive compensation to be
included in our annual proxy statement; and |
|
● |
reviewing,
evaluating and recommending changes, if appropriate, to the
remuneration for directors. |
Notwithstanding
the foregoing, as indicated above, other than reimbursement of
expenses, no compensation of any kind, including finders,
consulting or other similar fees, will be paid to any of our
existing stockholders, officers, directors or any of their
respective affiliates, prior to the completion of business
combination, or for any services they render in order to complete
the consummation of a business combination although we may consider
cash or other compensation to officers or advisors we may hire
officers or advisors to be paid either prior to or in connection
with our initial business combination. Accordingly, it is likely
that prior to the consummation of an initial business combination,
the compensation committee will only be responsible for the review
and recommendation of any compensation arrangements to be entered
into in connection with such initial business
combination.
The
charter also provides that the compensation committee may, in its
sole discretion, retain or obtain the advice of a compensation
consultant, legal counsel or other adviser and will be directly
responsible for the appointment, compensation and oversight of the
work of any such adviser. However, before engaging or receiving
advice from a compensation consultant, external legal counsel or
any other adviser, the compensation committee will consider the
independence of each such adviser, including the factors required
by Nasdaq and the SEC.
Director
Nominations
We do
not have a standing nominating committee. In accordance with Rule
5605(e)(2) of the NASDAQ Rules, a majority of the independent
directors may recommend a director nominee for selection by the
Board. The Board believes that the independent directors can
satisfactorily carry out the responsibility of properly selecting
or approving director nominees without the formation of a standing
nominating committee. As there is no standing nominating committee,
we do not have a nominating committee charter in
place.
The
Board will also consider director candidates recommended for
nomination by our stockholders during such times as they are
seeking proposed nominees to stand for election at the next annual
meeting of stockholders (or, if applicable, a special meeting of
stockholders). Our stockholders that wish to nominate a director
for election to our Board should follow the procedures set forth in
our bylaws.
We
have not formally established any specific, minimum qualifications
that must be met or skills that are necessary for directors to
possess. In general, in identifying and evaluating nominees for
director, our Board considers educational background, diversity of
professional experience, knowledge of our business, integrity,
professional reputation, independence, wisdom, and the ability to
represent the best interests of our stockholders.
Compensation
Committee Interlocks and Insider Participation
None
of our officers currently serve, and in the past year have not
served, as a member of the compensation committee of any entity
that has one or more officers serving on our board of
directors.
Code
of Ethics, Corporate Governance Guidelines and Committee
Charters
We
have adopted a Code of Ethics (“Code of Ethics”) that applies to
all of our executive officers, directors and employees. The Code of
Ethics codifies the business and ethical principles that govern all
aspects of our business. We have filed a copy of our Code of
Ethics, our Audit Committee Charter and our Compensation Committee
Charter as exhibit to our IPO Prospectus. You may also review these
documents by accessing our public filings at the SEC’s web site at
www.sec.gov. We intend to disclose any amendments to or
waivers of certain provisions of our Code of Ethics in a Current
Report on Form 8-K.
Executive
Compensation
Employment Agreements
We
have not entered into any employment agreements with our executive
officers and have not made any agreements to provide benefits upon
termination of employment.
Executive Officers and Director Compensation
Each of our independent directors has received cash compensation of
$60,000 after the IPO, and will receive $20,000 upon the closing of
our initial business combination. Except for as mentioned herein,
no compensation of any kind, including finder’s and consulting
fees, was paid to our founders or any of their respective
affiliates, for services rendered prior to or in connection with
the completion of our initial business combination although we may
consider cash or other compensation to officers or advisors we may
hire officers or advisors to be paid either prior to or in
connection with our initial business combination. In addition, our
officers, directors or any of their respective affiliates will be
reimbursed for any out-of-pocket expenses incurred in
connection with activities on our behalf such as identifying
potential target businesses and performing due diligence on
suitable business combinations.
After
the completion of our initial business combination, directors or
members of our management team who remain with us may be paid
consulting or management fees from the combined company. All of
these fees will be fully disclosed to stockholders, to the extent
they known, in the tender offer materials or proxy solicitation
materials furnished to our stockholders in connection with a
proposed business combination. We have not established any limit on
the amount of such fees that may be paid by the combined company to
our directors or members of management. It is unlikely the amount
of such compensation will be known at the time of the proposed
business combination, because the directors of the
post-combination business will be responsible for determining
officer and director compensation. Any compensation to be paid to
our officers will be determined, or recommended to the board of
directors for determination, either by a compensation committee
constituted solely by independent directors or by a majority of the
independent directors on our board of directors.
Following
a business combination, to the extent we deem it necessary, we may
seek to recruit additional managers to supplement the incumbent
management team 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.
BENEFICIAL OWNERSHIP
OF SECURITIES
The
following table sets forth information regarding the beneficial
ownership of our Common Stock as of September 30, 2022, with
respect to the beneficial ownership of our Common Stock held
by:
|
● |
each
person known by us to be the beneficial owner of more than 5% of
our outstanding shares of Common Stock; |
|
● |
each
of our executive officers and directors that beneficially owns
shares of Common Stock; and |
|
● |
all
our executive officers and directors as a group. |
Unless
otherwise indicated, we believe that all persons named in the table
have sole voting and investment power with respect to all shares of
Common Stock beneficially owned by them.
Name
and Address of Beneficial Owner(1) |
|
Number of
Shares
Beneficially
Owned |
|
|
Approximate
Percentage of
Outstanding
Shares of
Common Stock |
|
Acri Capital Sponsor LLC (2) |
|
|
2,156,250 |
|
|
|
20.0 |
% |
“Joy” Yi Hua |
|
|
2,156,250 |
|
|
|
20.0 |
% |
All
executive officers, and directors as a group
|
|
|
2,156,250 |
|
|
|
20.0 |
% |
|
|
|
|
|
|
|
|
|
5%
Stockholders of Acri Capital |
|
|
|
|
|
|
|
|
Saba
Capital Management, L.P. (3) |
|
|
500,000 |
|
|
|
5.8 |
% |
Space
Summit Capital LLC (4)
|
|
|
408,806 |
|
|
|
5.45 |
% |
|
(1) |
Unless
otherwise noted, the business address of each of the following
entities or individuals is c/o Acri Capital Acquisition
Corporation, 13284 Pond Springs Rd, Ste 405, Austin, Texas
78729 |
|
(2) |
Acri
Capital Sponsor LLC, the Sponsor, is the record holder of the
securities reported herein. “Joy” Yi Hua, our CEO, CFO and
Chairwoman, is the sole manager and member of the Sponsor. By
virtue of this relationship, Ms. Hua may be deemed to have
beneficial ownership of the securities held of record by the
Sponsor. |
|
(3) |
Based
on a Schedule 13G filed by the reporting person. The address for
the reporting person is 405 Lexington Avenue, 58th Floor, New York,
New York 10174 |
|
(4) |
Based
on a Schedule 13G filed by the reporting person. The address for
the reporting persons is 15455 Albright Street, Pacific Palisades,
CA 90272. |
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE
Certain
Relationships and Related Transactions
Founder and Private Warrants
On February 4, 2022, the Sponsor
acquired 2,156,250 Founder Shares of for an aggregate
purchase price of $25,000, or approximately $0.01 per share.
As of September 30, 2022, there were 2,156,250 Founder
Shares issued and outstanding. The
number of Founder Shares issued was determined based on the
expectation that such Founder Shares would represent 20% of
the outstanding shares upon completion of the IPO.
The Founder Shares are identical to the public shares. However, the
Founders have agreed (A) to vote their Founder Shares in favor
of any proposed business combination, (B) not to propose, or
vote in favor of, prior to and unrelated to an initial business
combination, an amendment to the Company’s certificate of
incorporation that would affect the substance or timing of the
Company’s redemption obligation to redeem all public shares if the
Company cannot complete an initial business combination within the
Combination Period, unless the Company provides public stockholders
an opportunity to redeem their public shares in conjunction with
any such amendment, (C) not to redeem any shares, including
Founder Shares and public shares into the right to receive cash
from the Trust Account in connection with a stockholder vote to
approve the Company’s proposed initial business combination or sell
any shares to us in any tender offer in connection with the
Company’s proposed initial business combination, and (D) that
the Founder Shares shall not participate in any liquidating
distribution upon winding up if a business combination is not
consummated.
Substantially
concurrently with the closing of the IPO, the Company completed the
sale of 5,240,000 Private Warrants to the Sponsor at a purchase
price of $1.00 per Private Warrant, generating gross proceeds to
the Company of $5,240,000. The Private Warrants are identical to
the Public Warrants except that the Private Warrants (including the
Class A common stock issuable upon exercise of the Private
Warrants) will not be transferable, assignable or salable until 30
days after the completion of the initial business combination
except to permitted transferees.
Promissory Note — Related Party
On January 20, 2022, the Sponsor agreed to loan the Company up to
$500,000 to be used for a portion of the expenses of the IPO.
This loan is non-interest bearing, unsecured and is due at the
earlier of (1) January 20, 2023 or (2) the date on
which the Company consummates its IPO of its securities. The
Company has an outstanding loan balance of $316,827 on June
14, 2022 after the IPO and the outstanding balance was repaid on
June 21, 2022. As of September 30, 2022, there was no loan
balance outstanding.
Related Party (Working Capital) Loans
In addition, in order to finance transaction costs in connection
with an intended initial business combination, the Sponsor, or an
affiliate of the Sponsor or certain of the Company’s officers and
directors may, but are not obligated to, loan the Company funds as
may be required. If the Company completes the initial business
combination, it would repay such loaned amounts. In the event that
the initial business combination does not close, the Company may
use a portion of the working capital held outside the Trust Account
to repay such loaned amounts but no proceeds from the Trust Account
would be used for such repayment. Up to $3,000,000 of such
loans may be converted upon consummation of the Company’s initial
business combination into warrants at a price of $1.00 per
warrant. If the Company does not complete a business combination,
the loans would be repaid out of funds not held in the Trust
Account, and only to the extent available. Such private qarrant
converted from loan would be identical to the Private Warrants sold
in the Private Placement.
As of September 30, 2022, the Company had no borrowings under the
working capital loans.
Related
Party Policy
We
have not yet adopted a formal policy for the review, approval or
ratification of related party transactions. Accordingly, the
transactions discussed above were not reviewed, approved or
ratified in accordance with any such policy.
We
have adopted a code of ethics requiring us to avoid, wherever
possible, all conflicts of interests, except under guidelines or
resolutions approved by our board of directors (or the appropriate
committee of our board) or as disclosed in our public filings with
the SEC. Under our code of ethics, conflict of interest
situations will include any financial transaction, arrangement or
relationship (including any indebtedness or guarantee of
indebtedness) involving the company. We have filed a copy of our
Code of Ethics as exhibit to our IPO Prospectus. You may also
review these documents by accessing our public filings at the SEC’s
web site at www.sec.gov. In addition, our audit committee is
responsible for reviewing and approving related party transactions
to the extent that we enter into such transactions. An affirmative
vote of a majority of the members of the audit committee present at
a meeting at which a quorum is present will be required in order to
approve a related party transaction. A majority of the members of
the entire audit committee will constitute a quorum. Without a
meeting, the unanimous written consent of all of the members of the
audit committee will be required to approve a related party
transaction. We have filed a copy of our audit committee charter as
exhibit to our IPO Prospectus. You may also review these documents
by accessing our public filings at the SEC’s web site at
www.sec.gov.We also require each of our directors and
executive officers to complete a directors’ and officers’
questionnaire that elicits information about related party
transactions.
These
procedures are intended to determine whether any such related party
transaction impairs the independence of a director or presents a
conflict of interest on the part of a director, employee or
officer.
To further minimize conflicts of interest, we have agreed not to
consummate an initial business combination with an entity that is
affiliated with any of our Founders, officers or directors unless
we, or a committee of independent directors, have obtained an
opinion from an independent investment banking firm which is a
member of FINRA or an independent accounting firm that our initial
business combination is fair to our company from a financial point
of view. Furthermore, other than disclosed otherwise, no finder’s
fees, reimbursements or cash payments will be made to our founders,
existing officers, directors or advisors, or our or their
affiliates, for services rendered to us prior to or in connection
with the completion of our initial business combination although we
may consider cash or other compensation to officers or advisors we
may hire subsequent to this offering to be paid either prior to or
in connection with our initial business combination. In addition,
the following payments will be made to our founders or their
affiliates, none of which will be made from the proceeds of this
offering held in the Trust Account prior to the completion of our
initial business combination:
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A
monthly fee of an aggregate of $10,000 for office space,
administrative and shared personnel support services to the
Sponsor. This arrangement will terminate upon the earlier of
(a) completion of a business combination or
(b) 12 months after the completion of this
offering; |
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Reimbursement
for any out-of-pocket expenses related to identifying,
investigating and completing an initial business combination;
and |
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Repayment
of loans which may be made by our founders or an affiliate of our
founders to finance transaction costs in connection with an
intended initial business combination, the terms of which have not
been determined nor have any written agreements been executed with
respect thereto. Up to $3,000,000 of such loans may be convertible
into working capital warrants, at a price of $1.00 per warrant at
the option of the lender. Such working capital warrants are
identical to the private warrants sold in the private
placement. |
Director
Independence
Nasdaq
listing standards require that a majority of our board of directors
be independent. An “independent director” is defined generally as a
person other than an officer or employee of the company or its
subsidiaries or any other individual having a relationship which in
the opinion of the company’s board of directors, would interfere
with the director’s exercise of independent judgment in carrying
out the responsibilities of a director. Our board of directors has
determined that Messrs. James “Jim” C. Hardin Jr., Edmund R.
Miller and Andrew Pierce are “independent directors” as defined in
the Nasdaq listing standards and applicable SEC rules. Our audit
committee is entirely composed of independent directors meeting
Nasdaq’s additional requirements applicable to members of the audit
committee. Our independent directors will have regularly scheduled
meetings at which only independent directors are
present.
STOCKHOLDER
PROPOSALS
If
the Extension Amendment Proposal is approved, we anticipate that
the 2023 annual meeting of stockholders will be held no later than
December 31, 2023. For any proposal to be considered for inclusion
in our proxy statement and form of proxy for submission to the
stockholders at our 2023 annual meeting of stockholders, it must be
submitted in writing and comply with the requirements of Rule 14a-8
of the Exchange Act.
In
addition, our bylaws provide notice procedures for stockholders to
nominate a person as a director and to propose business to be
considered by stockholders at a meeting. Notice of a nomination or
proposal must be delivered to us not later than the close of
business on the 90th day nor earlier than the close of business on
the 120th day before the anniversary date of the immediately
preceding annual meeting of stockholders; provided, however, that
in the event that the annual meeting is more than 30 days before or
more than 60 days after such anniversary date (or if there has been
no prior annual meeting), notice by the stockholder to be timely
must be so delivered not earlier than the close of business on the
120th day before the meeting and not later than the later of (x)
the close of business on the 90th day before the meeting or (y) the
close of business on the 10th day following the day on which public
announcement of the date of the annual meeting is first made by the
us. Nominations and proposals also must satisfy other requirements
set forth in the bylaws. The Chairman of the Board may refuse to
acknowledge the introduction of any stockholder proposal not made
in compliance with the foregoing procedures.
DELIVERY
OF DOCUMENTS TO STOCKHOLDERS
Unless
we have received contrary instructions, we may send a single copy
of this proxy statement to any household at which two or more
stockholders reside if we believe the stockholders are members of
the same family. This process, known as “householding,” reduces the
volume of duplicate information received at any one household and
helps to reduce our expenses. However, if stockholders prefer to
receive multiple sets of our disclosure documents at the same
address in the future, the stockholders should follow the
instructions described below. Similarly, if an address is shared
with another stockholder and together both of the stockholders
would like to receive only a single set of our disclosure
documents, the stockholders should follow these
instructions:
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If
the shares are registered in the name of the stockholder, the
stockholder may notify us of his or her request by calling or
writing Advantage Proxy, Inc., our proxy solicitor, at P.O. Box
13581, Des Moines, WA 98198, telephone number: (877) 870-8565,
email: ksmith@advantageproxy.com; or |
|
● |
If a
bank, broker or other nominee holds the shares, the stockholder
should contact the bank, broker or other nominee directly; banks or
brokers may call Advantage Proxy, Inc. at (203)
658-9400. |
WHERE
YOU CAN FIND MORE INFORMATION
We
file annual and quarterly reports and other reports and information
with the SEC. The SEC maintains an Internet web site that contains
reports, proxy and information statements, and other information
regarding issuers, including us, that file electronically with the
SEC. The public can obtain any documents that we file
electronically with the SEC at http://www.sec.gov. We will provide
without charge to you, upon written or oral request, a copy of the
reports and other information filed with the SEC.
Any
requests for copies of information, reports or other filings with
the SEC should be directed to Acri Capital Acquisition Corporation,
13284 Pond Springs Rd, Ste 405, Austin, Texas, Attention: “Joy” Yi
Hua, Chief Executive Officer, Chief Financial Officer and
Chairwoman.
In
order to receive timely delivery of the documents in advance of the
special meeting, you must make your request for information no
later than January 17, 2023 (one week prior to the date of the
special meeting).
ANNEX
A
PROPOSED AMENDMENT
TO THE
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ACRI CAPITAL ACQUISITION CORPoration
[●],
2023
Acri
Capital Acquisition Corporation, a corporation organized and
existing under the laws of the State of Delaware (the
“Corporation”), DOES HEREBY CERTIFY AS
FOLLOWS:
1.
The name of the Corporation is “Acri Capital Acquisition
Corporation”. The original certificate of incorporation of the
Corporation was filed with the Secretary of State of the State of
Delaware on January 7, 2022 (the “Original
Certificate”). An Amended and Restated Certificate of
Incorporation of the Corporation (the “First Amended and Restated
Certificate”) was filed with the Secretary of State of the State of
Delaware on June 7, 2022.
2.
This Amendment to the Amended and Restated Certificate of
Incorporation (“Second Amendment”) amends the First Amended and
Restated Certificate.
3.
This Second Amendment, which both restates and amends the
provisions of the First Amended and Restated Certificate, was duly
adopted by the Board of Directors of the Corporation and the
stockholders of the Corporation in accordance with Section 228, 242
and 245 of the General Corporation Law of the State of
Delaware.
4.
This Second Amendment shall become effective on the date of filing
with the Secretary of State of the State of Delaware.
5.
The text of Section 9.1(c) is hereby amended and restated to read
in full as follows:
(c)
In the event that the Corporation has not consummated an initial
Business Combination within 9 months from the closing of the
Offering, the Sponsor may request that the Board extend the period
of time to consummate an initial Business Combination by an
additional one month each time for up to six nine (9) times (each
such extension, an “Extension”), for a total of 18 months to
consummate an initial Business Combination; provided, that for each
Extension: (i) the Sponsor or its affiliates or designees has
deposited into the Trust Account an amount equal to [__]% of the
gross proceeds of the Offering, representing $[__] for each
Offering Share, in exchange for a non-interest bearing, unsecured
promissory note; and (ii) there has been compliance with any
applicable procedures relating to the Extension in the trust
agreement and in the letter agreement, both of which are described
in the Registration Statement. If the Sponsor requests an
Extension, then the following applies: (iii) the gross proceeds
from the issuance of such promissory note referred to in (i) above
will be added to the offering proceeds in the Trust Account and
shall be used to fund the redemption of the Offering Shares in
accordance with this Article IX; (iv) if the Corporation completes
its initial Business Combination, it will, at the option of the
Sponsor, repay the amount loaned under the promissory note out of
the proceeds of the Trust Account released to it or issue
securities of the Corporation in lieu of repayment in accordance
with the terms of the promissory note; and (v) if the Corporation
does not complete a Business Combination by the Deadline Date, the
Corporation will not repay the amount loaned under the promissory
note until 100% of the Offering Shares have been redeemed and only
in connection with the liquidation of the Corporation to the extent
funds are available outside of the Trust Account.
IN
WITNESS WHEREOF, Acri Capital Acquisition Corporation has caused
this Amendment to the Amended and Restated Certificate to be duly
executed in its name and on its behalf by an authorized officer as
of the date first set above.
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Acri
Capital Acquisition Corporation |
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By: |
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Name: |
“Joy”
Yi Hua |
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Title: |
Chairwoman
of the Board of Directors |
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