Item 1. Business.
General
We are a blank check company formed on April 19, 2021 as a Cayman Islands
exempted company and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or
similar business combination with one or more businesses, which we refer to throughout this Annual Report as our initial business combination.
We have generated no revenues to date and we do not expect that we will generate operating revenues at the earliest until we consummate
our initial business combination. We completed our initial public offering in November 2021, and since that time, we have engaged in discussions
with potential business combination target companies; we have not, however, as of yet, reached a definitive agreement with a specific
target company with respect to an initial business combination with us.
While we may pursue a business combination target in any business or
industry and across any geographical region, we are focusing our search on technology-based healthcare businesses that are domiciled in
Israel, that carry out all or a substantial portion of their activities in Israel, or that have some other significant Israeli connection.
Industry Opportunity
Israel’s thriving healthcare ecosystem - With a population
of just over nine million, Israel ranks first among OECD member countries in gross domestic expenditure on R&D as a percentage of
GDP: 4.9% compared to 2.03% in the European Union, according to the February 2020 publication of the OECD Directorate for Science, Technology,
and Innovation. According to the 2021 Israel Innovation Authority Annual Report on Israel’s Life Sciences Industry, which we refer
to as the IIA 2021 annual report, as of the date of that report, approximately 1,750 life sciences companies were active in Israel, employing
more than 84,000 people. This figure reflects a near-doubling of the number of life sciences companies in Israel over the last decade.
Israel’s life sciences industry focuses primarily on medical devices (39% of companies), followed by digital health (27%), biotechnology
(26%), and pharmaceuticals (8%). According to the Israel Export and International Cooperation Institute, pharmaceutical and medical equipment
product exports from Israel reached $5.2 billion in 2019, constituting approximately 5% of the total exports of goods and services from
Israel.
Academic excellence leading to commercial successes - As reviewed
in the prestigious medical journal The Lancet in 2017, many factors have contributed to the emergence of Israel as a “start-up
healthcare nation”, including the wide availability of well-trained scientists and engineers, numerous incubator programs, governmental
support and- importantly-academic excellence in healthcare. Although Israel’s population is only about 0.1% of the world’s
population, in 2018 Israeli publications represented close to 1% of the worldwide publications in medicine and related biological sciences
(IIA’s 2019 annual report). This academic activity resulted in notable successes, for example:
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Doxil, a chemotherapy for ovarian cancer, developed at the Hadassah Medical Center/Hebrew University and acquired by Johnson & Johnson; |
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Azilect, a Parkinson’s disease drug, developed by Teva Pharmaceutical Industries based on research at the Technion, Israel’s Institute of Technology; |
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Exelon, a drug for the treatment of Alzheimer’s disease, discovered at the Hebrew University and developed and marketed by Novartis; |
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Copaxone, for multiple sclerosis, or MS, originated from the Weizmann Institute of Science, or the Weizmann Institute, and developed and commercialized by Teva Pharmaceutical Industries; and |
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Rebif, another MS treatment, developed by the Weizmann Institute in collaboration with Serono’s subsidiary InterPharm. |
Israeli companies reaching global markets - Israeli successes,
however, have not been limited to academic innovations acquired by large pharmaceutical companies. In recent years, several Israeli biotech
firms that developed innovative products from bench to bedside have gained United States Food and Drug Administration (FDA) and other
regulatory approvals and started marketing their products in the United States and other regions. Notable examples are:
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UroGen Pharma’s JELMYTO® (mitomycin) for urothelial cancer; |
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Protalix BioTherapeutics’ Elelyso®, a recombinant glucocerebrosidase enzyme for Gaucher’s disease produced from innovative transgenic plant-based cell cultures; |
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Kamada Ltd.’s GLASSIA® (alpha-1 proteinase inhibitor) for emphysema due to congenital deficiency of alpha-1-proteinase inhibitor; |
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RedHill Biopharma’s Talicia® for Treatment of H. pylori infection; and |
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MediWound’s NexoBrid®, a drug for the debridement of severe burns. |
Bio-convergence successes - Israel’s strengths in engineering,
IT and life sciences, make the emerging arena of bio-convergence another potential significant growth engine for the Israeli high-tech
industry. Israeli multidisciplinary research combining engineering and biology has produced to-date multiple success stories, such as:
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Pillcam, the first ingestible diminutive camera for gastrointestinal imaging developed by Given Imaging and sold to Covidien; |
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Medinol’s pioneering flexible closed cell coronary stent; |
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InSightec’s groundbreaking MRI-guided Focused Ultrasound Surgery (MRgFUS), FDA- approved for Parkinson’s disease; |
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NeuroDerm’s first ever liquid levodopa formulation combined with a pump for continuous sub-cutaneous administration in Parkinson’s disease (acquired by Mitsubishi Tanabe for $1.1 billion); |
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BiosenseWebster’s CARTO® 3 3D cardiac electrophysiological mapping system for arrhythmia treatment, acquired by Johnson & Johnson; |
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MediGuide’s Medical Positioning System, that uses proprietary sub-millimeter sensors for minimally-invasive, intra-body navigation (sold to St. Jude Medical); |
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Nanox’s innovative “Cold-Cathode” x-ray source for more efficient radiological imaging; |
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Medi-Tate’s iTind, a minimally-invasive device to treat benign prostate hyperplasia, recently acquired by Olympus for $250 million; |
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InMode’s novel radio-frequency-based technology that enables minimally-invasive procedures and improves existing surgical procedures across several surgical specialties, such as plastic surgery and dermatology; |
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Mazor Robotics’ X STEALTH Edition guidance system for spinal surgery, a technology that originated at the Technion, Israel’s Institute of Technology, and acquired by Medtronic for $1.6 billion; and |
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NovoCure’s Optune, an electric field generator to treat gioblastoma multiforme (a type of brain cancer). |
Looking ahead - While the Israeli life sciences industry is
dominated by medical device companies, which represented as of 2020, approximately 39% of all Israeli life sciences companies, the healthcare
IT/digital health sector has been growing in recent years. Accordingly, Israel’s life sciences industry’s role in the global
healthcare IT and digital health ecosystem is increasing, from 1.5% of global investments in digital health in 2014 to 4.5% in 2019, whereas
the country’s population represents only about 0.1% of the world’s population (IIA 2021 annual report). Of the 92 life science
companies established In Israel in 2020, 43% were in the digital health subsector, which corresponds with the overall boost in this subsector
in the past five years (IIA 2021 annual report). Recent Israeli successes in the field of health-related information technology include
Zebra Medical Vision’s FDA-approved radiological analytics platform, and MDClone’s ADAMS big data platform for synthesizing,
analyzing, and sharing anonymized clinical data.
Catalysts of the Israeli healthcare industry:
In addition to its academic excellence and a track record of commercial
successes, several additional factors enhance the Israeli healthcare ecosystem:
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Educated and skilled workforce - Israel enjoys a very high percentage of engineers and scientists per capita 140 scientists and technicians per 10,000 employees, highest in the world as of 2011 (Eduard Shteinbuk “R&D and Innovation as a Growth Engine”, National Research University - Higher School of Economics (published July 2011)) and a very high ratio of academic publications per capita (25th in the world in the publication of scientific and technical articles in the fields of physics, biology, chemistry, mathematics, clinical medicine, biomedical research, engineering and technology, and earth and space sciences in journals classified by the Institute for Scientific Information’s Science Citation Index (SCI) and Social Sciences Citation Index (SSCI) as of 2016). |
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Government support - The Israeli government founded the Technology Incubator program in the early 1990s. According to the IIA 2021 annual report, as of the date of the report, there were over 22 technological, biotechnological and peripheral entrepreneurship incubators across the country, all of which have been privatized and are owned by seasoned and experienced groups, such as venture capital funds and multinational corporations, as well as private investors. The incubators offer government funding of up to 85% of early-stage project costs for two years. They nurture companies from seed to early stage, thus minimizing the risk to the investor. More than 1,100 projects (as of the date of the IIA 2019 annual report) have so far graduated from the incubators, with over 45% successfully attracting additional investments from different investors. Moreover, the Israeli government (through the IIA) has been investing more than $100 million in the life sciences sector every year for more than a decade via its different programs (IIA 2021 annual report). The main program is the R&D Fund, which offers R&D grants of up to 40% of the approved R&D program cost. |
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Investment support - The Israeli Law for the Encouragement of Capital Investments, 5719-1959, or the Investment Law, enables foreign companies operating in Israel to benefit from a reduced company tax rate and investment grants. Another incentive program offered by the government provides employment grants for R&D centers in Israel, with a four-year grant scheme covering on average 25% of the employer’s cost of salaries for each new employee. |
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Strong VC industry - The total investments in life science companies in Israel in 2020 and in Q1 2021 were $2.5 billion and $900 million, respectively, a significant increase of approximately 55% in 2020 compared to 2019 and a record high in the last decade. Of the total investments in 2020, more than $200 million was invested by Israeli venture capital funds; in the first quarter of 2021, Israeli venture capital funds already invested $100 million, almost 50% of their investment in the full year of 2020 (IIA 2021 annual report). |
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Flexible, creative economy - Flexibility and adaptability to change are widely considered primary factors affecting business performance. The world competitiveness index of IMD (a business school that purports to be a leader and pioneer in corporate leadership development) places this attribute among the leading indexes of economic competitiveness. Israel’s ability to swiftly translate market demands into organizational action accounts for its consistently strong performance in the flexibility index and its broad acceptance as a global capital of innovation. |
Advantages of SPAC business combination for mature Israeli healthcare
companies - For several years, Nasdaq has been the Israeli life sciences companies’ main source for public funding. Over 40
of the 80+ Israeli companies listed on Nasdaq are life sciences companies. Approximately $4.7 billion was raised on Nasdaq by Israeli
life sciences companies in the last decade. In 2020 alone, $751 million was raised on Nasdaq by 22 Israeli life science companies, and
in the first quarter on 2021, $203 million was raised by five such companies (IIA 2021 annual report). However, while a significant number
of mature, potentially profitable, Israeli healthcare companies would be ideal candidates to go public via the route of an initial public
offering on Nasdaq, they often have difficulties doing so because of size barriers that generally restrict such offerings to larger companies.
Additionally, Israeli companies’ attempts at public offerings on Nasdaq are hindered by the limited local expertise needed for such
a process and are particularly sensitive to its inherent uncertainty. Given the growth in the market for special purpose acquisition companies
(in terms of number of companies and the amount of funds raised by them) in recent years, we believe that this approach can be utilized
to address this unmet need and enable worthwhile, growth Israeli healthcare companies to scale up and expand.
As mentioned above, the Israeli healthcare industry has had many success
stories and has developed to-date a thorough knowhow that harbors great potential for future successes. As a SPAC that is focused solely
on the Israeli healthcare industry and is led by our management and sponsor, which have substantive Israeli business knowledge, experience
and relationships, we believe that we will enjoy the privilege of selecting a promising company out of a large variety of available companies.
Acquisition Strategy and Criteria
Our acquisition strategy is to identify an untapped opportunity within
our target Israeli healthcare industry and offer a public-ready business, a facility through which to enter the public sphere, access
capital markets, and advance its priorities. We are focusing on small to mid-size Israeli-related healthcare companies that have a solid
novel technological foundation and promising market opportunities which have so far refrained from becoming public for a variety of reasons.
We hope to serve as an attractive partner for those companies, enabling them to go public in an alternate, more easily accessible manner
- a business combination transaction - and to thereby benefit from the capital-raising options available for a publicly traded company
in the U.S.
Our sponsor’s participants and their affiliates have extensive
experience and expertise in strategic investments in public and private companies where they have a strong investment conviction driven
by clearly identifiable growth opportunities. We will apply a similar investment philosophy and approach to analyze prospective targets
and identify an attractive business combination.
We have identified the following general, non-exclusive criteria and
guidelines that we believe are important in evaluating prospective targets for our initial business combination. We have been using these
criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with
a target that does not meet one or more of these criteria and guidelines. We intend to focus on target businesses or assets with the following
attributes:
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Small-to Middle-Market Businesses We believe that the small-to middle-market segment provides the greatest number of opportunities for investment and is consistent with our sponsor’s participants’ investment history across the various healthcare segments. These segments are where our management team has the strongest capability to identify attractive opportunities. We are seeking to acquire potential target businesses which can use the funding we bring to achieve value-creating milestones. |
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Benefit from Being a Public Company. We are seeking potential target businesses with scientific or other competitive advantages in the markets in which they operate that can benefit from a broader access to capital, and the heightened public profile associated with being a publicly traded company. |
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Technology-Driven Business Model. We are seeking to acquire potential target businesses with a pioneering scientific and technology platform, including in the life sciences/biotech, medical technology, healthcare information technology and technology-enabled services sector. |
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Experienced Management Team. We are seeking to acquire business with a strong, experienced managerial, financial, and technology/scientific experience as well as mature policies on corporate governance and reporting in place. |
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Significant Growth Prospects. We are looking to select a target business expected to have significant embedded and/or underexploited growth opportunities; with near- and longer-term valuation inflection points that will allow them to reap the advantages and acceleration of having access to public capital markets. |
We may use other criteria and guidelines as well. Any evaluation relating
to the merits of a particular initial business combination may be based on these general criteria and guidelines as well as other considerations,
factors, and criteria that our management may deem relevant. If we decide to enter an initial business combination with a target business
that does not meet the above criteria and guidelines, we will disclose that fact in our shareholder communications related to the acquisition.
As discussed elsewhere in this Annual Report, this would be in the form of proxy solicitation materials or tender offer documents that
we would file with the Securities and Exchange Commission, or SEC.
In evaluating a prospective target business, we conduct a comprehensive
due diligence review. That due diligence review may include, among other things, financial statement analysis, initial public offering
readiness assessment, business practices integration analysis, document reviews, meetings with the target’s management and other
employees, inspection of facilities, consultations with relevant industry experts, competitors, customers, and suppliers, as well as a
review of additional information (operational, financial, legal and otherwise) that we obtain as part of our analysis of a target company.
We are not prohibited from pursuing an initial business combination
with a company that is affiliated with our sponsor, officers, or directors. In the event we seek to complete our initial business combination
with a company that is affiliated with our sponsor, officers, or directors, we, or a committee of independent directors, will obtain 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.
Sourcing of Potential Business Combination Targets
We believe that the operational and transactional experience of our
management team and members of our sponsor (and the investors in the sponsor) and the relationships they have developed because of such
experience, provides us with a substantial number of potential business combination targets. Our management team and other members of
our sponsor have operated and invested in leading Israeli and global healthcare companies across their corporate life cycles and have
developed deep relationships with organizations and investors operating around the world, and in our target region, Israel, in particular.
This network has grown through sourcing, acquiring, and financing businesses and maintaining relationships with sellers, financing sources
and target management teams. Our management team members have significant experience in executing transactions under varying economic
and financial market conditions. We believe that these networks of contacts and relationships and this experience will help us to identify
attractive Israeli-related healthcare technology-based businesses that can benefit from access to the public markets, and execute complex
business combination transactions, thereby enhancing shareholder value. In addition, target business candidates may be brought to our
attention from various unaffiliated sources, including investment market participants, private equity funds and large business enterprises
seeking to divest noncore assets or divisions.
We believe that we are uniquely positioned to leverage our sponsor’s,
affiliates’ and management team’s successful track record growing Israeli healthcare technology companies into large, successful
publicly traded entities, and their deep network of relationships in Israel and elsewhere, as strong competitive advantages. We utilize
our management’s and sponsor’s expertise and their respective proven deal-sourcing capabilities to provide us with a strong
pipeline of potential targets.
We believe that the experience of our management team and directors
in evaluating assets through investing and company building enables us to source the highest quality targets. Our selection process leverages
the relationships of our management team with industry captains, leading venture capitalists, private equity and hedge fund managers,
respected peers, and a network of investment banking executives, attorneys, and accountants. Together with this network of trusted partners,
we can capitalize the target business and create purposeful strategic initiatives to achieve attractive growth and performance targets.
Our management team consists of professionals and senior operating
executives of various companies and entities with decades of experience and industry exposure in various Israeli healthcare industries.
Based on our management team’s extensive experience and industry exposure, we believe that we may be able to identify, evaluate
the risk and reward of, and execute on attractive acquisition opportunities.
Significant Activities since Inception
On November 2, 2021, the Company consummated the closing of its initial
public offering, selling 12,650,000 units to the public and generating aggregate gross proceeds of $126,500,000 for the Company. Each
unit consists of one Class A ordinary share of the Company, par value $0.0001 per share and one-half redeemable warrant of the Company,
each warrant entitling the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share.
Substantially concurrent with the closing of the initial public offering,
the Company completed the private sale of 4,866,667 warrants (the “Private Placement Warrants”) to Cactus Healthcare Management
LP at a purchase price of $1.50 per Private Placement Warrant, generating aggregate gross proceeds of $7,300,000 for the Company.
Following the respective closings, a total of $129,030,000 was placed
in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A. maintained by Continental Stock Transfer & Trust Company, acting as
trustee.
Our units commenced trading on the Nasdaq Global Market on November
2, 2021 under the symbol “CCTSU”. As of December 30, 2021, holders of the units sold in the Company’s initial public
offering could begin to elect to separately trade the Class A ordinary shares and warrants included in the units. The Class A ordinary
shares and warrants that are separated may be traded on the Nasdaq Global Market under the symbols “CCTS” and “CCTSW,”
respectively. Units that are not separated continue to trade on the Nasdaq Global Market under the symbol “CCTSU.”
Competitive Strengths
Status as a Public Company
We believe that our structure makes us an attractive business combination
partner to target businesses. As an existing public company, we offer a target business an alternative to a traditional initial public
offering through a merger or other business combination. In this situation, the owners of the target business would exchange their shares
of stock or other equity interests in the target business for our ordinary shares or for a combination of our ordinary shares and cash,
allowing us to tailor the consideration used in the transaction to the specific needs of the sellers. We believe that target businesses
might find this avenue a more certain and cost-effective method to becoming a public company than a typical initial public offering. In
a typical initial public offering, there are additional expenses incurred in marketing, roadshow and public reporting efforts that will
likely not be present to the same extent in connection with a business combination with us.
Furthermore, once the business combination is consummated, the target
business will have effectively become a public company, whereas an initial public offering is always subject to the underwriters’
ability to complete the offering, as well as general market conditions that could prevent the offering from occurring. Once public, we
believe the target business would then have greater access to capital and an additional means of providing management incentives consistent
with shareholders’ interests than it would have as a privately-held company. Public company status can offer further benefits by
enhancing a company’s profile among potential new customers and vendors and attracting talented employees.
While we believe that our status as a public company will make us an
attractive business partner, some potential target businesses may view the inherent limitations in our status as a blank check company
as a deterrent and may prefer to effect a business combination with a more established entity or with a private company. These limitations
include constraints on our available financial resources, which may be inferior to those of other entities pursuing the acquisition of
similar target businesses; the requirement that we seek shareholder approval of a business combination or conduct a tender offer in relation
thereto, which may delay the consummation of a transaction; and the existence of our outstanding warrants, which may represent a source
of future dilution.
Financial Position
With funds available in our trust fund in an amount of $132,022,981
(as of March 16, 2023), which amount will be reduced as a result of (i) any redemptions in connection with the extension meeting and/or
a meeting to approve a business combination, (ii) payment of up to $4,427,500 as a deferred underwriting fee to Oppenheimer and Moelis
in connection with the business combination and (iii) additional fees and expenses associated with our initial business combination, we
offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth
and expansion of its operations, or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial
business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the
most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires.
However, given the possibility that there may be a significant percentage of our public shareholders that may elect to redeem their shares
in connection with our extension meeting and/or a meeting to approve a business combination, thereby reducing our cash resources, we may
need to secure third party financing in order to successfully effect such a business combination and there can be no assurance that it
will be available to us.
Effecting a Business Combination
General
We are not presently engaged in, and we will not engage in, any substantive
commercial business during our initial period of existence as a public company. We intend to utilize the cash derived from the proceeds
of our initial public offering and the concurrent private placement of private warrants, along with our shares, debt or a combination
of these in effecting a business combination. Accordingly, investors who purchase our securities currently do not yet have the ability
to evaluate the specific merits or risks of any one or more business combinations. A business combination may involve the acquisition
of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market
for its shares, while avoiding what it may deem to be adverse consequences of undertaking a public offering itself. These include time
delays, significant expense, loss of voting control and compliance with various federal and state securities laws. In the alternative,
we may seek to consummate a business combination with a company that may be financially unstable or in its early stages of development
or growth. While we may seek to effect simultaneous business combinations with more than one target business, we will probably have the
ability, as a result of our limited resources, to effect only a single business combination.
Subject to our management team’s pre-existing fiduciary obligations
and the fair market value requirement described below, we have virtually unrestricted flexibility in identifying and selecting a prospective
acquisition candidate. We have not established any specific attributes or criteria (financial or otherwise) for prospective target businesses
other than as described above. Accordingly, there is no basis for investors to evaluate the possible merits or risks of the target business
with which we may ultimately complete a business combination. Although our management will endeavor to evaluate the risks inherent in
a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
Sources of Target Businesses
Based on our management’s business knowledge and past experience,
we believe that there are numerous potential candidates as target business. Our principal means of identifying potential target businesses
is by leveraging the extensive contacts and relationships of our initial shareholders, officers and directors. While our officers and
directors are not required to commit any specific amount of time in identifying or performing due diligence on potential target businesses,
the relationships that they have developed over their careers and their access to our sponsor’s members’ and affiliates’
contacts and resources have been able to generate a number of potential business combination opportunities that warrant further investigation.
Target business candidates are also brought to our attention from various unaffiliated sources, including investment bankers, venture
capital funds, private equity funds, leveraged buyout funds, management buyout funds and other members of the financial community. Target
businesses have been brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings.
These sources have also introduced us to target businesses they think we may be interested in on an unsolicited basis, because many of
these sources will have read our public disclosures and know what types of businesses we are targeting.
Our officers and directors must present to us all target business opportunities
that have a fair market value of at least 80% of the assets held in the trust account (excluding taxes payable on the income accrued in
the trust account, and prior to any reduction due to redemptions at the extension meeting), at the time of the agreement to enter into
the initial business combination, subject to any pre-existing fiduciary or contractual obligations. We may engage the services of professional
firms or other individuals that specialize in business acquisitions on a formal basis, in which event we may pay a finder’s fee,
consulting fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. In no
event, however, will our sponsor, initial shareholders, officers, directors or their respective affiliates be paid any finder’s
fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the consummation of an initial
business combination (regardless of the type of transaction that it is), other than: the $10,000 monthly administrative services fee;
the payment of consulting, success or finder fees to our sponsor, officers, directors, initial shareholders or their affiliates in connection
with the consummation of our initial business combination; the repayment of $450,000 of loans that our sponsor is expected to extend to
us in April 2023 for working capital purposes, which will be represented by a promissory note that we will issue to our sponsor; and repayment
of the remainder of up to $1,500,000 (including the foregoing $450,000 amount) of loans that the sponsor or its affiliates may provide
to us, which may be converted by the lenders into warrants to purchase Class A ordinary shares, at a price of $1.50 per warrant, at the
option of the lenders. Our audit committee reviews and approves all reimbursements and payments made to our sponsor, officers, directors
or our or their respective affiliates, with any interested director abstaining from such review and approval. We have no present intention
to enter into a business combination with a target business that is affiliated with any of our officers, directors or sponsor. However,
we are not restricted from entering into any such transactions and may do so if (i) such transaction is approved by a majority of our
disinterested independent directors and (ii) we obtain an opinion from an independent investment banking firm, or another independent
entity that commonly renders valuation opinions, that the business combination is fair to our unaffiliated shareholders from a financial
point of view.
Selection of a Target Business and Structuring of a Business Combination
Subject to our management team’s pre-existing fiduciary obligations
and the limitations that a target business have a fair market value of at least 80% of the balance in the trust account (excluding taxes
payable on the income accrued in the trust account, and prior to any reduction due to redemptions at the extension meeting) at the time
of the execution of a definitive agreement for our initial business combination, as described below in more detail, and that we must acquire
a controlling interest in the target business, our management has virtually unrestricted flexibility in identifying and selecting a prospective
target business. We have not established any specific attributes or criteria (financial or otherwise) for prospective target businesses,
except as described above under “Selection of a Target Business and Structuring of a Business Combination”.
An evaluation relating to the merits of a particular business combination
is based, to the extent relevant, on such factors as well as other considerations deemed relevant by our management in effecting a business
combination consistent with our business objective. In evaluating a prospective target business, we conduct an extensive due diligence
review which encompasses, among other things, meetings with incumbent management and inspection of facilities, as well as review of financial
and other information which is made available to us. This due diligence review is conducted either by our management or by unaffiliated
third parties we may engage, although we have no current intention to engage any such third parties.
The time and costs required to select and evaluate a target business
and to structure and complete the business combination cannot presently be ascertained with certainty. Any costs incurred with respect
to the identification and evaluation of a prospective target business with which a business combination is not ultimately completed results
in a loss to us and reduces the amount of capital available to otherwise complete a business combination.
Fair Market Value of Target Business
Nasdaq listing rules require that the target business or businesses
that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (excluding
taxes payable on the income earned on the trust account, and prior to any reduction due to redemptions at the extension meeting) at the
time of the execution of a definitive agreement for our initial business combination. Notwithstanding the foregoing, if we are not then
listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% fair market value test.
We currently anticipate structuring a business combination to acquire,
or to be acquired by, the target business or businesses. We may, however, structure our initial business combination where we merge directly
with the target business or where we acquire less than 100% of such interests or assets of the target business in order to meet certain
objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if
the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling
interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. Even
if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business
combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and
us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares
in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we could acquire a 100%
controlling interest in the target; however, as a result of the issuance of a substantial number of new shares, our shareholders immediately
prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business
combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction
company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of trust
account balance test. We could also be acquired by the target business (as is done often with Israeli target companies), in which case
the target company will issue to our shareholders a number of shares representing a certain percentage of the combined company, and our
company will be merged with, and survive as, a wholly-owned subsidiary of the target company. In that structure, as well, the valuation
given to the target company in the transaction will need to exceed 80% of the value of the balance of the funds in the trust account (excluding
taxes payable on the income earned on the trust account, and prior to any reduction due to redemptions at the extension meeting).
The fair market value of the target will be determined by our board
of directors based upon one or more standards generally accepted by the financial community (such as actual and potential sales, earnings,
cash flow and/or book value). The proxy solicitation materials or tender offer documents used by us in connection with any proposed transaction
will provide public shareholders with our analysis of the fair market value of the target business, as well as the basis for our determinations.
If our board is not able to independently determine that the target business has a sufficient fair market value, we will obtain an opinion
from an unaffiliated, independent investment banking firm, or another independent entity that commonly renders valuation opinions, with
respect to the satisfaction of such criteria. We will not be required to obtain an opinion from an investment banking firm as to the fair
market value if our board of directors independently determines that the target business complies with the 80% threshold.
Lack of Business Diversification
We expect to complete our business combination with just one business.
Therefore, at least initially, the prospects for our success will likely be entirely dependent upon the future performance of a single
business operation. Unlike other entities which may have the resources to complete several business combinations of entities operating
in multiple industries or multiple areas of a single industry, it is probable that we will not have the resources to diversify our operations
or benefit from the possible spreading of risks or offsetting of losses. By consummating a business combination with only a single entity,
our lack of diversification may:
|
● |
subject us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to a business combination, and |
|
● |
result in our dependency upon the performance of a single operating business or the development or market acceptance of a single or limited number of products, processes or services. |
Limited Ability to Evaluate the Target Business’ Management
Although we scrutinize the management of a prospective target business
when evaluating the desirability of effecting a business combination, we cannot assure you that our assessment of the target business’
management will prove to be correct. In addition, we cannot assure you that the future management will have the necessary skills, qualifications
or abilities to manage a public company. Furthermore, the future role of our officers and directors, if any, in the target business following
a business combination cannot presently be stated with any certainty. While it is possible that some of our key personnel will remain
associated in senior management or advisory positions with us following a business combination, it is unlikely that they will devote their
full-time efforts to our affairs subsequent to a business combination. Moreover, they would only be able to remain with the company after
the consummation of a business combination if they are able to negotiate employment or consulting agreements in connection with the business
combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for
them to receive compensation in the form of cash payments and/or our securities for services they would render to the company after the
consummation of the business combination. While the personal and financial interests of our key personnel may influence their motivation
in identifying and selecting a target business, their ability to remain with the company after the consummation of a business combination
will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. Additionally,
we cannot assure you that our officers and directors will have significant experience or knowledge relating to the operations of the particular
target business.
Following a business combination, we may seek to recruit additional
managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit
additional managers, or that any such additional managers we do recruit will have the requisite skills, knowledge or experience necessary
to enhance the incumbent management.
Shareholders May Not Have the Ability to Approve an Initial Business
Combination
In connection with any proposed business combination, we will either
(1) seek shareholder approval of our initial business combination at a general meeting called for such purpose at which shareholders may
seek to convert their shares, regardless of whether they vote for or against the proposed business combination or do not vote at all,
into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), or (2) provide our shareholders
with the opportunity to sell their shares to us by means of a tender offer (and thereby avoid the need for a shareholder vote) for an
amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), in each case
subject to the limitations described herein. The decision as to whether we will seek shareholder approval of a proposed business combination
or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based
on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek
shareholder approval. If we determine to engage in a tender offer, such tender offer will be structured so that each shareholder may tender
all of his, her or its shares rather than some pro rata portion of his, her or its shares. In that case, we will file tender offer documents
with the SEC, which will contain substantially the same financial and other information about the initial business combination as is required
under the SEC’s proxy rules. Whether we seek shareholder approval or engage in a tender offer, we will consummate our initial business
combination only if we have net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation and, if we
seek shareholder approval, a majority of the outstanding ordinary shares voted are voted in favor of the business combination.
We chose our net tangible asset threshold of $5,000,001 under our amended
and restated memorandum and articles of association to ensure that we would avoid being subject to Rule 419 promulgated under the Securities
Act of 1933, as amended. However, if we seek to consummate an initial business combination and do not believe that we will comply with
the $5,000,001 threshold (due to redemptions of shares or otherwise), we may seek shareholder approval to amend our amended and restated
memorandum and articles of association to eliminate that threshold as part of the approval of the business combination. We may, in the
alternative, agree with a target business on a working capital closing condition or other condition that requires us to have a minimum
amount of funds available from the trust account upon consummation of such initial business combination in an amount that causes us to
exceed $5,000,001 in net tangible assets either immediately prior to or upon consummation of the business combination. Any such minimum
cash condition may force us to seek third party financing, which may not be available on terms acceptable to us or at all. As a result,
we may not be able to consummate such initial business combination and we may not be able to locate another suitable target within the
applicable time period, if at all. Public shareholders who do not redeem their shares in connection with the extension meeting may therefore
have to wait 18 months (or, if the extension is approved at the extension meeting, up to 24 months) from the closing date of our initial
public offering in order to be able to receive a pro rata share of the trust account. Our sponsor, initial shareholders, officers and
directors have agreed (1) to vote any ordinary shares owned by them in favor of any proposed business combination, (2) not to convert
any ordinary shares in connection with a shareholder vote to approve a proposed initial business combination, and (3) not sell any ordinary
shares in any tender in connection with a proposed initial business combination.
None of our officers, directors, sponsor, initial shareholders or their
affiliates indicated any intention to purchase Class A ordinary shares from public shareholders in the open market or in private transactions.
However, in connection with the extension meeting or a meeting to approve a proposed business combination, if a significant number of
shareholders vote, or indicate an intention to vote, against the extension or against such proposed business combination or intend to
have their shares redeemed, our officers, directors, sponsor or their affiliates could make such purchases in the open market or in private
transactions in order to influence the vote and reduce the number of redemptions. Notwithstanding the foregoing, our officers, directors,
sponsor and their affiliates will not make purchases of Class A ordinary shares if the purchases would violate Section 9(a)(2) or Rule
10b-5 of the Exchange Act, which are rules designed to stop potential manipulation of a company’s stock.
Redemption Rights
At the extension meeting and at any additional general meeting called
to approve an initial business combination, public shareholders may request that we redeem their shares, regardless of whether they vote
for or against the extension or proposed business combination (as applicable) or do not vote at all, and to receive their pro rata share
of the aggregate amount then on deposit in the trust account as of two business days prior to the extension meeting or prior to the consummation
of the initial business combination (as applicable), less any taxes then due but not yet paid. Alternatively, in the case of approval
of the business combination, we may provide our public shareholders with the opportunity to sell their Class A ordinary shares to us through
a tender offer (and thereby avoid the need for a shareholder vote) for an amount equal to their pro rata share of the aggregate amount
then on deposit in the trust account, less any taxes then due but not yet paid.
Our sponsor, initial shareholders and our officers and directors will
not have redemption rights with respect to any ordinary shares owned by them, directly or indirectly, whether acquired prior to our initial
public offering or purchased by them in the initial public offering or in the aftermarket.
We may require public shareholders, whether they are a record holder
or hold their shares in “street name,” to either (i) tender their certificates to our transfer agent or (ii) deliver their
shares to the transfer agent electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the
holder’s option, in each case prior to a date set forth in the proxy materials sent in connection with the proposal to approve the
extension or the business combination (as applicable). There is a nominal cost associated with the above-referenced delivery process and
the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering
broker $45.00, and it would be up to the broker whether or not to pass this cost on to the holder. However, this fee would be incurred
regardless of whether or not we require holders seeking to exercise redemption rights. The need to deliver shares is a requirement of
exercising redemption rights regardless of the timing of when such delivery must be effectuated. However, in the event we require shareholders
seeking to exercise redemption rights to do so prior to the extension or prior to the consummation of the proposed business combination,
and the proposed extension or business combination is not consummated, and, consequently, redemptions are not this may result in an increased
cost to shareholders.
Any proxy solicitation materials we furnish to shareholders in connection
with a vote for the extension and for any proposed business combination will indicate whether we are requiring shareholders to satisfy
such certification and delivery requirements. Accordingly, a shareholder would have from the time the shareholder received our proxy statement
up until two business days prior to the scheduled vote on the proposal to approve the extension or business combination to deliver his,
her or its shares if he, she or it wishes to seek to exercise his redemption rights. This time period varies depending on the specific
facts of each transaction. However, as the delivery process can be accomplished by the shareholder, whether or not he, she or it is a
record holder or his, her or its shares are held in “street name,” in a matter of hours by simply contacting the transfer
agent or his broker and requesting delivery of his, her or its shares through the DWAC System, we believe this time period is sufficient
for an average investor. However, we cannot assure you of this fact.
Any request to redeem public shares once made, may be withdrawn at
any time up to the vote on the proposed business combination or the expiration of the tender offer. Furthermore, if a holder of Class
A ordinary shares delivered his certificate in connection with an election of their redemption and subsequently decides prior to the applicable
date not to elect to exercise such rights, he or she may simply request that the transfer agent return the certificate (physically or
electronically).
If the extension or initial business combination is not approved or
completed for any reason, then our public shareholders who elected to exercise their redemption rights would not be entitled to redeem
their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any shares delivered by public
holders.
If our initial proposed business combination is not completed, we may
continue to try to complete a business combination with a different target until 18 months, or, if our extension is approved, 24 months,
from the closing date of our initial public offering.
Redemption of Public Shares and Liquidation if No Initial Business
Combination
Our sponsor, officers and directors have agreed that we will have only
18 months, or, if the extension is approved at the upcoming extension meeting, 24 months, from the closing date of our initial public
offering to complete our initial business combination. If we are unable to complete our initial business combination within such 18-month
or 24-month period, we 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 (less up to $100,000 of interest to pay dissolution expenses (which interest
shall be net of taxes payable) divided by the number of then issued and outstanding public shares, which redemption will completely extinguish
public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject
to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders
and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims
of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect
to our warrants, which will expire worthless if we fail to complete our initial business combination within the 18-month or, if the extension
is approved, 24-month time period. Our initial shareholders have entered into a letter agreement with us, pursuant to which they have
waived their rights to liquidating distributions from the trust account with respect to their founders shares if we fail to complete our
initial business combination within 18 months or during any extension period from the closing date of our initial public offering. However,
if our initial shareholders acquire public shares, they will be entitled to liquidating distributions from the trust account with respect
to such public shares if we fail to complete our initial business combination within the allotted 18-month or, if the extension is approved,
24-month time frame.
Our sponsor, officers and directors have agreed, pursuant to a written
agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A) that
would affect our public shareholders’ ability to convert or sell their shares to us in connection with a business combination as
described herein or to modify the substance or timing of the redemption rights provided to shareholders as described in this Annual Report
or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless
we provide our public shareholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be
net of taxes payable), divided by the number of then issued and outstanding public shares. However, we may not redeem our public shares
in an amount that would cause our net tangible assets to be less than $5,000,001 either immediately prior to or upon completion of our
initial business combination (so that we do not then become subject to the SEC’s “penny stock” rules).
We expect that all costs and expenses associated with implementing
our plan of dissolution, as well as payments to any creditors, will be funded from the $243,000 of proceeds held outside the trust account
as of December 31, 2022, plus proceeds from a $450,000 loan from the sponsor that will be represented by a promissory note that we will
issue to the sponsor, although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are
not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest
accrued in the trust account not required to pay taxes, we may request the trustee to release to us an additional amount of up to $100,000
of such accrued interest to pay those costs and expenses. We could also request additional funding from our sponsor and/or its partners
under those circumstances.
If we were to expend all of the net proceeds from our initial public
offering and the sale of the private warrants, other than the proceeds deposited in the trust account, and without taking into account
interest, if any, earned on the trust account, the per-share redemption amount received by shareholders upon our dissolution would be
approximately $10.20. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which
would have higher priority than the claims of our public shareholders. We cannot assure you that the actual per-share redemption amount
received by shareholders will not be substantially less than $10.20. While we intend to pay such amounts, if any, we cannot assure you
that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we seek to have all vendors, service providers (other than
our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving
any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders,
there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from
bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other
similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect
to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving
such claims to the monies held in the trust account, our management performs an analysis of the alternatives available to it and will
enter into an agreement with a third party that has not executed a waiver only if management believes that such third party’s engagement
would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that
refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management
to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where we are unable to find
a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they
may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse
against the trust account for any reason. Upon redemption of our public shares, if we are unable to complete our initial business combination
within the prescribed time frame, or upon the exercise of a redemption right in connection with our initial business combination, we will
be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following
redemption. Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent
auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a
transaction agreement, reduce the amount of funds in the trust account to below (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 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 as part of our initial public offering against certain liabilities, including liabilities under
the Securities Act. Because we are a blank check company, rather than an operating company, and our operations are limited to searching
for prospective target businesses to acquire, the only third parties we currently engage are vendors such as lawyers, investment bankers,
computer or information and technical services providers or prospective target businesses. In the event that an executed waiver is deemed
to be unenforceable against a third party, then our sponsor will not be responsible to the extent of any liability for such third-party
claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that
our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations.
We have not asked our sponsor to reserve for such obligations. None of our other officers will indemnify us for claims by third parties
including, without limitation, claims by vendors and prospective target businesses.
In the event that the proceeds in the trust account are reduced below
(1) $10.20 per public share or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of
the trust account, due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn
to pay taxes, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations
related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its
indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our
sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment
may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value
of the per-share redemption price will not be substantially less than $10.20 per share.
We will seek to reduce the possibility that our sponsor will have to
indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (other than our independent
auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title,
interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims under our
indemnity of the underwriters as part of our initial public offering against certain liabilities, including liabilities under the Securities
Act. We will have access to up to approximately $120,000 of funds that are held by our company outside of the trust account (as of March
30, 2023), plus an additional $450,000 of funds from a loan from our sponsor that we expect to receive in April 2023), with which to pay
any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more
than approximately $100,000). In the event that we liquidate, and it is subsequently determined that the reserve for claims and liabilities
is insufficient, shareholders who received funds from our trust account could be liable for claims made by creditors. The foregoing $120,000
amount held outside of the trust as of March 30, 2023 was the amount that remained from the proceeds of our initial public offering and
accompanying private placement, after payment of $1,128,000 in offering expenses and all operating expenses to date, and before receipt
of the additional $450,000 loan from our sponsor (which is expected in April 2023).
If we file a winding-up or bankruptcy petition or an involuntary winding-up
or bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable
insolvency laws and may be included in our insolvency estate and subject to the claims of third parties with priority over the claims
of our shareholders. To the extent any insolvency claims deplete the trust account, we cannot assure you we will be able to return $10.20
per share to our public shareholders. Additionally, if we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy
petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor
and/or insolvency laws as a voidable preference. As a result, a bankruptcy court could seek to recover some or all amounts received by
our shareholders. Furthermore, our board may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in
bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public shareholders from the trust account
prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public shareholders will be entitled to receive funds from the
trust account only upon the earliest to occur of: (1) the redemption of any public shares properly submitted in connection with the shareholder
vote for the extension or any other shareholder vote to amend our amended and restated memorandum and articles of association (A) that
would affect our public shareholders’ ability to convert or sell their shares to us in connection with a business combination as
described herein or to modify the substance or timing of the redemption rights provided to shareholders as described in this Annual Report,
or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity; (2) the
completion of our initial business combination, and then only in connection with those Class A ordinary shares that such shareholder properly
elected to redeem, subject to the limitations described herein; and (3) the redemption of our public shares if we are unable to complete
our initial business combination within 18 months or 24 months, if the extension is approved, from the closing date of our initial public
offering, subject to applicable law and as further described herein. In no other circumstances will a shareholder have any right or interest
of any kind to or in the trust account. In connection with the extension meeting or in the event we seek shareholder approval in connection
with our initial business combination, a shareholder’s voting in connection with the extension or our initial business combination
alone will not result in a shareholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such
shareholder must have also exercised its redemption rights described above.
Amended and Restated Memorandum and Articles of Association
| ● | Our amended and restated memorandum
and articles of association contain certain requirements and restrictions that apply to us until the completion of our initial business
combination. Our amended and restated memorandum and articles of association contain a provision which provides that, if we seek to amend
our amended and restated memorandum and articles of association (A) that would affect our public shareholders’ ability to convert
or sell their shares to us in connection with a business combination as described herein or to modify the substance or timing of our
obligation to redeem our public shares if we do not complete our initial business combination within 18 months or, if the extension is
approved, 24 months, from the closing date of our initial public offering or (B) with respect to any other provision relating to shareholders’
rights or pre-initial business combination activity, we will provide public shareholders with the opportunity to redeem their public
shares in connection with any such amendment. Specifically, our amended and restated memorandum and articles of association provide,
among other things, that: prior to the completion of our initial business combination, we shall either (1) seek shareholder approval
of our initial business combination at a general meeting called for such purpose at which public shareholders may elect to redeem their
public shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed business combination,
or (2) provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of
our initial business combination by means of a tender offer (and thereby avoid the need for a shareholder vote), in each in cash, for
an amount payable in cash equal to the aggregate amount then on deposit in the trust account as of two business days prior to the completion
of our initial business combination, including interest (which interest shall be net of taxes payable), divided by the number of then
issued and outstanding public shares, subject to the limitations described herein; |
| ● | we will consummate our initial
business combination only if we have net tangible assets of at least $5,000,001 either immediately prior to or upon completion of our
initial business combination and, solely if we seek shareholder approval, a majority of the issued and outstanding ordinary shares voted
are voted in favor of the business combination; |
| ● | if our initial business combination
is not consummated within 18 months or, if the extension is approved, 24 months, from the closing date of our initial public offering,
then our existence will terminate, and we will distribute all amounts in the trust account; and |
| ● | prior to our initial business
combination, we may not issue additional shares that would entitle the holders thereof to (1) receive funds from the trust account or
(2) vote as a class with our public shares (a) on any initial business combination or (b) to approve an amendment to our amended and
restated memorandum and articles of association to (x) extend the time we have to consummate a business combination beyond 18 months
or, if our extension is approved, 24 months, from the closing date of our initial public offering or (y) amend the foregoing provisions. |
These provisions cannot be amended without the approval of holders
of at least two-thirds of our Class A ordinary shares present and voting at a general meeting. In the event we seek shareholder approval
in connection with our initial business combination, our amended and restated memorandum and articles of association provide that we may
consummate our initial business combination only if approved by an ordinary resolution under Cayman Islands law, being the affirmative
vote of a simple majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at a general
meeting in favor of the business combination.
Additionally, our amended and restated memorandum and articles of association
provide that, prior to our initial business combination, holders of our founders shares are the only shareholders that will have the right
to vote on the appointment of directors and the right to remove a member of the board of directors for any reason. These provisions of
our amended and restated memorandum and articles of association may only be amended by a special resolution passed by at least 90% of
our ordinary shares voting in a general meeting. With respect to any other matter submitted to a vote of our shareholders, including any
vote in connection with our initial business combination, except as required by law, holders of our founders shares and holders of our
public shares will vote together as a single class, with each share entitling the holder to one vote. At the extension meeting, we will
seek approval for an amendment to the amended and restated memorandum and articles of association that would allow the holder of our founder
shares (our sponsor) to convert, at its discretion, those shares into Class A ordinary shares even prior to our initial business combination.
Such a conversion, if effected by the sponsor, would eliminate the practical distinction between the founder shares and public shares
as to their voting rights.
Comparison of redemption or purchase prices in connection with the
extension or our initial business combination with a situation in which we fail to complete our initial business combination.
The following table compares the redemptions and other permitted purchases
of public shares that may take place in connection with the extension or the completion of our initial business combination with redemptions
that would occur if we are unable to complete our initial business combination within 18 months or, if the extension is approved, 24 months,
from the closing of our IPO.
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Redemptions in Connection
with Extension or our
Initial Business
Combination |
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Other Permitted Purchases
of Public Shares by our
Affiliates |
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Redemptions if we fail to
Complete an Initial Business
Combination |
Calculation of
redemption
price |
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Redemptions at the time of the extension or our initial business combination may be made in connection with a shareholder vote (or, in the case of the initial business combination, a tender offer). The redemption price will be the same whether we conduct redemptions in connection with a shareholder vote or pursuant to a tender offer. In either case, our public shareholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account as of two business days prior to the extension meeting or consummation of the initial business combination (which is currently anticipated to be approximately $10.48 per share), including interest (which interest shall be net of taxes payable) divided by the number of then issued and outstanding public shares, subject to the limitation that no redemptions will take place if all of the redemptions would cause our net tangible assets to be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of a proposed business combination. |
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If we seek shareholder approval of our initial business combination, our sponsor, directors, officers, or their respective affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following completion of our initial business combination. Such purchases will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. None of the funds in the trust account will be used to purchase shares in such transactions. |
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If we are unable to complete our initial business combination within 18 months or, if the extension is approved, 24 months, from the closing of our IPO, we will redeem all public shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account (which is currently anticipated to be approximately $10.48 per share), including interest (less up to $100,000 of interest to pay dissolution expenses, which interest shall be net of taxes payable) divided by the number of then issued and outstanding public shares. |
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Impact to remaining shareholders |
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The redemptions in connection with the extension or our initial business combination will reduce the book value per share for our remaining shareholders, who will bear the burden of the deferred underwriting fee and interest withdrawn in order to pay taxes (to the extent not paid from amounts accrued as interest on the funds held in the trust account). |
|
If the permitted purchases described above are made, there will be no impact to our remaining shareholders because the purchase price would not be paid by us. |
|
The redemption of our public shares if we fail to complete our initial business combination will reduce the book value per share for the shares held by our sponsor, who will be our only remaining shareholder after such redemptions. |
Competition
We face intense competition from other entities having a business objective
similar to ours and whose sponsors and/or affiliates have experience in identifying and effecting, directly or indirectly, acquisitions
of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and
other resources or more local industry knowledge than we do, and our financial resources will be relatively limited when contrasted with
those of many of these competitors. While we believe there are numerous target businesses that we could potentially acquire with the net
proceeds from our initial public offering and the sale of the private warrants, our ability to compete with respect to the acquisition
of certain target businesses that are sizable is limited by our available financial resources. This inherent competitive limitation gives
others an advantage in pursuing the acquisition of certain target businesses. Furthermore, in the event we seek shareholder approval of
our initial business combination, and we are obligated to pay cash for our Class A ordinary shares, it will potentially reduce the resources
available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully
negotiating a business combination. We may furthermore face competition from other newly-formed entities that may target a business combination
transaction with similar focus areas as ours, which may intensify the competition that we face in achieving our objective.
Conflicts of Interest
Certain of our executive officers and directors have or may have fiduciary
and contractual duties to certain companies in which they have invested. These entities may compete with us for acquisition opportunities.
If these entities decide to pursue any such opportunity, we may be precluded from pursuing it. However, we do not expect these duties
to present a significant conflict of interest with our search for an initial business combination.
Certain of our officers and directors presently have, and any of them
in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is
or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes
aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual
obligations, he or she may need to honor these fiduciary or contractual obligations to present such business combination opportunity to
such entity, subject to their fiduciary duties under Cayman Islands law. We do not believe, however, that the fiduciary duties or contractual
obligations of our officers or directors will materially affect our ability to complete our initial business combination. Our amended
and restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law: (i) no individual
serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging
directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy
in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for
any director or officer, on the one hand, and us, on the other.
Indemnity
Our sponsor has agreed that it will be liable to us if and to the extent
any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target
business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below
(1) $10.20 per public share or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of
the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes,
except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as
to any claims under our indemnity of the underwriters as part of our initial public offering against certain liabilities, including liabilities
under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor
will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor
has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company
and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations.
Employees
As of the date of this Annual Report, we have two (2) officers. Members
of our management team are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their
time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time that our officers
or any other members of our management team devote in any time period varies based on the status of our pursuit of a target business for
our initial business combination and the current stage of the business combination process.
Periodic Reporting and Financial Information
We registered our units, Class A ordinary shares, and warrants under
the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the
SEC. In accordance with the requirements of the Exchange Act, each of our annual reports will contain financial statements audited and
reported on by our independent registered public auditors.
We will provide shareholders with audited financial statements of the
prospective target business as part of proxy solicitation materials or the tender offer materials to be sent to shareholders to assist
them in assessing the target business. These financial statements may be required to be prepared in accordance with, or be reconciled
to, U.S. GAAP or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance
with PCAOB standards. These financial statement requirements may limit the pool of potential target businesses we may acquire because
some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with
federal proxy rules and complete our initial business combination within the prescribed time frame. While this may limit the pool of potential
business combination candidates, we do not believe that this limitation will be material.
We are required to evaluate our internal control procedures for the
fiscal year ending December 31, 2022, as required by the Sarbanes-Oxley Act; however, as we are not deemed to be a large accelerated filer
or an accelerated filer, and still qualify as an emerging growth company, will are not required to have our internal control procedures
audited. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls.
The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and
costs necessary to complete any such acquisition.
We are an “emerging growth company,” as defined in Section
2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various
reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but
not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements
of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously
approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities
and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging
growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying
with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting
standards until those standards would otherwise apply to private companies. We take advantage of the benefits of this extended transition
period.
We will remain an emerging growth company until the earliest of (1)
the last day of the fiscal year (a) following the fifth anniversary of the closing date of our initial public offering, (b) in which we
have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means
the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s
second fiscal quarter, and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the
prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS
Act.
Additionally, we are a “smaller reporting company” as defined
in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including,
among other things, providing only two years of our statements of operations, changes in equity and cash flows in our audited financial
statements, and presenting a comparison of our most recent annual results only against one prior year period. We will remain a smaller
reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates equals
or exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues equal or exceed $100 million
during such completed fiscal year and the market value of our ordinary shares held by non-affiliates equals or exceeds $700 million as
of the end of that year’s second fiscal quarter.
Item 1A. Risk Factors An investment in our securities
involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained
in this Annual Report, before making a decision to invest in our units, Class A ordinary shares or warrants. If any of the following events
occurs, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price
of our securities could decline, and you could lose all or part of your investment.
Risks Relating to our Search for, and Consummation of or Inability
to Consummate, a Business Combination
The ability of our public shareholders to exercise redemption
rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful
and that you would have to wait for liquidation in order to redeem your shares.
We may seek to enter into a business combination transaction agreement
with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many
public shareholders exercise their redemption rights in connection with our upcoming extension meeting or the business combination, we
would not be able to meet that closing condition and, as a result, would not be able to proceed with the business combination. Over the
past year or so, the rate of redemption of shares by public shareholders of special purpose acquisition companies, or SPACs, such as ours
at the time of the extension of the expiration date of the SPAC or the initial business combination of the SPAC has increased significantly,
thereby increasing the likelihood that we, too, will face a high level of redemptions that will jeopardize our ability to successfully
consummate a business combination.
Furthermore, under our current amended and restated memorandum and
articles of association (unless we seek to amend them in connection with a vote on our initial business combination), in no event will
we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon completion of our initial
business combination (so that we do not then become subject to the SEC’s “penny stock” rules), or any greater net tangible
asset or cash requirement that may be contained in the agreement relating to our initial business combination. Consequently, if accepting
all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 upon completion of our initial
business combination or less than such greater amount necessary to satisfy a closing condition as described above, we would not proceed
with such redemption of our public shares and the related business combination, and we instead may search for an alternate business combination.
If our initial business combination is unsuccessful, you would not
receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you
could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to the pro rata amount
per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected
in connection with our redemption until we liquidate or you are able to sell your shares in the open market.
The ability of our public shareholders to exercise redemption
rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our
capital structure.
At the time we enter into an agreement for our initial business combination,
we will not know how many shareholders may exercise their redemption rights, and we will therefore need to structure the transaction based
on our expectations as to the number of shares that will be submitted for redemption. If our initial business combination agreement requires
us to use a portion of the cash in the trust account to pay the purchase price or requires us to have a minimum amount of cash at closing,
we will need to reserve a portion of the cash in the trust account to meet such requirements or arrange for third party financing. In
addition, if a larger number of shares are submitted for redemption than we initially expected, we may need to restructure the transaction
to reserve a greater portion of the cash in the trust account or arrange for third party financing. As noted above, the high rates of
redemption of shares of public shareholders of SPACs in recent times increases the likelihood that we, too, will have less cash from our
trust at the time of our initial business combination, thereby forcing us to rely upon outside financing to supplement our cash reserves.
Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable
levels. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize
our capital structure.
We may not remain qualified for continued listing, or qualify
for initial listing for the combined company, in each case, on the Nasdaq Stock Market, following the extension meeting or the shareholder
meeting at which the approval of our initial business combination is sought, respectively.
We have notified our shareholders
that we will be holding the extension meeting on April 20, 2023, at which we will seek shareholder approval for the extension of our expiration
date. In addition, in connection with an initial business combination, we may seek shareholder approval of the transaction at a general
meeting. In connection with each such meeting, under our current amended and restated memorandum and articles of association, we
will be required to allow our public shareholders to redeem their public shares in advance of the meeting, until two business days prior
to the meeting. Given the expected high rate of redemption of shares by public shareholders in connection with each such general
meeting, we may be at risk of falling out of compliance with the Nasdaq continued listing qualifications (following the extension meeting)
or failing to meet the initial listing qualifications for the potential combined company (upon completion of the shareholder meeting at
which the business combination will be approved).
In particular, if there are heightened
levels of redemptions at the extension meeting, we may fail to maintain compliance with the Nasdaq Stock Market continued listing requirements
(assuming the minimal requirements imposed by the Nasdaq Capital Market, which are the most lenient) related to market value of listed
securities ($35.0 million), number of unrestricted publicly-held shares (500,000), market value of publicly-held shares ($1.0 million)
and total shareholders (300).
Similarly, if there are extensive
redemptions in connection with a shareholder meeting to approve an initial business combination, the combined company resulting from our
potential initial business combination may fail to meet the Nasdaq initial listing requirements relating to market value of the listed
securities ($50.0 million if the combined company has at least $4.0 million of shareholders’ equity, or $75.0 million if that shareholders’
equity test is not met), unrestricted publicly held shares (1.0 million shares, or 1.1 million shares if the combined company does not
have at least $4.0 million of shareholders’ equity), market value of publicly-held shares ($15.0 million, or $20.0 million if the
foregoing shareholders’ equity test is not met), and the minimum shareholder requirement (at least 300 round lot holders with at
least 150 having positions of at least $2,500, or at least 400 round lot holders with at least 200 having positions of at least $2,500
if the foregoing shareholders’ equity test is not met) after taking into account holders of public shares that properly demanded
redemption of their public shares for cash, when it appears that such requirements would otherwise not be met.
If we fail to maintain compliance
with the Nasdaq continued listing qualifications upon completion of the extension meeting or the Nasdaq initial listing qualifications
for the potential combined company upon completion of the shareholder meeting at which the business combination will be approved, that
may frustrate our ability to successfully consummate our initial business combination, in which case public shareholders would need to
wait until our liquidation to retrieve their investment in our public shares.
We may be unable to obtain— on reasonable terms or at all—
additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could
compel us to restructure or abandon a particular business combination.
If the available net proceeds available to us for our initial business
combination (due to excessive redemptions in connection with our extension meeting or a shareholder
meeting to approve an initial business combination, or the expenditure of excessive funds in investigating potential target companies)
are insufficient, we may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you
that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable
when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that
particular business combination and seek an alternative target business candidate. In addition, even if we do not need additional financing
to complete our initial business combination, we may require such financing to fund the operations or growth of the target business. The
market for financings of initial business combinations of SPACs has been very difficult over the course of the last year or so, with financings
often available only on terms that are onerous to the combined company following the business combination. The failure to secure additional
financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors
or shareholders is required to provide any financing to us in connection with or after our initial business combination. If we are unable
to complete our initial business combination, our public shareholders may only receive approximately $10.20 per share on the liquidation
of our trust account, and our warrants will expire worthless. In certain circumstances, our public shareholders may receive less than
$10.20 per share on the redemption of their shares. See “— If third parties bring claims against us, the proceeds held in
the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.20 per share”
and other risk factors below.
We may issue notes or other debt securities, or otherwise incur
substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively
impact the value of our shareholders’ investment in us.
Although we have not committed as of the date of this Annual Report
to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to complete
our initial business combination. We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver
of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect
the per-share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative
effects, including:
| ● | default and foreclosure on
our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
| ● | acceleration of our obligations
to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the
maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
| ● | our immediate payment of all
principal and accrued interest, if any, if the debt security is payable on demand; |
| ● | our inability to obtain necessary
additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security
is issued and outstanding; |
| ● | our inability to pay dividends
on our Class A ordinary shares; |
| ● | using a substantial portion
of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary
shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
| ● | limitations on our flexibility
in planning for and reacting to changes in our business and in the industry in which we operate; |
| ● | increased vulnerability to
adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
| ● | limitations on our ability
to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and
other purposes and other disadvantages compared to our competitors who have less debt. |
The requirement that we complete our initial business combination
within the prescribed time frame may give potential target businesses leverage over us in negotiating a business combination and may limit
the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution
deadline, which could undermine our ability to complete our initial business combination on terms that would provide value for our shareholders.
Any potential target business with which we enter into negotiations
concerning a business combination is aware that we must complete our initial business combination within 18 months (or 24 months, if an
extension is approved at our upcoming April 20, 2023 extraordinary general meeting) from the closing date of our initial public offering.
Consequently, any such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete
our initial business combination with that particular target business, we may be unable to complete our initial business combination with
any target business. As of the date of this Annual Report, we have just over one month, or, if the extension is approved, just over seven
months, remaining to consummate a business combination. As a result, this risk has increased as we have gotten closer to the end of the
18-month or, if the extension is approved, 24-month, period. We may also have more limited time to conduct due diligence and may enter
into our initial business combination on terms that we would have rejected upon a more comprehensive investigation and/or if we had more
time.
Our search for a business combination, and any target business
with which we ultimately consummate a business combination, may be materially adversely affected by unfavorable macro-economic trends.
Certain global macro-economic trends that developed in the aftermath
of the COVID-19 pandemic have been adversely impacting the global economic environment. Supply chain delays, initially caused by closures
during the pandemic, and rising shipping costs, which have been exacerbated by the ongoing Russian invasion of the Ukraine, have contributed
towards inflationary pressures on many goods and commodities globally. The infusion of money into circulation as part of a “loose”
monetary policy during the pandemic to encourage consumer spending, along with historically low interest rates for an extended period
of time, which were designed to ease economic conditions, further triggered upwards pressure on prices of goods and services. The high
rates of inflation globally have caused governments and central banks to act to curb inflation, including by raising interest rates, which
has been inhibiting economic activity and access to capital markets, and may cause a recession, whether in individual countries or regions,
or globally.
These deteriorating economic conditions may adversely impact our access
to financing for the combined company upon the consummation of a potential business combination, thereby frustrating our ability to effect
that combination.
If the disruptions posed by unfavorable macro-economic conditions continue
for a further extensive period of time, the operations of the target company with which we would combine may be materially adversely affected.
Because there are many special purpose acquisition companies
evaluating targets, attractive targets have become scarcer and there is more competition for attractive targets. This could increase the
cost of our initial business combination and could even result in our inability to consummate an initial business combination.
In recent years, through 2021, the number of special purpose acquisition
companies that were formed and conducted their initial public offering increased substantially. Many potential targets for special purpose
acquisition companies have already entered into an initial business combination, and there are still many special purpose acquisition
companies seeking targets for their initial business combination. As a result, at times, fewer attractive targets may be available, and
it may require more time, more effort and more resources to identify a suitable target and to consummate an initial business combination.
In addition, because there are more special purpose acquisition companies
seeking to enter into an initial business combination with available targets, the competition for available targets with attractive fundamentals
or business models has increased, which could cause targets companies to demand improved financial terms. We expect to encounter intense
competition from other entities having a business objective similar to ours, including private investors (which may be individuals or
investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses
we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting,
directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors
possess greater technical, human and other resources or more local industry knowledge than we do, and our financial resources will be
relatively limited when contrasted with those of many of these competitors.
Attractive deals could also become scarcer for other reasons, such
as economic or industry sector downturns, geopolitical tensions, or increases in the cost of additional capital needed to close business
combinations or operate targets post-business combination. This could increase the cost of, delay or otherwise complicate or frustrate
our ability to find and consummate an initial business combination, and may result in our inability to consummate an initial business
combination on terms favorable to our investors altogether.
We may not be able to complete our initial business combination
within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem
our public shares and liquidate, in which case our public shareholders may receive only $10.20 per share, or less than such amount in
certain circumstances, and our warrants will expire worthless.
Our sponsor, officers and directors have agreed that we must complete
our initial business combination within 18 months, or, if the extension is approved, 24 months, from the closing date of our initial public
offering. We may not be able to complete an initial business combination by the conclusion of such time period. Our ability to complete
our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and
the other risks described herein.
If we are unable to complete our initial business combination within
such 18 month or 24 month period, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably
possible but not more than 10 business days thereafter, redeem the remaining outstanding public shares, at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay
dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares,
which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further
liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our
remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands
law to provide for claims of creditors and the requirements of other applicable law. In such case, our public shareholders may receive
only $10.20 per share, or less than $10.20 per share, on the redemption of their shares, and our warrants will expire worthless. See “—
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount
received by shareholders may be less than $10.20 per share” and other risk factors herein.
The notes to the condensed financial statements included in this
Annual Report contain an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”
We cannot assure you that our plans to consummate an initial business
combination will be successful, which is in part dependent on our ability to obtain sufficient financing for the company that continues
after that business combination. The market for financings of companies emerging from a business combination with a SPAC has become very
tight in the last several months. In the absence of such a business combination transaction, our company will cease to exist after 18
months, or, if the extension is approved, 24 months, have passed from the closing date of our initial public offering, which would occur
less than 12 months following the date of this Annual Report. The short-term expiration date for our company as well as the question as
to whether we will have the required financial resources to complete our initial business combination raise substantial doubt about our
ability to continue as a going concern. The financial statements contained in the F-1 pages of this Annual Report do not include any adjustments
that might result from our inability to consummate a business combination or our inability to continue as a going concern.
Our public shareholders may not be afforded an opportunity to
vote on our proposed business combination, which means we may complete our initial business combination even though a majority of our
public shareholders do not support such a combination.
We will either (1) seek shareholder approval of our initial business
combination at a general meeting called for such purpose at which public shareholders may elect to redeem their public shares without
voting, and if they do vote, irrespective of whether they vote for or against the proposed business combination, or (2) provide our public
shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination
by means of a tender offer (and thereby avoid the need for a shareholder vote), in each in cash, for an amount payable in cash equal to
the aggregate amount then on deposit in the trust account as of two business days prior to the completion of our initial business combination,
including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares,
subject to the limitations described herein. Accordingly, it is possible that we will consummate our initial business combination even
if holders of a majority of our public shares do not approve of the business combination we consummate. The decision as to whether we
will seek shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer
will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether
the terms of the transaction would otherwise require us to seek shareholder approval. For instance, Nasdaq rules currently allow us to
engage in a tender offer in lieu of a shareholder meeting but would still require us to obtain shareholder approval if we were seeking
to issue more than 20% of our outstanding shares to a target business as consideration in any business combination. Therefore, if we were
structuring a business combination that required us to issue more than 20% of our outstanding shares, we would seek shareholder approval
of such business combination instead of conducting a tender offer.
Your only opportunity to affect the investment decision regarding
a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek
shareholder approval of the business combination.
At the time of your investment in us, you will not be provided with
an opportunity to evaluate the specific merits or risks of one or more target businesses. Since our board of directors may complete a
business combination without seeking shareholder approval, public shareholders may not have the right or opportunity to vote on the business
combination, unless we seek such shareholder approval. Accordingly, if we do not seek shareholder approval, your only opportunity to affect
the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period
of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public shareholders in which we
describe our initial business combination.
We need to comply with the rules of Nasdaq that require our initial
business combination to occur with one or more target businesses having an aggregate fair market value equal to at least 80% of the assets
held in the trust account at the time of the agreement to enter into the initial business combination.
The rules of Nasdaq require that our initial business combination occur
with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the trust account
(excluding taxes payable on the income earned on the trust account) at the time of the agreement to enter into the initial business combination.
This restriction may limit the type and number of companies with which we may complete a business combination. If we are unable to locate
a target business or businesses that satisfy this fair market value test, our public shareholders may receive only approximately $10.20
per share, or less in certain circumstances, on the liquidation of our trust account, and our warrants will expire worthless. If we are
not then listed on Nasdaq for whatever reason, we would not be required to satisfy the foregoing 80% fair market value test and could
complete a business combination with a target business having a fair market value substantially below 80% of the balance in the trust
account.
If we seek shareholder approval of our initial business combination,
our sponsor, directors, officers, advisors or any of their affiliates may elect to purchase shares or warrants from public shareholders,
which may influence a vote on a proposed business combination and reduce the public “float” of our securities.
If we seek shareholder approval of our initial business combination
and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our initial
shareholders, directors, officers, advisors or any of their affiliates may purchase public shares or public warrants or a combination
thereof in privately negotiated transactions or in the open market either prior to or following the completion of our initial business
combination, although they are under no obligation or duty to do so. Such a purchase may include a contractual acknowledgement that such
shareholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise
its redemption rights. In the event that our sponsor, directors, officers, advisors or any of their affiliates purchase shares in privately
negotiated transactions from public shareholders who have already elected to exercise their redemption rights or submitted a proxy to
vote against our initial business combination, such selling shareholders would be required to revoke their prior elections to redeem their
shares and any proxy to vote against our initial business combination. The price per share paid in any such transaction may be different
than the amount per share a public shareholder would receive if it elected to redeem its shares in connection with our initial business
combination. The purpose of such purchases could be to vote such shares in favor of our initial business combination and thereby increase
the likelihood of obtaining shareholder approval of our initial business combination or to satisfy a closing condition in an agreement
with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,
where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce
the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection
with our initial business combination. This may result in the completion of our initial business combination when it may not otherwise
have been possible. In addition, if such purchases are made, the public “float” of our Class A ordinary shares or public warrants
and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation,
listing or trading of our securities on a national securities exchange.
You will not be entitled to protections normally afforded to
investors of many other blank check companies.
Since the net proceeds of our initial public offering and the sale
of the private warrants are intended to be used to complete an initial business combination with a target business that has not been identified,
we may be deemed to be a “blank check” company under the United States securities laws. However, because we have net tangible
assets in excess of $5,000,000 upon the completion of our initial public offering and the sale of the private warrants and have filed
a Current Report on Form 8-K that provided an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the
SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors are not afforded the benefits or protections
of those rules. Among other things, this means our units are immediately tradable and we have a longer period of time to complete our
initial business combination than do companies subject to Rule 419. Moreover, if our initial public offering were subject to Rule 419,
that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the
trust account were released to us in connection with our completion of an initial business combination.
If we seek shareholder approval of our initial business combination
and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders are deemed to
hold in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 15% of our Class
A ordinary shares.
If we seek shareholder approval of our initial business combination
and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended
and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder
or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange
Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in our initial public
offering, which we refer to as the “Excess Shares,” without our prior consent. However, we would not be restricting our shareholders’
ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Your inability to redeem
the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material
loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions
with respect to the Excess Shares if we complete our initial business combination. And as a result, you will continue to hold that number
of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially
at a loss.
Because the funds being held outside of the trust account may
be insufficient to allow us to operate for the remainder of the 18-month period or, if the extension is approved, 24-month period following
our initial public offering, that could limit the amount available to fund our search for a target business or businesses and complete
our initial business combination, and we may depend on additional loans from our sponsor or management team to fund those activities.
The funds available to us outside of the trust account may be insufficient
to allow us to operate for the remainder of the initial 18 months or, if the extension is approved, 24 months, following our initial public
offering. As of March 30, 2023, only approximately $120,000 is available to us outside of the trust account to fund our working capital
requirements.
We are incurring significant costs in pursuit of our acquisition plans.
Management’s plans to address this need for capital is discussed in “Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations” of this Annual Report. In particular, our sponsor and its three primary limited partners
have committed to funding, and are expected to fund in April 2023, $450,000 in working capital by way of loans that may be converted by
them (at their election) into warrants to purchase Class A ordinary shares. However, if that funding does not suffice for our working
capital purposes, we would need to raise additional financing in order to fund our expenses. Any such financing could be repaid only from
funds held outside the trust account or from funds released to us upon completion of our initial business combination. We may not be able
to obtain such financing. Any lack of financing may negatively impact our ability to consummate our initial business combination transaction.
If we are unable to complete our initial business combination because
we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In that case,
our public shareholders may receive only approximately $10.20 per share on the liquidation of our trust account, and our warrants will
expire worthless. In certain circumstances, our public shareholders may receive less than $10.20 per share on the redemption of their
shares. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share
redemption amount received by shareholders may be less than $10.20 per share” and other risk factors herein.
If third parties bring claims against us, the proceeds held in
the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.20 per share.
Our placing of funds in the trust account may not protect those funds
from third-party claims against us. Although we seek to have all vendors, service providers (other than our independent auditors), prospective
target businesses or other entities with which we do business execute agreements with us waive any right, title, interest or claim of
any kind in or to any monies held in the trust account for the benefit of our public shareholders, such parties may not execute such agreements,
or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited
to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability
of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust
account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management
will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed
a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
Examples of possible instances where we may engage a third party that
refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management
to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable
to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any
claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek
recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to complete our initial business
combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our initial business combination,
we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years
following redemption. Accordingly, the per-share redemption amount received by public shareholders could be less than the $10.20 per share
initially held in the trust account, due to claims of such creditors.
Our sponsor has agreed that it will be liable to us if and to the extent
any claims by a vendor (other than our independent auditors) for services rendered or products sold to us, or a prospective target business
with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (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, except
as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any
claims under our indemnity of the underwriters as part of our initial public offering against certain liabilities, including liabilities
under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor
will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor
has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company.
Accordingly, our sponsor may not have sufficient funds available to satisfy those obligations. We have not asked our sponsor to reserve
for such obligations, and therefore, no funds are currently set aside to cover any such obligations. As a result, if any such claims were
successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced
to less than $10.20 per public share. In such event, we may not be able to complete our initial business combination, and you would receive
such lesser amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify
us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
If our sponsor fulfills its foregoing indemnity obligations, but then
seeks indemnity for those obligations from us or from the surviving entity in a business combination transaction, that could reduce the
consideration payable to you in any such business combination transaction.
Our directors may decide not to enforce the indemnification obligations
of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public shareholders.
In the event that the proceeds in the trust account are reduced below
the lesser of (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 our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a
particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification
obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce
its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose
not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount
of funds in the trust account available for distribution to our public shareholders may be reduced below $10.20 per share.
If, before distributing the proceeds in the trust account to
our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against
us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per-share
amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust account to our public
shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that
is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or insolvency laws, and may be included
in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any
bankruptcy or insolvency claims deplete the trust account, the per-share amount that would otherwise be received by our shareholders in
connection with our liquidation may be reduced.
If, after we distribute the proceeds in the trust account to
our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against
us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our board of directors
may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us
to claims of punitive damages.
If, after we distribute the proceeds in the trust account to our public
shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that
is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency
laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency
court could seek to recover all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached
its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by
paying public shareholders from the trust account prior to addressing the claims of creditors.
If we are deemed to be an investment company under the Investment
Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it
difficult for us to complete our initial business combination.
If we are deemed to be an investment company under the Investment Company
Act of 1940, as amended, (or the Investment Company Act), our activities may be restricted, including:
| ● | restrictions on the nature
of our investments; and |
| ● | restrictions on the issuance
of securities; |
each of which may make it difficult for us to complete our initial
business combination.
In addition, we may have imposed upon us burdensome requirements, including:
| ● | registration as an investment
company; |
| ● | adoption of a specific form
of corporate structure; and |
| ● | reporting, record keeping,
voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to. |
We do not believe that our anticipated principal activities will subject
us to the Investment Company Act. The proceeds held in the trust account may be invested by the trustee only in United States government
treasury bills with a maturity of 185 days or less or in money market funds investing solely in United States Treasuries and meeting certain
conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the proceeds will be restricted to these instruments,
we believe we will meet the requirements for the exemption provided in Rule 3a-1 promulgated under the Investment Company Act. If we were
deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses
for which we have not allotted funds and may hinder our ability to complete a business combination. If we are unable to complete our initial
business combination, our public shareholders may receive only approximately $10.20 per share, or less in certain circumstances, on the
liquidation of our trust account, and our warrants will expire worthless.
Changes in SEC rules affecting special purpose acquisition companies
may adversely affect our ability to negotiate and complete our initial business combination.
Our consummation of a business combination may be contingent upon our
ability to comply with certain laws, regulations, interpretations and applications, and any post-business combination company may be subject
to additional laws, regulations, interpretations and applications. Compliance with the foregoing may be difficult, time consuming and
costly. Laws and regulations and their interpretation and application may also change from time to time, and those changes could have
a material adverse effect on our business, including our ability to negotiate and complete an initial business combination.
On March 30, 2022, the SEC issued proposed rules relating to, among
other items, disclosures in business combination transactions involving special purpose acquisition companies, or SPACs, and private operating
companies; the financial statement requirements applicable to transactions involving shell companies; the use of projections in SEC filings
in connection with proposed business combination transactions; the potential liability of certain participants in proposed business combination
transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act of 1940, as amended, including
a proposed rule that would provide SPACs a safe harbor from treatment as an investment company if they satisfy certain conditions that
limit a SPAC’s duration, asset composition, business purpose and activities. These rules, if adopted, whether in the form proposed
or in a revised form, which as of the date of this Annual Report such rules have not been adopted, may increase the costs of and the time
needed to negotiate and complete an initial business combination, and may constrain the circumstances under which we could complete an
initial business combination.
Changes in laws or regulations, or a failure to comply with any
laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination,
and results of operations.
We are subject to laws and regulations enacted by national, regional
and local governments. In particular, we are required to comply with certain SEC and other legal requirements. Compliance with, and monitoring
of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and
application may also change from time to time and those changes could have a material adverse effect on our business, investments and
results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a
material adverse effect on our business, including our ability to negotiate and complete our initial business combination, and results
of operations.
Our shareholders may be held liable for claims by third parties
against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an insolvent liquidation, any distributions
received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution
was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to
recover some or all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary
duties to us or our creditors and/or may have acted in bad faith, and thereby exposing themselves and our company to claims, by paying
public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought
against us for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted any distribution to
be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business would
be guilty of an offence and may be liable to a fine of up to $18,292 and to imprisonment for five years in the Cayman Islands.
Because we are not limited to any specific target businesses
with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’
operations.
While we are focused upon a combination with technology-based healthcare
businesses that are domiciled in Israel, that carry out all or a substantial portion of their activities in Israel, or that have some
other significant Israeli connection, we nevertheless may pursue acquisition opportunities in any one of numerous industries or geographic
locations. We are not, however, under our amended and restated memorandum and articles of association, permitted to effectuate our business
combination with another blank check company or similar company with nominal operations. To the extent we complete our business combination,
we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially
unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business
and operations of a financially unstable or an early-stage entity. Although our officers and directors will endeavor to evaluate the risks
inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors
or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave
us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you
that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity
were available, in a business combination target. Accordingly, any shareholders who choose to remain shareholders following the business
combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction
in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of
care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the tender
offer materials or proxy statement relating to the business combination contained an actionable material misstatement or material omission.
Although we have identified general criteria and guidelines that
we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target
that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination
may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria and guidelines for evaluating
prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not
have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of
these guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria
and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and
guidelines, a greater number of shareholders may exercise their redemption rights, which may make it difficult for us to meet any closing
condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if shareholder
approval of the transaction is required by law, or we decide to obtain shareholder approval for business or other legal reasons, it may
be more difficult for us to attain shareholder approval of our initial business combination if the target business does not meet our general
criteria and guidelines. If we are unable to complete our initial business combination, our public shareholders may receive only approximately
$10.20 per share on the liquidation of our trust account and our warrants will expire worthless.
We are not required to obtain an opinion from an independent
investment banking firm or from another independent entity that commonly renders valuation opinions, and consequently, you may have no
assurance from an independent source that the price we are paying for the business is fair to our company from a financial point of view.
Unless we complete our initial business combination with an affiliated
entity, we are not required to obtain an opinion from an independent investment banking firm, or from another independent entity that
commonly renders valuation opinions, that the price we are paying is fair to our company from a financial point of view. If no opinion
is obtained, our shareholders will be relying on the judgment of our board of directors, who will determine fair market value based on
standards generally accepted by the financial community. Such standards used will be disclosed in our tender offer documents or proxy
solicitation materials, as applicable, related to our initial business combination.
We may only be able to complete one business combination with
the proceeds from our initial public offering and the sale of the private warrants, along with funding from our sponsor, which will cause
us to be solely dependent on a single business which may have a limited number of products or services, or product candidates. This lack
of diversification may negatively impact our operations and profitability.
The net proceeds from our initial public offering and the sale of the
private warrants, which was initially $130,142,000, along with the $450,000 loan that we received from our sponsor and its three primary
limited partners, may be reduced significantly due to redemptions by our public shareholders in connection with the extension meeting
and a meeting to approve our initial business combination. In addition, we will need to pay related fees and expenses (which fees will
include approximately $4,427,500 for the payment of a deferred underwriting fee to Oppenheimer and Moelis) in connection with the completion
of our business combination.
We may effectuate our initial business combination with a single target
business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our
initial business combination with more than one target business because of various factors, including the existence of complex accounting
issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the
financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business
combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory risks.
Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike
other entities which may have the resources to complete several business combinations in different industries or different areas of a
single industry.
Accordingly, the prospects for our success may be:
| ● | solely dependent upon the performance
of a single business, property or asset; or |
| ● | dependent upon the development
or market acceptance of a single or limited number of products, processes, services or potential products. |
This lack of diversification may subject us to numerous economic, competitive
and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent
to our initial business combination.
We may seek acquisition opportunities with an early-stage company,
a financially unstable business or an entity lacking an established record of revenue or earnings.
To the extent we complete our initial business combination with an
early-stage company, a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected
by numerous risks inherent in the operations of the business with which we combine. These risks include investing in a business without
a proven business model and with limited historical financial data, volatile revenues or earnings, intense competition and difficulties
in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent in a particular
target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not have adequate time
to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce
the chances that those risks will adversely impact a target business.
We may attempt to complete our initial business combination with
a private company about which little information is available, which may result in a business combination with a company that is not as
profitable as we suspected, if at all.
In pursuing our acquisition strategy, we may seek to effectuate our
initial business combination with a privately held company. Very little public information generally exists about private companies, and
we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information,
which may result in a business combination with a company that is not as profitable as we suspected, if at all.
We do not have a specified maximum redemption threshold. The
absence of such a redemption threshold may make it possible for us to complete a business combination with which a substantial majority
of our shareholders do not agree.
Our amended and restated memorandum and articles of association do
not provide a specified maximum redemption threshold, except that they currently provide that in no event will we redeem our public shares
in an amount that would cause our net tangible assets to be less than $5,000,001 either immediately prior to or upon completion of our
initial business combination (such that we do not then become subject to the SEC’s “penny stock” rules), or any greater
net tangible asset or cash requirement that may be contained in the agreement relating to our initial business combination. As a result,
we may be able to complete our initial business combination even though a substantial majority of our public shareholders do not agree
with the transaction and have redeemed their shares or, if we seek shareholder approval of our initial business combination and do not
conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately
negotiated agreements to sell their shares to our sponsor, officers, directors, advisors, any of their affiliates. We or our sponsor may
also engage a third-party purchaser to make such purchases from shareholders who would otherwise redeem their shares, in order to maintain
our public float and qualify for listing our shares on Nasdaq upon consummation of our initial business combination. In the event the
aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus
any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount
of cash available to us, we will not complete the business combination or redeem any shares, all Class A ordinary shares submitted for
redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial business combination, blank
check companies have, in the past, amended various provisions of their charters and modified governing instruments. At the extension meeting,
we will seek, and we may once again seek at a meeting to approved our initial business combination, to amend our amended and restated
memorandum and articles of association in a manner that will make it easier for us to complete our initial business combination, which
some of our shareholders may not support.
In order to effectuate an initial business combination, blank check
companies have, in the recent past, amended various provisions of their charters and modified governing instruments. For example, blank
check companies have amended the definition of business combination, increased redemption thresholds and extended the time to consummate
an initial business combination. Amending our amended and restated memorandum and articles of association requires at least a special
resolution of our shareholders as a matter of Cayman Islands law. A resolution is deemed to be a special resolution as a matter of Cayman
Islands law where it has been approved by either (1) at least two-thirds (or any higher threshold specified in a company’s articles
of association) of a company’s shareholders at a general meeting for which notice specifying the intention to propose the resolution
as a special resolution has been given or (2) if so authorized by a company’s articles of association, by a unanimous written resolution
of all of the company’s shareholders. Our amended and restated memorandum and articles of association provide that special resolutions
must be approved either by at least two-thirds of our shareholders who attend and vote at a shareholders meeting (i.e., the lowest threshold
permissible under Cayman Islands law) (other than amendments relating to the appointment or removal of directors prior to our initial
business combination, which require the approval of the holders of at least 90% of our ordinary shares as, being entitled to do so, vote
in a general meeting), or by a unanimous written resolution of all of our shareholders. At the extension meeting, we will seek to obtain
shareholder approval for amendments to our amended and restated memorandum and articles of association that will (i) provide for the extension
and (ii) enable our sponsor to convert its founder shares into Class A ordinary shares at any time prior to our initial business combination.
The second of these proposed amendments is intended to ease our compliance with the Nasdaq continued listing requirements prior to our
initial business combination, as the conversion of the founder shares will assist us in complying with the Nasdaq market value of listed
securities standard in the event of substantial redemptions in connection with the extension meeting. We cannot assure you that following
the extension meeting we will not seek to further amend our amended and restated memorandum and articles of association or governing instruments
or further extend the time to consummate an initial business combination in order to effectuate our initial business combination.
The provisions of our amended and restated memorandum and articles
of association that relate to our pre-business combination activity may be amended with the approval of holders of at least two-thirds
of our ordinary shares that, being entitled to do so, attend and vote at a general meeting, and corresponding provisions of the agreement
governing the release of funds from our trust account may be amended with the approval of holders of at least 65% of our then outstanding
ordinary shares who attend and vote at a general meeting, which is a lower amendment threshold than that of some other blank check companies.
It may be easier for us, therefore, to amend our amended and restated memorandum and articles of association and the trust agreement to
facilitate the completion of an initial business combination that some of our shareholders may not support.
Some other blank check companies have a provision in their charter
which prohibits the amendment of certain of its provisions, including those which relate to a company’s pre-business combination
activity, without approval by holders of a certain percentage of the company’s shares. In those companies, amendment of these provisions
typically requires approval by holders holding between 90% and 100% of the company’s public shares. Our amended and restated memorandum
and articles of association provide that any of their provisions, including those related to pre-business combination activity (including
the requirement to deposit proceeds of our initial public offering and the private placement of units into the trust account and not release
such amounts except in specified circumstances), may be amended if approved by holders of at least two-thirds of our ordinary shares who,
being entitled to do so, attend and vote in a general meeting (amendments relating to the appointment or removal of directors prior to
our initial business combination instead require the approval of at least 90% of our shares voting in a general meeting). Corresponding
provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of
our then outstanding ordinary shares. Our initial shareholders, who collectively beneficially own 20% of our shares, may participate in
any vote to amend our amended and restated memorandum and articles of association (other than any amendment materially adversely impacting
our public shares) and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able
to amend the provisions of our amended and restated memorandum and articles of association which govern our pre-business combination behavior
more easily than some other blank check companies, and this may increase our ability to complete our initial business combination with
which you do not agree. However, our amended and restated memorandum and articles of association prohibit any amendment of their provisions
(A) that would affect our public shareholders’ ability to convert or sell their shares to us in connection with a business combination
as described herein or to modify the substance or timing of the redemption rights provided to shareholders as described in this Annual
Report if we do not complete our initial business combination within 18 months (or, if the extension is approved, 24 months) from the
closing date of our initial public offering or (B) with respect to any other provision relating to shareholders’ rights or pre-initial
business combination activity, unless we provide public shareholders with the opportunity to redeem their public shares. Furthermore,
our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose such an amendment
unless we provide our public shareholders with the opportunity to redeem their public shares. In certain circumstances, our shareholders
may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
We may amend the terms of the warrants in a manner that may be
adverse to holders of public warrants with the approval by the holders of at least a majority of the then outstanding public warrants.
Our warrants have been issued in registered form under a warrant agreement
between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the
warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval
by the holders of at least a majority of the then outstanding public warrants to make any change that adversely affects the interests
of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder
if holders of at least a majority of the then outstanding public warrants approve of such amendment. Although our ability to amend the
terms of the public warrants with the consent of at least a majority of the then outstanding public warrants is unlimited, examples of
such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or
decrease the number of Class A ordinary shares purchasable upon exercise of a warrant.
Certain agreements related to our initial public offering may
be amended without shareholder approval.
Certain agreements, including the underwriting agreement relating to
our initial public offering, the investment management trust agreement between us and Continental Stock Transfer & Trust Company (other
than provisions contained therein governing the release of funds from our trust account), the letter agreement among us and our sponsor,
officers and directors, the registration rights agreement between us and our sponsor, and the administrative and support services agreement
between us and our sponsor, may be amended without shareholder approval. These agreements contain various provisions that our public shareholders
might deem to be material. For example, the underwriting agreement related to our initial public offering contained a covenant that the
target company that we acquire must have a fair market value equal to at least 80% of the balance in the trust account at the time of
signing the definitive agreement for the transaction with such target business (excluding (i) the deferred underwriting compensation to
be paid to Oppenheimer and Moelis upon the consummation of that transaction and (ii) taxes payable on the income earned on the trust account)
so long as we maintain a listing for our securities on the Nasdaq. While we do not expect our board to approve any amendment to any of
these agreements prior to our initial business combination, it may be possible that our board, in exercising its business judgment and
subject to its fiduciary duties, chooses to approve one or more amendments to any such agreement in connection with the consummation of
our initial business combination. Any such amendment may have an adverse effect on the value of an investment in our securities.
Because we must furnish our shareholders with target business
financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective
target businesses.
The federal proxy rules require that a proxy statement with respect
to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial statement
disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender offer documents,
whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance
with, or be reconciled to, accounting principles generally accepted in the United States of America, or U.S. GAAP, or international financing
reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical
financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United
States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some
targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal
proxy rules and complete our initial business combination within the prescribed time frame.
We are an emerging growth company and a smaller reporting company
within the meaning of the Securities Act, and we take advantage of certain exemptions from disclosure requirements available to emerging
growth companies or smaller reporting companies, which could make our securities less attractive to investors and may make it more difficult
to compare our performance with other public companies.
We are an “emerging growth company” within the meaning
of the Securities Act, as modified by the JOBS Act, and we take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding
executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory
vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a result, our shareholders
do not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although
circumstances could cause us to lose that status earlier, including if the market value of our ordinary shares held by non-affiliates
exceeds $700 million as of the end of any second quarter of a fiscal year, in which case we would no longer be an emerging growth company
as of the end of such fiscal year. We cannot assure you that investors will not find our securities less attractive because we rely on
these exemptions, which may cause the trading prices of our securities to be lower than they otherwise would be. There may also be a less
active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth
companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that
have not had a Securities Act registration statement declared effective or do not have a class of securities registered under
the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides
that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth
companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means
that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth
company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison
of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which
has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards
used.
Additionally, we are a “smaller reporting company” as defined
in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations,
including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until
the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds $250 million as of
the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during such completed fiscal year
and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal
quarter. Because we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with
other public companies difficult or impossible.
Compliance obligations under the Sarbanes-Oxley Act may
make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources,
and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act requires that we evaluate and
report on our system of internal controls beginning with this Annual Report on Form 10-K. We are not deemed to be a large accelerated
filer or an accelerated filer, and we qualify as an emerging growth company; therefore, we are not required to comply with the independent
registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we
remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation
requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements
of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target company with
which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding
adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley
Act may increase the time and costs necessary to complete any such acquisition.
We may be deemed a “foreign
person” and therefore may not be able to complete our business combination because such transaction may be subject to regulatory
review and approval requirements, including pursuant to foreign investment regulations and review by governmental entities such as the
Committee on Foreign Investment in the United States, or may be ultimately prohibited.
Our sponsor, Cactus Healthcare
Management LP, is controlled by non-U.S. persons. While we are focusing our search on technology-based healthcare businesses that are
domiciled in Israel, that carry out all or a substantial portion of their activities in Israel, or that have some other significant Israeli
connection, we may pursue a business combination target in any business or industry and across any geographical region, including in the
United States. Certain transactions in the United States are subject to specific rules or regulations that may limit, prohibit, or create
additional requirements with respect to foreign ownership of a U.S. company. In particular, our initial business combination, if effected
with a U.S. target company, may be subject to regulatory review and approval requirements by governmental entities, or ultimately prohibited.
For example, the Committee on Foreign Investment in the United States (“CFIUS”) has authority to review certain direct or
indirect foreign investments in U.S. companies. Among other things, CFIUS is empowered to require certain foreign investors to make mandatory
filings, to charge filing fees related to such filings, and to self-initiate national security reviews of foreign direct and indirect
investments in U.S. companies if the parties to that investment choose not to file voluntarily. If CFIUS determines that an investment
threatens national security, CFIUS has the power to impose restrictions on the investment or recommend that the President of the United
States prohibit it or order divestment. Whether CFIUS has jurisdiction to review an acquisition or investment transaction depends on,
among other factors, the nature and structure of the transaction, the nationality of the parties, the level of beneficial ownership interest
and the nature of any information or governance rights involved.
As such, a business combination
with a U.S. business or foreign business with U.S. operations that we may wish to pursue may be subject to CFIUS review. If a particular
proposed business combination with a U.S. business falls within CFIUS’s jurisdiction, we may determine that we are required to make
a mandatory filing or that we will submit to CFIUS review on a voluntary basis, or to proceed with the transaction without submitting
to CFIUS and risk CFIUS intervention, before or after closing the transaction. CFIUS may decide to delay or recommend that the President
of the United States block our proposed initial business combination, require conditions with respect to such initial business combination
or recommend that the President of the United States order us to divest all or a portion of the U.S. target business of our business combination
that we acquired without first obtaining CFIUS approval, which may limit the attractiveness of, or delay or prevent us from pursuing,
certain target companies that we believe would otherwise be beneficial to us and our shareholders. In addition, certain types of U.S.
businesses may be subject to rules or regulations that limit or impose requirements with respect to foreign ownership.
If CFIUS determines it has jurisdiction,
CFIUS may decide to recommend a block or delay our business combination, or require conditions with respect to it, which may delay or
prevent us from consummating a potential transaction. It is unclear at this stage whether our potential business combination transaction
would fall within CFIUS’s jurisdiction, and if so, whether we would be required to make a mandatory filing or determine to submit
a voluntary notice to CFIUS.
The process of government review,
whether by CFIUS or otherwise, could be lengthy. Because we have only a limited amount time left to complete our business combination,
our failure to obtain any required approvals within the requisite time period may require us to liquidate. If we are unable to consummate
our initial business combination within the applicable time period required, including as a result of extended regulatory review, we will,
as promptly as reasonably possible, redeem the public shares for a pro rata portion of the funds held in the trust account and as promptly
as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate
and dissolve, subject in each case to our obligations under Cayman law to provide for claims of creditors and the requirements of other
applicable law. In such event, our shareholders will miss the opportunity to benefit from an investment in a target company and the chance
of realizing future gains through any price appreciation in the combined company. Additionally, our warrants will become worthless. As
a result, the pool of potential targets with which we could complete a business combination may be limited and we may be adversely affected
in terms of competing with other special purpose acquisition companies which do not have similar ties to non-U.S. persons.
Resources could be wasted in researching acquisitions that are
not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we
are unable to complete our initial business combination, our public shareholders may receive only approximately $10.20 per share, or less
than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
The investigation of each specific target business and the negotiation,
drafting and execution of relevant agreements, disclosure documents and other instruments requires substantial management time and attention
and substantial costs for accountants, attorneys and others. If we decide not to complete a specific initial business combination, the
costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating
to a specific target business, we may fail to complete our initial business combination for any number of reasons including those beyond
our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent
attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public
shareholders may receive only approximately $10.20 per share on the liquidation of our trust account and our warrants will expire worthless.
See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share
redemption amount received by shareholders may be less than $10.20 per share” and other risk factors.
Risks Relating to the Post-Business Combination Company
If we effect a business combination with a company located in
Israel or another foreign jurisdiction, we would be subject to a variety of additional risks that may negatively impact our operations.
If we pursue a target company with operations or opportunities in Israel
or elsewhere outside of the United States for our initial business combination, we may face additional burdens in connection with investigating,
agreeing to and completing such initial business combination, and if we effect such initial business combination, we would be subject
to a variety of additional risks that may negatively impact our operations.
For example, we would be subject to risks associated with cross-border
business combinations, including in connection with conducting due diligence in a foreign jurisdiction, having such transaction approved
by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates. If
we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated
with companies operating in an international setting, including any of the following:
| ● | costs and difficulties inherent
in managing cross-border business operations; |
| ● | rules and regulations regarding
currency redemption; |
| ● | complex corporate withholding
taxes on individuals; |
| ● | exchange listing and/or delisting
requirements; |
| ● | tariffs and trade barriers; |
| ● | regulations related to customs
and import/export matters; |
| ● | local or regional economic
policies and market conditions; |
| ● | transparency issues in general
and, more specifically, the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and other anti-corruption compliance laws and issues; |
| ● | unexpected changes in regulatory
requirements; |
| ● | challenges in managing and
staffing international operations; |
| ● | tax issues, such as tax law
changes and variations in tax laws as compared to the United States; |
| ● | currency fluctuations and exchange
controls; |
| ● | challenges in collecting accounts
receivable; |
| ● | cultural and language differences; |
| ● | underdeveloped or unpredictable
legal or regulatory systems; |
| ● | protection of intellectual
property; |
| ● | social unrest, crime, strikes,
riots and civil disturbances; |
| ● | regime changes and political
upheaval; |
| ● | terrorist attacks and wars; |
| ● | adverse impacts from Russia’s
invasion of Ukraine, including increased use of less cost-efficient resources and exacerbation of existing international supply chain
back-ups; and |
| ● | deterioration of political
relations with the United States. |
We may not be able to adequately address these additional risks. If
we were unable to do so, we may be unable to complete such initial business combination, or, if we complete such initial business combination,
our operations might suffer, either of which may adversely impact our business, financial condition and results of operations.
If our management following our initial business combination
is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws, which could
lead to various regulatory issues.
Following our initial business combination, any or all of our management
could resign from their positions as officers of the Company, and the management of the target business at the time of the business combination
will remain in place. Management of the target business may not be familiar with United States securities laws. If new management is unfamiliar
with United States securities laws, they may have to expend time and resources becoming familiar with such laws. This could be expensive
and time-consuming and could lead to various regulatory issues which may adversely affect our operations.
After our initial business combination, substantially all of
our assets may be located in a foreign country and substantially all of our revenue will be derived from our operations in such country.
Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and legal policies,
developments and conditions in the country in which we operate.
The economic, political and social conditions, as well as government
policies, of the country in which our operations are located could affect our business. Economic growth could be uneven, both geographically
and among various sectors of the economy and such growth may not be sustained in the future. If in the future such country’s economy
experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in certain industries. A decrease
in demand for spending in certain industries could materially and adversely affect our ability to find an attractive target business with
which to consummate our initial business combination and if we effect our initial business combination, the ability of that target business
to become profitable.
Exchange rate fluctuations and currency policies may diminish
a target business’ ability to succeed in the international markets.
In the event we acquire a non-U.S. target, such as an Israel-centered
entity, as we are planning to do, a substantial portion of revenues and income of the target business may be received in a foreign currency,
as well as a substantial portion of its expenses paid in a foreign currency, whereas its financial results will likely be recorded in
U.S. dollars. As a result, the target business’ financial results could be adversely affected by fluctuations in the value of local
currencies relative to the U.S. dollar. The value of the currency in our target region - Israel - fluctuates relative to the U.S. dollar
and is affected by, among other things, changes in political and economic conditions. Any change in the relative value of that currency
against our reporting currency may affect the attractiveness of any target business or, following consummation of our initial business
combination, our financial condition and results of operations. Additionally, if a currency such as the Israeli currency (the New Israeli
Shekel) appreciates in value against the U.S. dollar prior to the consummation of our initial business combination, the cost of a target
business as measured in dollars will increase, which may make it less likely that we are able to consummate a transaction with that business.
Subsequent to the completion of our initial business combination,
we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative
effect on our financial condition, results of operations and our share price, which could cause you to lose some or all of your investment.
Even though we conduct extensive due diligence on a potential target
business with which we may combine, we cannot assure you that this diligence will identify all material issues that may be present with
a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or
that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced
to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting
losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize
in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate
impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our
securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result
of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any
shareholder or warrant holder who chooses to remain a shareholder or warrant holder following our initial business combination could suffer
a reduction in the value of their securities. Such shareholders and warrant holders are unlikely to have a remedy for such reduction in
value.
We may have limited ability to assess the management of a prospective
target business and, as a result, may effect our initial business combination with a target business whose management may not have the
skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting our initial business
combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack
of time, resources or information. Our assessment of the capabilities of the target’s management, therefore, may prove to be incorrect
and such management may lack the skills, qualifications or abilities we suspected. Should the target’s management not possess the
skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business
may be negatively impacted. Accordingly, shareholders or warrant holders who choose to remain shareholders or warrant holders following
our initial business combination could suffer a reduction in the value of their securities. Such shareholders or warrant holders are unlikely
to have a remedy for such reduction in value.
The officers and directors of an acquisition candidate may resign upon
completion of our initial business combination. The departure of a business combination target’s key personnel could negatively
impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s key personnel upon
the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of
an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business
combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
Our management may not be able to maintain control of a target
business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business, new management
will possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure a business combination so that the post-transaction
company in which our public shareholders own shares will own less than 100% of the equity interests or assets of a target business, but
we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding
voting securities of the target or otherwise acquires a controlling interest in the target sufficient for us not to be required to register
as an investment company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even
if the post-transaction company owns 50% or more of the voting securities of the target, our shareholders prior to the business combination
may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and
us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new Class
A ordinary shares in exchange for all of the issued and outstanding capital stock, shares and/or other equity interests of a target. In
this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new ordinary
shares, our shareholders immediately prior to such transaction could own less than a majority of our issued and outstanding ordinary shares
subsequent to such transaction. In addition, other minority shareholders may subsequently combine their holdings resulting in a single
person or group obtaining a larger share of the company’s shares than we initially acquired. Accordingly, this may make it more
likely that our management will not be able to maintain our control of the target business.
Risks Relating to our Management Team
Our ability to successfully effect our initial business combination
and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following our
initial business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination
business.
Our ability to successfully effect our initial business combination
is dependent upon the efforts of our key personnel, including Nachum (Homi) Shamir, our Chairman of the Board, Ofer Gonen, our CEO, and
Stephen T. Wills, our CFO. The role of our key personnel in the target business, however, cannot presently be ascertained. Although some
of our key personnel may remain with the target business in senior management, board member or advisory positions following our initial
business combination, it is likely that some or all of the management of the target business will remain in place. While we intend to
closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment of these
individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the
SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
In addition, the officers and directors of an acquisition candidate
may resign upon completion of our initial business combination. The departure of a business combination target’s key personnel could
negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s key
personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain
members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial
business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place. The
loss of key personnel could negatively impact the operations and profitability of our post-combination business.
Our key personnel may negotiate employment or consulting agreements
with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation
following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular
business combination is the most advantageous.
Our key personnel may be able to remain with the company after the
completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with
the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could
provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render
to us after the completion of the business combination. The personal and financial interests of such individuals may influence their motivation
in identifying and selecting a target business, subject to their fiduciary duties under Cayman Islands law. However, we believe the ability
of such individuals to remain with us after the completion of our initial business combination will not be the determining factor in our
decision as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any of our
key personnel will remain with us after the completion of our initial business combination. We cannot assure you that any of our key personnel
will remain in senior management or advisory positions with us. The determination as to whether any of our key personnel will remain with
us will be made at the time of our initial business combination.
Past performance by the companies in which our management team
and our sponsor’s members and affiliates have been involved may not be indicative of future performance of an investment in us.
Information regarding performance by, or businesses associated with,
our management team and sponsor’s members and affiliates is presented for informational purposes only. Past performance by our management
team and sponsor’s members and affiliates is not a guarantee either (i) of success with respect to any business combination we may
consummate or (ii) that we will be able to locate a suitable candidate for our initial business combination. You should not rely on the
historical record of our management team and sponsor’s members and affiliates as indicative of our future performance and you may
lose all or part of your invested capital. Additionally, in the course of their respective careers, members of our management team and
our sponsor’s members and affiliates have been involved in businesses and deals that were unsuccessful. None of our officers, directors
or the partners or affiliates of our sponsor have had management experience with blank check companies or special purpose acquisition
corporations in the past.
Certain of our officers and directors are now, and all of them
may in the future become, affiliated with entities engaged in business activities similar to those conducted by us and, accordingly, may
have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Until we consummate our initial business combination, we engage in
the business of identifying and combining with one or more businesses. Our sponsor and officers and directors are, or may in the future
become, affiliated with entities such as operating companies or investment vehicles that are engaged in making and managing investments
in similar businesses.
Our officers and directors also may become aware of business opportunities
which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary or contractual duties. Accordingly,
they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts
may not be resolved in our favor and a potential target business may be presented to other entities prior to its presentation to us, subject
to his or her fiduciary duties under Cayman Islands law.
For a complete discussion of our officers’ and directors’
business affiliations and the potential conflicts of interest that you should be aware of, please see “Item 10. Directors, Executive
Officers and Corporate Governance,” and “Item 13. Certain Relationships and Related Transactions, and Director Independence.”
Since our initial shareholders will lose their entire investment
in us if our initial business combination is not completed (other than with respect to any public shares they may acquire), a conflict
of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
Prior to our initial public offering, our sponsor purchased an aggregate
of 2,875,000 founders shares for an aggregate purchase price of $25,000. Prior to the initial investment in the company of $25,000 by
our sponsor, the company had no assets, tangible or intangible. In October 2021, we effected a share dividend of 0.1 shares for each share
then outstanding, thereby resulting in 3,162,500 Class B ordinary shares outstanding and held by our sponsor. Simultaneously with the
closing of our initial public offering, our sponsor purchased warrants to purchase an additional 4,866,667 Class A ordinary shares. Disregarding
the additional Class A ordinary shares underlying those warrants (and the shares underlying warrants sold in our initial public offering
as part of the units), our sponsor owns 20.0% of our issued and outstanding shares. The founders shares will be worthless if we do not
complete an initial business combination. The founders shares— which are Class B ordinary shares— are identical to the Class
A ordinary shares included in the units as part of our initial public offering except that until the consummation of our initial business
combination transaction, only the founders shares have the right to vote on the appointment of directors. In addition, both the founders
(Class B ordinary) shares and the private (Class A ordinary) warrants (and shares underlying those warrants) purchased by the sponsor
concurrently with the offering are subject to certain transfer restrictions (unlike public shares). Furthermore, our sponsor, officers
and directors have entered into a letter agreement with us, pursuant to which they have agreed (A) to waive their redemption rights with
respect to their shares in connection with the completion of our initial business combination and (B) to waive their rights to liquidating
distributions from the trust account with respect to their founders shares if we fail to complete our initial business combination within
18 months or, if the extension is approved, 24 months, from the closing date of our initial public offering (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 prescribed time frame), as described herein and in our amended and restated memorandum and articles of association.
The personal and financial interests of our sponsor, officers and directors
may influence their motivation in identifying and selecting a target business combination, completing an initial business combination
and influencing the operation of the business following the initial business combination. This risk may become more acute as the 18-month
or, if the extension is approved, 24-month, deadline following the closing date of our initial public offering nears, which is the deadline
for the completion of our initial business combination.
Since our sponsor, officers and directors, or any of their respective
affiliates, will be reimbursed for any bona-fide, documented out-of-pocket expenses if our initial business combination is not completed,
a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business
combination.
At the closing of our initial business combination, our sponsor, officers
and directors, or any of their respective affiliates, will be reimbursed for any bona-fide, documented 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. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred in connection with activities on our
behalf. In addition, our sponsor may seek certain indemnities from us or from the surviving entity in our initial business combination.
These financial interests of our sponsor, officers and directors may influence their motivation in identifying and selecting a target
business combination and completing an initial business combination, even if it is not in the best interests of our other shareholders.
Changes in the market for directors and officers liability insurance
could make it more difficult and more expensive for us to negotiate and complete an initial business combination.
In the recent period of time, the market for directors and officers
liability insurance for special purpose acquisition companies has changed. The premiums charged for such policies have generally increased
and the terms of such policies have generally become less favorable. There can be no assurance that these trends will not continue.
The increased cost and decreased availability of directors and officers
liability insurance could make it more difficult and more expensive for us to negotiate an initial business combination. In order to obtain
directors and officers liability insurance or modify its coverage as a result of becoming a public company, the post-business combination
entity might need to incur greater expense, accept less favorable terms or both. However, any failure to obtain adequate directors and
officers liability insurance could have an adverse impact on the post-business combination’s ability to attract and retain qualified
officers and directors.
In addition, even after we were to complete an initial business combination,
our directors and officers could still be subject to potential liability from claims arising from conduct alleged to have occurred prior
to the initial business combination. As a result, in order to protect our directors and officers, the post-business combination entity
will likely need to purchase additional insurance with respect to any such claims (“run-off insurance”). The need for run-off
insurance would be an added expense for the post-business combination entity and could interfere with or frustrate our ability to consummate
an initial business combination on terms favorable to our investors.
Risks Relating to our Securities
Nasdaq may delist our securities from trading on its exchange,
which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
As described above (under the risk factor titled –“We may
not remain qualified for continued listing, or qualify for initial listing for the combined company, in each case, on the Nasdaq Stock
Market, following the extension meeting or the shareholder meeting at which the approval of our initial business combination is sought,
respectively”), we cannot assure you that our securities will continue to be listed on Nasdaq prior to, or upon, our initial business
combination.
If Nasdaq delists any of our securities from trading on its exchange
and we are not able to list such securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter
market. If this were to occur, we could face significant material adverse consequences, including:
| ● | a limited availability of market
quotations for our securities; |
| ● | reduced liquidity with respect
to such securities; |
| ● | a determination that our Class
A ordinary shares are a “penny stock” which will require brokers trading in our Class A ordinary shares to adhere to more
stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our securities; |
| ● | a limited amount of news and
analyst coverage for our company; and |
| ● | a decreased ability to issue
additional securities or obtain additional financing in the future. |
The National Securities Markets Improvement Act of 1996, which is a
federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered
securities.” Because our units, Class A ordinary shares and warrants are listed on Nasdaq, our units, Class A ordinary shares and
warrants qualify as covered securities under such statute. Although the states are preempted from regulating the sale of covered securities,
the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent
activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having
used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain
state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder
the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would
not qualify as covered securities under such statute, and we would be subject to regulation in each state in which we offer our securities.
Our initial shareholders control the appointment of our board
of directors until completion of our initial business combination and hold a substantial interest in us. As a result, they appoint all
of our directors prior to our initial business combination and may exert a substantial influence on actions requiring shareholder vote,
potentially in a manner that you do not support.
Our initial shareholders own 20% of our issued and outstanding ordinary
shares. In addition, prior to our initial business combination, only the founders shares, all of which are held by our initial shareholders,
have the right to vote on the appointment of directors (including at the upcoming extension meeting), and holders of a majority of our
founders shares may remove a member of the board of directors for any reason. Neither our initial shareholders nor, to our knowledge,
any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this Annual
Report. Factors that would be considered in making such additional purchases would include consideration of the current trading price
of our Class A ordinary shares. In addition, as a result of their substantial ownership in our company, our initial shareholders may exert
a substantial influence on other actions requiring a shareholder vote, potentially in a manner that you do not support, including amendments
to our amended and restated memorandum and articles of association and approval of major corporate transactions. The purchase by our initial
shareholders of any Class A ordinary shares, including in the aftermarket or in privately negotiated transactions, would increase their
influence over these actions. Accordingly, our initial shareholders exert significant influence over actions requiring a shareholder vote
at least until the completion of our initial business combination.
A provision of our warrant agreement may make it more difficult
for us to consummate an initial business combination.
If:
(i) we issue additional Class A ordinary shares or equity-linked securities
for capital raising purposes in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20
per Class A ordinary share;
(ii) the aggregate gross proceeds from such issuances represent more
than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date
of the completion of our initial business combination (net of redemptions), and
(iii) the Market Value is below $9.20 per share,
then the exercise price of the warrants will be adjusted to be equal
to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted
(to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. This may make it more difficult
for us to consummate an initial business combination with a target business.
We may redeem your unexpired warrants prior to their exercise
at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem outstanding warrants at any time after
they become exercisable and prior to their expiration, at a price of $0.01 per warrant; provided that the last reported sales price of
our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share capitalizations, rights issuances,
subdivisions, reorganizations, recapitalizations and the like or as indicated above) for any 20 trading days within a 30 trading-day period
commencing on the date they become exercisable and ending on the third trading day prior to the date we send the notice of redemption
to the warrant holders. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to
register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants
could force you to: (1) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to
do so; (2) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants; or (3) accept the
nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than
the market value of your warrants. None of the private warrants will be redeemable by us so long as they are held by our sponsor or its
permitted transferees.
Our warrants contained in our units, together with our founders
shares and private warrants, may have an adverse effect on the market price of our Class A ordinary shares and make it more difficult
to effectuate our initial business combination.
We issued, as part of the 12,650,000 units that we offered, warrants
to purchase 6,325,000 Class A ordinary shares with an exercise price of $11.50 per warrant (subject to adjustment as provided herein),
and, simultaneously with the closing of our initial public offering, we sold in a private placement an aggregate of 4,866,667 private
warrants, each exercisable to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as provided herein.
Our sponsor currently holds 3,162,500 founders shares. In addition, if our sponsor, an affiliate of our sponsor or certain of our officers
and directors make any working capital loans, up to $1,500,000 of such loans may be converted into warrants, at the price of $1.50 per
warrant, at the option of the lender. Such warrants would be identical to the private warrants. To the extent we issue ordinary shares
to effectuate a business transaction, the potential for the issuance of a substantial number of additional Class A ordinary shares upon
exercise of these warrants or conversion rights could make us a less attractive acquisition vehicle to a target business. Any such issuance
will increase the number of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares issued
to complete the business transaction. Therefore, our warrants and founders shares may make it more difficult to effectuate a business
combination or increase the cost of acquiring the target business.
The private warrants are identical to the warrants sold as part of
our initial public offering units except that, so long as they are held by our sponsor or its permitted transferees: (1) they will not
be redeemable by us; (2) they (including the ordinary shares issuable upon exercise of these warrants) may not, subject to certain limited
exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination; and
(3) they (including the ordinary shares issuable upon exercise of these warrants) are entitled to registration rights with respect to
the resale thereof.
There is currently a limited market for our securities, which
could adversely affect the liquidity and price of our securities.
Shareholders have limited access to information about prior market
history on which to base their investment decision. The price of our securities may vary significantly due to one or more potential business
combinations and general market or economic conditions. Furthermore, an active trading market for our securities may never develop or,
if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.
Because we are incorporated under the laws of the Cayman Islands,
you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. Federal courts may be
limited.
We are an exempted company incorporated under the laws of the Cayman
Islands. As a result, it may be difficult for investors to effect service of process within the United States upon our directors or officers,
or enforce judgments obtained in the United States courts against our directors or officers. Our corporate affairs are governed by our
amended and restated memorandum and articles of association, the Companies Act (as the same may be supplemented or amended from time to
time) and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders
and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of
the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman
Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court
in the Cayman Islands. We are also subject to the federal securities laws of the United States. The rights of our shareholders and the
fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under statutes or judicial
precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared
to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate
law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the
United States.
We have been advised by our Cayman Islands legal counsel that the courts
of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the
civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the
Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the
United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although
there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will
recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the
principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment
has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be
final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands
judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of
which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held
to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought
elsewhere.
As a result of all of the above, public shareholders may have more
difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling
shareholders than they would as public shareholders of a United States company.
Our amended and restated memorandum and articles of association
provide that unless we consent to an alternate forum, the federal district courts of the United States shall be the exclusive forum of
resolution of any claims arising under the Securities Act, which may impose additional litigation costs on our shareholders.
Our amended and restated memorandum and articles
of association provide that, unless we consent otherwise, the federal district courts of the United States shall be the exclusive forum
for the resolution of any claims arising under the Securities Act (for the sake of clarification, this provision does not apply to causes
of action arising under the Exchange Act). While this provision of our amended and restated memorandum and articles
of association does not restrict the ability of our shareholders to bring claims under the Securities Act, nor does it affect the remedies
available thereunder if such claims are successful, we recognize that it may limit shareholders’ ability to bring a claim in a judicial
forum that they find favorable and may increase certain litigation costs which may discourage the filing of claims under the Securities
Act against us, our directors and our officers. However, the enforceability of similar forum provisions in other companies’ organizational
documents has been challenged in legal proceedings and there is uncertainty as to whether courts would enforce the exclusive forum provisions
in our amended and restated articles of association. If a court were to find the choice of forum provision contained in our amended and
restated memorandum and articles of association to be inapplicable or unenforceable in an action, we may incur additional
costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition
and results of operations.
Our amended and restated articles of association provide that
unless we consent otherwise, the courts of the Cayman Islands shall have sole and exclusive jurisdiction for all disputes between our
company and our shareholders under the Companies Act.
Unless we consent otherwise, the courts of the Cayman Islands shall
have exclusive jurisdiction over any claim or dispute arising out of or in connection with our memorandum and articles of association
or otherwise related in any way to each shareholder’s shareholding in the company, including but not limited to (i) any derivative
action or proceeding brought on behalf of our company, (ii) any action asserting a claim of breach of fiduciary duty owed by any director,
officer or other employee of our company to our company or our company’s shareholders, or (iii) any action asserting a claim arising
pursuant to any provision of the Companies Act and each shareholder shall be deemed to have irrevocably submitted to the exclusive jurisdiction
of the courts of the Cayman Islands over all such claims or disputes. Without prejudice to any other rights or remedies that we may have,
each shareholder shall also be deemed to have acknowledged and agreed that damages alone would not be an adequate remedy for any breach
of this exclusive forum provision in our memorandum and articles and that accordingly we will be entitled, without proof of special damages,
to the remedies of injunction, specific performance or other equitable relief for any threatened or actual breach of this provision. This
exclusive forum provision is intended to apply to claims arising under Cayman Islands law and would not apply to claims brought pursuant
to the Securities Act or the Exchange Act or any other claim for which federal courts would have exclusive jurisdiction. Such exclusive
forum provision in our amended and restated memorandum and articles of association will not relieve our company of its duties to comply
with federal securities laws and the rules and regulations thereunder, and shareholders of our company will not be deemed to have waived
our compliance with these laws, rules and regulations. This exclusive forum provision may limit a shareholder’s ability to bring
a claim in a judicial forum of its choosing for disputes with our company or our directors or officers which may discourage lawsuits against
our company, our directors, and our officers.
However, there is uncertainty as to whether courts would enforce the
exclusive forum provisions in our amended and restated memorandum and articles of association. If a court were to find the choice of forum
provision contained in our amended and restated memorandum and articles of association to be inapplicable or unenforceable in an action,
we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our
business, financial condition and results of operations.
Provisions in our amended and restated memorandum and articles
of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class
A ordinary shares and could entrench management.
Our amended and restated memorandum and articles of association contain
provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests. These provisions
include two-year director terms and the ability of the board of directors to designate the terms of and issue new series of preference
shares, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of
a premium over prevailing market prices for our securities.
After our initial business combination, it is possible that a
majority of our directors and officers will live outside the United States and all or substantially of our assets will be located outside
the United States; therefore, investors may not be able to enforce federal securities laws or their other legal rights.
It is possible that after our initial business combination, a majority
of our directors and officers will reside outside of the United States and all or substantially all of our assets will be located outside
of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United States to enforce their
legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United States courts predicated
upon civil liabilities and criminal penalties on our directors and officers under United States laws.
An investment in our securities may result in uncertain or adverse
United States federal income tax consequences.
An investment in our securities may result in uncertain United States
federal income tax consequences. For instance, because there are no authorities that directly address instruments similar to the units
that we issued in our initial public offering, the allocation an investor makes with respect to the purchase price of a unit between the
Class A ordinary share and the one-half warrant included in each unit could be challenged by the IRS or the courts. Furthermore, it is
unclear whether the redemption rights with respect to our ordinary shares suspend the running of a U.S. holder’s holding period
for purposes of determining whether any gain or loss realized by such holder on the sale or exchange of Class A ordinary shares is long-term
capital gain or loss and for determining whether any dividend we pay would be considered “qualified dividends” for federal
income tax purposes. Prospective investors are urged to consult their tax advisors with respect to these and other tax consequences when
purchasing, holding or disposing of our securities.
If a shareholder fails to receive notice of our offer to redeem
our public shares in connection with our extension meeting or initial business combination, or fails to comply with the procedures for
tendering its shares, such shares may not be redeemed.
We will comply with the tender offer rules or proxy rules, as applicable,
when conducting redemptions in connection with the extension meeting and our initial business combination. Despite our compliance with
these rules, if a shareholder fails to receive our tender offer or proxy materials, as applicable, such shareholder may not become aware
of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that we are distributing
in connection with the extension meeting and that we will furnish to holders of our public shares in connection with our initial business
combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares. In the
event that a shareholder fails to comply with these procedures, its shares may not be redeemed. See “Item 1. Business— Effecting
a Business Combination— Redemption Rights.”
The warrants that are part of the units that we offered publicly
and issued privately, together with our grant of registration rights to our sponsor and others, may have an adverse effect on the market
price of our Class A ordinary shares and may make it more difficult for us to complete our initial business combination.
We issued warrants to purchase up to 6,325,000 ordinary shares at a
price of $11.50 per share (subject to adjustment as provided herein) as part of the 12,650,000 units that we sold as part of our initial
public offering following the full exercise of the over-allotment option. Furthermore, simultaneously with the closing of our initial
public offering, we issued to our sponsor in a private placement an aggregate of 4,866,667 private warrants. Each warrant is exercisable
to purchase one ordinary share at a price of $11.50 per share, subject to adjustment as provided herein. In addition, if our sponsor makes
any working capital loans, up to $1,500,000 of such loans may be converted into warrants, at a price of $1.50 per warrant, at the option
of the lender. Such warrants would be identical to the private warrants.
Pursuant to an agreement that was entered into concurrently with the
issuance and sale of the securities in our initial public offering, our sponsor, management team and their permitted transferees can demand
that we register the resale of their founders shares beginning at the time of our initial business combination. In addition, our sponsor,
as the holder of our private warrants, and its permitted transferees, can demand that we register the resale of the private warrants,
or the Class A ordinary shares issuable upon exercise of the private warrants. Holders of warrants that may be issued upon conversion
of working capital loans, may demand that we register the resale of those warrants, or the issuance of Class A ordinary shares upon exercise
of those warrants.
The potential issuance of shares underlying our various groups of warrants,
together with the foregoing registration rights with respect to those shares and other shares, will allow, potentially, a significant,
additional number of our Class A ordinary shares to become available for trading in the public market. That potential development may
have an adverse effect on the market price of our Class A ordinary shares even without there being actual additional issuances or resales.
In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude.
The shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration
to offset the negative impact on the market price of our Class A ordinary shares that is expected from the potential resale of the Class
A ordinary shares owned by our sponsor, or issuable upon exercise of the private warrants or conversion of working capital loans or their
respective permitted transferees. Those resales are enabled by the registration rights.
We may issue additional Class A ordinary shares or preference
shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination.
We may also issue Class A ordinary shares upon the conversion of the founders shares at a ratio greater than one-to-one at the time of
our initial business combination as a result of the anti-dilution provisions contained in our amended and restated memorandum and articles
of association. Any such issuances would substantially dilute the interest of our shareholders and likely present other risks.
Our amended and restated memorandum and articles of association authorizes
the issuance of ordinary shares, including 500,000,000 Class A ordinary shares, par value $0.0001 per share, and 50,000,000 Class B ordinary
shares, par value $0.0001 per share, as well as 5,000,000 preference shares, par value $0.0001. Following our initial public offering,
there are 487,350,000 and 46,837,500 authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available
for issuance, which amounts include (in the case of Class A ordinary shares) shares reserved for issuance upon exercise of outstanding
warrants, and 5,000,000 authorized but unissued preference shares available for issuance.
Our sponsor paid a nominal price for its acquisition of the founders
shares. We may furthermore issue additional Class A ordinary shares or other securities to complete our initial business combination
or under an employee incentive plan after completion of our initial business combination. Any such issuances would dilute the interest
of our shareholders further and likely present other risks.
Our sponsor acquired the founders shares and representative shares,
respectively, at nominal prices, significantly contributing to the dilution to investors in our initial public offering.
The authorized share capital under our amended and restated memorandum
and articles of association also presents the possibility of additional, substantial dilution. Under those charter documents, we are authorized
to issue up to 500,000,000 Class A ordinary shares, par value $0.0001 per share, up to 50,000,000 Class B ordinary shares, par value $0.0001
per share, and up to 5,000,000 preference shares, par value $0.0001 per share. Following our initial public offering, there are 487,350,000
and 46,837,500 authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance, some
of which Class A ordinary shares are reserved for issuance upon exercise of issued and outstanding warrants, and upon conversion of outstanding
Class B ordinary shares. Class B ordinary shares are convertible into Class A ordinary shares, initially at a one-for-one ratio but subject
to adjustment as set forth herein and in our amended and restated memorandum and articles of association.
We may issue a substantial number of additional Class A ordinary share
in order to complete our initial business combination or under an employee incentive plan after completion of our initial business combination.
We may also issue Class A ordinary shares upon conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time
of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated memorandum and articles
of association. Our amended and restated memorandum and articles of association provide, among other things, that prior to our initial
business combination, we may not issue additional ordinary shares that would entitle the holders thereof to (i) receive funds from the
trust account or (ii) vote on any initial business combination.
Our potential target company, if it is the acquirer in a business combination
with us, may issue to our shareholders in the business combination shares constituting a minority of the outstanding shares of the combined
company.
The issuance of additional ordinary shares in any of the above-described
scenarios:
| ● | may significantly dilute the
equity interest of investors in our initial public offering; |
| ● | could cause a change in control
if a substantial number of ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss
carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and |
| ● | may adversely affect prevailing
market prices for our (or the target company’s) Class A ordinary shares (or other class of ordinary/common shares) and/or warrants. |
Unlike certain other blank check companies, our initial shareholder
will receive additional Class A ordinary shares if we issue shares to consummate an initial business combination.
The founders shares will automatically convert into Class A ordinary
shares on the first business day following the completion of our initial business combination on a one-for-one basis, subject to adjustment
as provided herein. At the extension meeting, we are seeking approval for a proposal that will also allow the founders shares to be converted
into Class A ordinary shares prior to the consummation of our initial business combination. In the case that additional Class A ordinary
shares, or equity-linked securities convertible or exercisable for Class A ordinary shares, are issued or deemed issued in excess of the
amounts issued in our initial public offering and related to the closing of our initial business combination, the ratio at which founders
shares will convert into Class A ordinary shares will be adjusted (subject to waiver by holders of a majority of the Class B ordinary
shares then in issue) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal,
in the aggregate, on an as-converted basis, 20% of the sum of our ordinary shares issued and outstanding upon the completion of our initial
public offering plus the number of Class A ordinary shares and equity-linked securities issued or deemed issued in connection with our
initial business combination (net of redemptions), excluding any Class A ordinary shares or equity-linked securities issued, or to be
issued, to any seller in our initial business combination and any private warrants issued to our sponsor, a partner or affiliate of our
sponsor, or any of our officers or directors. This is different than certain other blank check companies in which the initial shareholder
will only be issued an aggregate of 20% of the total number of shares to be outstanding prior to our initial business combination.
We may be a passive foreign investment company, or “PFIC,”
which could result in adverse United States federal income tax consequences to U.S. investors.
If we are a PFIC for any taxable year (or portion thereof) that is
included in the holding period of a U.S. Holder (as defined below) of our Class A ordinary shares or warrants, the U.S. Holder may be
subject to adverse U.S. federal income tax consequences and may be subject to additional reporting requirements. Our PFIC status for our
current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception. Depending on the particular circumstances,
the application of the start-up exception may be subject to uncertainty, and there cannot be any assurance that we will qualify for the
start-up exception. Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable year or any subsequent
taxable year. Our actual PFIC status for any taxable year, moreover, will not be determinable until after the end of such taxable year.
If we determine we are a PFIC for any taxable year (of which there can be no assurance), we will endeavor to provide to a U.S. Holder
such information as the Internal Revenue Service (“IRS”) may require, including a PFIC annual information statement, in order
to enable the U.S. Holder to make and maintain a “qualified electing fund” election, but there can be no assurance that we
will timely provide such required information, and such election would be unavailable with respect to our warrants in all cases. We urge
U.S. investors to consult their own tax advisors regarding the possible application of the PFIC rules. For a more detailed discussion
of the tax consequences of PFIC classification to U.S. Holders, see the section of our prospectus captioned “Income Tax Considerations
- United States Federal Income Taxation - U.S. Holders - Passive Foreign Investment Company Rules.”
The term “U.S. Holder” means a beneficial owner of units,
Class A ordinary shares or warrants who or that is for United States federal income tax purposes: (i) an individual citizen or resident
of the United States, (ii) a corporation (or other entity treated as a corporation for United States federal income tax purposes) that
is created or organized (or treated as created or organized) in or under the laws of the United States, any state thereof or the District
of Columbia, (iii) an estate the income of which is subject to United States federal income taxation regardless of its source or (iv)
a trust if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or
more U.S. persons have the authority to control all substantial decisions of the trust, or (B) it has in effect a valid election to be
treated as a U.S. person.
We may reincorporate in, migrate to or merge with and into another
entity as surviving company in, another jurisdiction in connection with our initial business combination and such reincorporation, migration
or merger may result in taxes imposed on shareholders.
We may, in connection with our initial business combination and subject
to requisite shareholder approval under the Companies Act, reincorporate in, migrate to or merge with and into another entity as surviving
company in, the jurisdiction in which the target company or business is located or in another jurisdiction. The transaction may require
a shareholder or warrant holder to recognize taxable income in the jurisdiction in which the shareholder or warrant holder is a tax resident
or in which its members are resident if it is a tax transparent entity. We do not intend to make any cash distributions to shareholders
or warrant holders to pay such taxes. Shareholders or warrant holders may be subject to withholding taxes or other taxes with respect
to their ownership of us after the reincorporation.
General Risk Factors
We are subject to changing law and regulations regarding regulatory
matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.
We are subject to rules and regulations by various governing bodies,
including, for example, the SEC, which is charged with the protection of investors and the oversight of companies whose securities are
publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing laws and
regulations have resulted in and are likely to continue to result in, increased general and administrative and support expenses and a
diversion of management time and attention from revenue-generating activities to compliance activities.
Moreover, because these laws, regulations and standards are subject
to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result
in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance
practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business
may be harmed.