Item 1. Business.
General
We are a blank check company formed 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 have not selected any specific business combination target and
we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination
target with respect to an initial business combination with us.
While we may pursue an acquisition opportunity in any industry or
sector, we intend to focus on businesses in the sports, media and data analytics sectors, with a focus on professional sports businesses,
which complement our management team’s expertise and will benefit from its strategic and hands-on operational leadership. We believe
that the experience and capabilities of our management team will make us an attractive partner to potential target businesses,
enhance our ability to complete a successful business combination and bring value to the business post-business combination. Our
management team represents a unique combination of operating, investing, financial and transactional experience. This group has
a strong track record of creating value for shareholders in multiple sports, media and data analytics companies that we have led,
managed and/or invested in.
Market Opportunity
We believe that sports and its related sub-sectors are among the
most attractive segments in the broader media entertainment ecosystem, with macro tailwinds, large addressable markets and the
ability for organic growth and consolidation. With sports constituting the backbone of highly rated live programming slates, sporting
events expected to continue to demand high attendance after COVID-19 restrictions are removed, fan and customer engagement growing
and evolving online and through social media and technological and data analytic advancements creating new investment and growth
opportunities, we believe that many companies within this ecosystem have characteristics that make them attractive targets. Technological
progression alone has created significant growth opportunities and continues to expand the already significant opportunity set
into new verticals, including legalized sports betting and gambling, wellness, virtual reality, over-the-top, or OTT, on-demand
content, digital health and safety, esports, video games, digital infrastructure, digital ticketing, data analytics and several
other attractive adjacencies. As ownership rules and dynamics within professional leagues continue to evolve, sports club ownership
with its differentiated attractive qualities is becoming a more accessible, distinctive opportunity. Additionally, the COVID-19
pandemic has caused a significant dislocation within the sports, media and entertainment industries, causing businesses with strong
fundamentals and the potential for significant long-term value appreciation before the pandemic to require liquidity and/or innovation
strategies, creating a compelling opportunity for us as we seek to acquire a potential business combination target.
Business Strategy
Our acquisition and value creation strategy is to identify, acquire
and build a company in the sports, media and data analytics sectors that complements the experience of our management team and
can benefit from its operational expertise. After our initial business combination, we envision our strategy may include additional
mergers and acquisitions with a focus on generating attractive risk-adjusted returns for our shareholders. We are leveraging our
management team’s network of potential proprietary and public transaction sources where we believe a combination of our relationships,
knowledge and experience in the sports, media and data analytics sectors could effect a positive transformation or augmentation
of existing businesses to improve their overall value.
The impact of the COVID-19 pandemic on U.S. and global professional
sports and entertainment industries has been profound. In-stadium revenue opportunities, such as ticket and premium seating sales,
concessions, merchandise and parking have been greatly reduced without the crowds of spectators traditionally featured in live
sporting events. As a result, sports clubs and vendors are facing reduced cash flow, leaving ownership groups without the appetite
or liquidity to continue funding operating losses for an indeterminate period of time. Organizations with inefficient operating
models are experiencing significantly more stress during these times, leading many groups to reevaluate their management relationships.
COVID-19 has also had a significant impact on businesses associated with or dependent on sports, for example groups holding media
rights, sports marketing groups and agencies and suppliers to the sports industry. We believe the totality of these circumstances
presents a unique opportunity to acquire special situation sports and media assets that would not otherwise be for sale and/or
to acquire these businesses at opportunistic prices. Due to the poor operating performance caused by Covid-19, the need for innovative
and dynamic operating models is evident. We believe that, with the current landscape, our management team will have the leverage
to identify and acquire assets with great potential at opportunistic price points. As more sports clubs and sports and media related
businesses understand the necessity of building global brands in order to compete for revenue and brand recognition across fan
bases, mature management teams, experiences and expertise will be required to enhance visibility and profitability. We believe
that our management team can provide all of these attributes to a potential target. Our management team has a demonstrated extensive
track record of successful value creation and enhancement (including complex turnarounds) with sports oriented and media assets
and also has access to proprietary opportunities globally that can be leveraged to drive value.
Over the course of their careers, the members of our management
team and their affiliates have developed a broad network of relationships in sports across leagues, team owners, commissioners,
athletes and industry executives that we believe will further complement our sourcing pipeline of acquisition opportunities. We
expect these networks will provide our management team with a robust flow of acquisition opportunities. In addition, we anticipate
that target business candidates will be brought to our attention from various unaffiliated sources, which may include investment
market participants, private equity groups, investment banking firms, consultants, accounting firms and large business enterprises.
Members of our management team communicate with their networks of relationships to articulate the parameters for our search for
a target company and a potential business combination and begin the process of pursuing and reviewing potentially interesting leads.
Acquisition Criteria
Consistent with our business strategy, we have identified the following
general criteria and guidelines that we believe are important in evaluating prospective target businesses. We intend to use these
criteria and guidelines in evaluating initial business combination opportunities, but we may decide to enter into our initial business
combination with a target business that does not meet any or all of these criteria and guidelines. Examples include:
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Sports businesses, including European
football clubs, with intrinsic brand value that could be enhanced by our management team through improvement of (a) on-field
performance through an analytics-based approach, and (b) business and revenue operations; |
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Businesses that would benefit from
our extensive networks and insights within the sector to drive new customer relationships and revenue growth; |
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Sports, media and data analytics businesses
where we can further monetize intellectual property and real assets; and |
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Businesses that would benefit from
an acquisition strategy and more efficient capital allocation. |
These criteria are not intended to be exhaustive.
Any evaluation relating to the merits of a particular initial business
combination may be based on these general guidelines as well as other considerations, factors and criteria that our management
may deem relevant. In the event that we decide to enter into a business combination with a target business that does not meet the
above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder communications
related to our initial business combination, which, as discussed in this prospectus, would be in the form of proxy solicitation
or tender offer materials, as applicable, that we would file with the SEC.
The past performance of our management team and the companies in
which our sponsor’s affiliates and partners have been involved is not a guarantee either (i) that we will be able to identify a
suitable candidate for our initial business combination or (ii) of success with respect to any business combination we may consummate.
Neither our management team nor sponsor nor any of their respective officers, directors, employees or affiliates, have had management
experience with special purpose acquisition corporations in the past. You should not rely on their respective historical records
or performance as indicative of our future performance. In addition, members of our management team may have conflicts of interest
with other entities to which they owe fiduciary or contractual obligations concerning initial business combination opportunities.
Initial Public Offering and Concurrent Private
Placement
On February 11, 2022, we consummated our
initial public offering of 8,625,000 units (the “Units”), including the issuance of 1,125,000 Units as a result of the
underwriters’ exercise of their over-allotment option in full. Each Unit consists of one Class A ordinary share of the Company,
par value $0.0001 per share (the “Class A Ordinary Shares”), and one-half of one redeemable warrant of the Company (each
whole warrant, a “Warrant”), with each Warrant entitling the holder thereof to purchase one Class A Ordinary Share for
$11.50 per share, subject to adjustment. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company
of $86,250,000.
Simultaneously with the closing of our
initial public offering, we completed the private sale of an aggregate of 471,875 private units, including 39,375 private units
issued in connection with the exercise in full of the underwriters’ over-allotment option (the “Private Units”), to our
sponsor and the underwriters at a purchase price of $10.00 per Private Unit, generating gross proceeds to us of $4,718,750. A total
of 436,416 Private Units were purchased by our sponsor and a total of 35,459 Private Units were purchased by the underwriters.
Following the respective closings, of the net proceeds we received
from our initial public offering and from the sale of the Private Units, $87,543,750 was deposited into a segregated account maintained
by Continental Stock Transfer & Trust Company, acting as trustee.
Our units began trading on February 9, 2022 on the Nasdaq Global
Market, or Nasdaq, under the symbol “CPAQU.” When the securities comprising the units begin separate trading, the ordinary
shares and warrants will trade on the Nasdaq under the symbols “CPAQ” and “CPAQW,” respectively.
Competitive Strength
Status as a Public Company
We believe that our structure will make 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 $73,500,000
assuming no redemptions and after payment of deferred underwriting commissions of an aggregate of $2,625,000 to BTIG and EarlyBirdCapital
in connection with the business combination (or $84,525,000 assuming no redemptions and after payment of up to an aggregate of
$3,018,750 in deferred underwriting commissions to BTIG and EarlyBirdCapital in connection with the business combination if the
underwriters’ over-allotment option is exercised in full), in each case before 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, since we have no specific business combination under consideration,
we have not taken any steps to secure third party financing 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 for an indefinite period of time following our initial public offering. We intend to utilize cash
derived from the net proceeds of our initial public offering and a portion of the private placement of private units, in effecting
a business combination which has not yet been identified. Accordingly, investors in our initial public offering have invested without
first having an opportunity 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.
We Have Not Identified a Target Business
To date, our sponsor, officers, directors, promoters and other affiliates
has engaged in any substantive discussions on our behalf with representatives of other companies regarding the possibility of a
potential merger, capital stock or share exchange, asset acquisition or other similar business combination with us. We have not
engaged or retained any agent or other representative to identify or locate such companies. As a result, we cannot assure you that
we will be able to locate a target business or that we will be able to engage in a business combination with a target business
on favorable terms or at all.
Subject to our management team’s pre-existing fiduciary obligations
and the fair market value requirement described below, we will 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
While we have not yet selected a target business with which to consummate
our initial business combination, we believe based on our management’s business knowledge and past experience that there are numerous
potential candidates. We expect that our principal means of identifying potential target businesses will be through 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, our officers and
directors believe that the relationships they have developed over their careers and their access to our sponsor’s members’ and
affiliates’ contacts and resources will generate a number of potential business combination opportunities that will warrant further
investigation. We also anticipate that target business candidates will be 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 may be brought to our attention by such unaffiliated sources as a result
of being solicited by us through calls or mailings. These sources may also introduce us to target businesses they think we may
be interested in on an unsolicited basis, since many of these sources will have read this Annual Report 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) at the time of the agreement to enter into the initial business combination, subject to
any pre-existing fiduciary or contractual obligations. While we do not presently anticipate engaging the services of professional
firms or other individuals that specialize in business acquisitions on any formal basis (other than BTIG and EarlyBirdCapital as
described elsewhere in this Annual Report), we may engage these firms or other individuals in the future, 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 administrative
services fee, the repayment of the $150,000 loan and reimbursement of any out-of-pocket expenses. Our audit committee will review
and approve 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 earned on the trust account) 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 will have 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 “Investment Criteria”.
Any evaluation relating to the merits of a particular business combination
will be 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 will conduct an
extensive due diligence review which will encompass, 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 will be 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 any degree of 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 will result in a loss to us and reduce 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) 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
100% of the equity interests or assets of 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.
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 may seek to effect a business combination with more than one
target business, although we expect to complete our business combination with just one business. Therefore, at least initially,
the prospects for our success may 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:
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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 |
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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. |
If we determine to simultaneously acquire several businesses and
such businesses are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business
is contingent on the simultaneous closings of the other acquisitions, which may make it more difficult for us, and delay our ability,
to complete the business combination. With multiple acquisitions, we could also face additional risks, including additional burdens
and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the
additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies
in a single operating business.
Limited Ability to Evaluate the Target Business’ Management
Although we intend to 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 don’t 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 may also choose to pursue an extension of
the time to complete our business combination without depositing additional funds into the trust account, which, consistent with
a traditional special purpose acquisition company structure, would require a vote of the company’s shareholders and in connection
with which shareholders would have the right to redeem their public shares.
We chose our net tangible asset threshold of $5,000,001 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 with a target business that imposes any type of working capital closing condition or
requires us to have a minimum amount of funds available from the trust account upon consummation of such initial business combination,
we may need to have more than $5,000,001 in net tangible assets either immediately prior to or upon consummation and this 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 may therefore have to wait until the completion window in order to be able to receive
a pro rata share of the trust account. Our sponsor, initial shareholders, officers and directors will agree (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 to 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 has indicated any intention to purchase units or Class A ordinary shares in our initial public offering or from
persons in the open market or in private transactions. However, if we hold a meeting to approve a proposed business combination
and a significant number of shareholders vote, or indicate an intention to vote, against such proposed business combination or
that they wish to have their shares redeemed, our officers, directors, sponsor, initial shareholders 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, initial shareholders 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.
Conversion Rights
At any general meeting called to approve an initial business combination,
public 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 as of two business
days prior to the consummation of the initial business combination, less any taxes then due but not yet paid. Alternatively, 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 conversion 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 our initial public offering or in the aftermarket. Additionally, the holders
of the underwriter founder shares will not have conversion rights with respect to the underwriter founder shares.
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 business combination. 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 conversion rights. The need to deliver shares is a requirement of exercising
conversion rights regardless of the timing of when such delivery must be effectuated. However, in the event we require shareholders
seeking to exercise conversion rights prior to the consummation of the proposed business combination and the proposed business
combination is not consummated this may result in an increased cost to shareholders.
Any proxy solicitation materials we furnish to shareholders in connection
with a vote 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 business combination to deliver his, her or
its shares if he, she or it wishes to seek to exercise his conversion 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 convert such 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 conversion 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 initial business combination is not approved or completed
for any reason, then our public shareholders who elected to exercise their conversion rights would not be entitled to convert 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 the completion window.
Redemption of Public Shares and Liquidation if No Initial
Business Combination
Our sponsor, officers and directors will agree that we will have
only the completion window to complete our initial business combination. If we are unable to complete our initial business combination
within the completion window, 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 completion window. Our initial shareholders will enter into
a letter agreement with us, pursuant to which they will 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 the completion window. 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 completion window.
Our sponsor, officers and directors will agree, 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 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 amounts remaining out of the proceeds held outside
the trust account, although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds
are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there
is any interest accrued in the trust account not required to pay taxes, we may request the trustee to release to us an additional
amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of the net proceeds of our initial public
offering and the sale of the private units, 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
is anticipated to be approximately $10.15. 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 $10.15. While we intend to pay such
amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have all vendors, service providers (other
than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with
us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our
public shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that
they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach
of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case
in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any
third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform
an analysis of the alternatives available to it and will enter into an agreement with a third party that has not executed a waiver
only if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party
consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants
that would agree to execute a waiver or in cases where we are unable to find a service provider willing to execute a waiver. In
addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or
arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any
reason. Upon redemption of our public shares, if we are unable to complete our initial business combination within the completion
window, 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) $10.15 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 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 will be limited to searching for prospective target businesses to acquire, the only third parties we currently expect
to engage would be 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) $10.15 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
$10.15 per share.
We will seek to reduce the possibility that our sponsor will have
to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (other than our
independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving
any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable
as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including
liabilities under the Securities Act. We have access to the proceeds of our initial public offering and the sale of the private
units, 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.
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 $10.15 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 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,
(2) the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated
memorandum and articles of association (A) 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 and (3) the redemption of our public shares if we are unable to complete our
initial business combination within the completion window, 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 the event we seek shareholder
approval in connection with our initial business combination, a shareholder’s voting in connection with 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
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Our amended and restated memorandum and articles of association contain
certain requirements and restrictions relating to our initial public offering that will 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) in a manner 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 the completion window
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; |
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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; |
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if our initial business combination
is not consummated within the completion window, then our existence will terminate and we will distribute all amounts in the
trust account; and |
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prior to our initial business combination,
we may not issue additional 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
the completion window or (y) amend the foregoing provisions. |
These provisions cannot be amended without the approval of holders of at
least two-thirds of our 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
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.
Competition
We face intense competition from other entities having a business
objective similar to ours, including private investors (either 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. While we believe there are numerous target businesses we could potentially acquire with
the net proceeds of 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 will be limited by our available financial resources. This inherent competitive
limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, in the event we seek
shareholder approval of our initial business combination and we are obligated to pay cash for our Class A ordinary shares, it will
potentially reduce the resources available to us for our initial business combination. Any of these obligations may place us at
a competitive disadvantage in successfully negotiating a business combination. We furthermore face competition from other newly-formed
entities that may target a business combination transaction with similar focus areas as ours, which 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 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) $10.15 per public
share or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account
due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except
as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as
to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities
under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our
sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified
whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities
of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve
for such obligations.
Facilities
We currently maintain our executive offices at 981 Marcus
Avenue, Suite 227, Lake Success, NY 11042. Our executive offices are provided to us by our sponsor at a minimal payment per month
(included in the fee of up to $10,000 per month that we pay to our sponsor for office space, administrative and support services).
We consider our current office space adequate for our current operations.
Employees
As of the date of this Annual Report, we have 2 officers. Members
of our management team are not obligated to devote any specific number of hours to our matters but they 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 will vary based on whether a target business has
been selected for our initial business combination and the current stage of the business combination process.
Periodic Reporting and Financial Information
We have registered our units, Class A ordinary shares and warrants
under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports
with the SEC. In accordance with the requirements of the Exchange Act, our annual reports contain financial statements audited
and reported on by our independent registered public accountants.
We will provide shareholders with audited financial statements of
the prospective target business as part of the tender offer materials or proxy solicitation materials sent to shareholders to assist
them in assessing the target business. These financial statements will 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 completion window. While this may
limit the pool of potential business combination candidates, we do not believe that this limitation will be material.
We will be required to evaluate our internal control procedures
for the fiscal year ending December 31, 2022 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be
a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to
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 their internal controls. The development of the internal controls of any such entity to achieve compliance
with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
We 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 intend to take advantage of
the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1)
the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial public offering, (b) in which
we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which
means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the end of 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 audited financial statements. We will remain a smaller reporting company
until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds $250
million as of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during such completed
fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the end of that year’s
second fiscal quarter.
Item 1A. Risk Factors.
Summary of Risk Factors
An investment in our securities involves a high degree of risk.
We have provided the following summary of the material risks involved:
Risks Related to our Search for, and Consummation of, Business
Combination Transaction
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Our public shareholders may not
be afforded an opportunity to vote on our proposed business combination. |
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Your only opportunity to affect the
investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your
shares from us for cash. |
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If a large number of our shares request
to be redeemed for cash in a proposed business combination, that 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. |
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The completion window for our business
combination may give potential target businesses leverage over us in negotiating a business combination. |
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As the number of special purpose acquisition
companies evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive
targets. |
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If we do not complete our initial business
combination within the completion window, our public shareholders may receive only $10.15 per share, or less in certain circumstances,
and our warrants will expire worthless. |
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We may only be able to complete one
business combination with the proceeds of our initial public offering and the sale of the private units, which will cause
us to be solely dependent on a single business. |
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We may seek to amend our amended and
restated memorandum and articles of association or governing instruments, in a manner that will make it easier for us
to complete our initial business combination that some of our shareholders may not support. |
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Because our sponsor, officers and directors
can purchase additional shares in anticipation of the vote on our initial business combination transaction, they may disproportionately
influence the outcome. |
Risks
Relating to the Post-Business Combination Company
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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. |
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We may have limited ability to assess the management of a prospective
target business. |
Risks
Relating to our Management Team
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We are totally dependent upon the efforts
of our key personnel, some of whom may join us following our initial business combination. |
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We may seek acquisition opportunities
in industries or sectors that may be outside of our management’s areas of expertise. |
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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. |
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Our officers and directors allocate
their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote
to our affairs. |
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Since our initial shareholders will
lose their entire investment in us if our initial business combination is not completed, a conflict of interest may arise
in determining whether a particular business combination target is appropriate. |
Risks
Relating to our Securities
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You will not have any rights or interests in funds from the trust
account, except under certain limited circumstances. |
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We may redeem your unexpired warrants
prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless. |
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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. |
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An investment in our company may result
in uncertain or adverse U.S. federal income tax consequences. |
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If we are unable to consummate our
initial business combination within the completion window, our public shareholders may be forced to wait beyond the completion
window before redemption from our trust account. |
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If a shareholder fails to receive notice
of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the
procedures for tendering its shares, such shares may not be redeemed. |
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We may issue additional Class A ordinary
shares or preferred shares to complete our initial business combination or under an employee incentive plan after completion
of our initial business combination, thereby diluting you. |
General
Risk Factors
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We are a newly incorporated company
with very limited operating history and no revenues, and you have little basis on which to evaluate our ability to achieve
our business objective. |
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 securities. If any of the following events occur, 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
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.
Our public shareholders
will not be entitled to vote or redeem their shares in connection with any extension of our time to consummate our initial business
combination.
If we anticipate that we may
not be able to consummate our initial business combination within 12 months from the closing of our initial public offering, we
may, but are not obligated to, extend the period of time to consummate a business combination two times by an additional three
months each time (for a total of up to 18 months to complete a business combination); so long as our sponsor and/or its affiliates
or designees deposit into the trust account: (i) with respect to a single Funded Extension Period, an Extension Payment (as defined
in this Annual Report), and (ii) with respect to two consecutive Funded Extension Periods, an Extension Payment prior to each Funded
Extension Period, or $0.20 per share in the aggregate (for an aggregate of $1,725,000), upon five days advance notice prior to
the applicable deadline pursuant to the terms of our amended and restated memorandum and articles of association and the trust
agreement to be entered into between us and Continental Stock Transfer & Trust Company. Our public shareholders will not be
entitled to vote or redeem their shares in connection with any such extension. As a result, we may affect such an extension even
if a majority of our public shareholders do not support such an extension and none of our public shareholders will be able to redeem
their shares in connection with such an extension. This feature is different than the traditional special purpose acquisition company
structure, in which any extension of the company’s period to complete a business combination would require a vote of the company’s
shareholders, with such shareholders having the right to redeem their public shares in connection with such vote. We may also choose
to pursue an extension of the time to complete our business combination without depositing additional funds into the trust account,
which, consistent with a traditional special purpose acquisition company structure, would require a vote of the company’s shareholders
and in connection with which shareholders would have the right to redeem their public shares.
If we seek shareholder
approval of our initial business combination, our initial shareholders, directors and officers have agreed to vote in favor of
such initial business combination, regardless of how our public shareholders vote.
Our sponsor has
agreed, pursuant to the terms of a letter agreement entered into with us, to vote its founder shares and any public shares held by them
in favor of our initial business combination. We expect that our sponsor will own at least 2,156,250, or 20.00% of our issued and outstanding
shares at the time of any such shareholder vote. As a result, in addition to our sponsor’s founder shares, we would need approximately
3,183,487, or 36.91% (assuming all issued and outstanding shares are voted, our sponsor does not purchase any shares in or after our initial
public offering), of the 8,625,000 public shares sold in our initial public offering to be voted in favor of an initial business combination
in order to have such initial business combination approved (unless a greater vote is required by applicable law or stock exchange rules).
Accordingly, if we seek shareholder approval of our initial business combination, it is more likely that the necessary shareholder approval
will be received than would be the case if our sponsor agreed to vote its founder shares in accordance with the majority of the votes
cast by our public shareholders.
Your only opportunity to affect the investment decision regarding
a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we
seek shareholder approval of 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.
The ability of our public shareholders to redeem their shares
for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for
us to enter into a business combination with a target.
We may seek to enter into a business combination transaction agreement
with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If
too many public shareholders exercise their redemption rights, we would not be able to meet that closing condition and, as a result,
would not be able to proceed with the business combination. Furthermore, in no event will we redeem our public shares in an amount
that would cause our net tangible assets to be less than $5,000,001 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. Prospective
targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.
The ability of our public shareholders to exercise redemption
rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize
our capital structure.
At the time we enter into an agreement for our initial business
combination, we will not know how many shareholders may exercise their redemption rights, and 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. Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness
at higher than desirable levels. The above considerations may limit our ability to complete the most desirable business combination
available to us or optimize our capital structure.
The ability of our public shareholders to exercise redemption
rights with respect to a large number of our shares could increase the probability that our initial business combination would
be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination agreement requires us to use
a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing,
the probability that our initial business combination would be unsuccessful increases. If our initial business combination is unsuccessful,
you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate
liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to
the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose
the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your shares in the open
market.
Because we are offering
our units to the public at a price per unit of $10.00 in our initial public offering, and our trust account will initially contain
$10.15 per Class A ordinary share, public shareholders may be incentivized to redeem their public shares at the time of our initial
business combination.
We are offering our units to
the public at a price per unit of $10.00 in our initial public offering, and our trust account will initially contain $10.15 per
Class A ordinary share. This is different than some other similarly structured blank check companies for which the trust account
will only contain $10.00 per share. As a result of the additional funds that could be available to public shareholders upon redemption
of Class A ordinary shares, our public shareholders may be more incentivized to redeem their public shares and not to hold their
shares through our initial business combination. A higher percentage of redemptions by our public shareholders could make it more
difficult for us to complete our initial business combination.
The requirement that we complete our initial business combination
within the completion window may give potential target businesses leverage over us in negotiating a business combination and may
limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach
our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce
value for our shareholders.
Any potential target business with which we enter into negotiations
concerning a business combination will be aware that we must complete our initial business combination within the completion window.
Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not
complete our initial business combination with that particular target business, we may be unable to complete our initial business
combination with any target business. This risk will increase as we get closer to the completion window. Depending upon when we
identify a potential target business, we may have limited time to conduct due diligence and may enter into our initial business
combination on terms that we would have rejected upon a more comprehensive investigation.
As the number of special purpose acquisition companies evaluating
targets increases, attractive targets may become scarcer and there may be more competition for attractive targets. This could increase
the cost of our initial business combination and could even result in our inability to find a target or to consummate an initial
business combination.
In recent years and in particular during the last year, the number
of special purpose acquisition companies that have been formed has 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 well as many such companies currently in registration.
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 may increase, which could cause targets companies to demand improved financial terms.
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 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 $10.15 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.
Our search for a business combination, and any target business
with which we ultimately consummate a business combination, may be materially adversely affected by the coronavirus (COVID-19)
pandemic.
The coronavirus (COVID-19) pandemic has adversely affected the economies
and financial markets worldwide, and the business of any potential target business with which we consummate a business combination
could be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns
relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target company’s
personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent
to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain
and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to
contain COVID-19 or treat its impact, among others. The effects of the COVID-19 pandemic on businesses, and the inability
to predict the future impact of the pandemic on businesses, has also made determinations and negotiations of valuation more difficult,
which could make it more difficult to consummate a business combination transaction. If the disruptions posed by COVID-19 or
other matters of global concern continue for a further extensive period of time, our ability to consummate a business combination,
or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely
affected.
We may not be able to complete our initial business combination
within the completion window, 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 $10.15 per share, or less than such amount
in certain circumstances, and our warrants will expire worthless.
Our sponsor, officers and directors will agree that we must complete
our initial business combination within the completion window. We may not be able to find a suitable target business and complete
our initial business combination within such time period. Our ability to complete our initial business combination may be negatively
impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein.
If we are unable to complete our initial business combination within
the completion window, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible
but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and
which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption
will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions,
if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders
and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide
for claims of creditors and the requirements of other applicable law. In such case, our public shareholders may receive only $10.15
per share, or less than $10.15 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 $10.15 per share” and other risk factors herein.
If we seek shareholder approval of our initial business combination,
our sponsor, directors, officers, advisors or any of their affiliates may elect to purchase shares or warrants from public shareholders,
which may influence a vote on a proposed business combination and reduce the public “float” of our securities.
If we seek shareholder approval of our initial business
combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules,
our 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 that 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.
The securities in which we invest the funds held in the trust
account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share
redemption amount received by public shareholders may be less than $10.15 per share.
The proceeds held in the trust account will be invested only in
U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under
Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S.
government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates
in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee
of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States.
In the event that we are unable to complete our initial business combination or make certain amendments to our amended and restated
certificate of incorporation, our public shareholders are entitled to receive their pro-rata share of the proceeds held in
the trust account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial
business combination, up to $100,000 of interest). Negative interest rates could reduce the value of the assets held in trust such
that the per-share redemption amount received by public shareholders may be less than $10.15 per share.
If, after we distribute
the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition
is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of
directors may be viewed as having breached their fiduciary duties, thereby exposing the members of our board of directors and us
to claims seeking damages, including potential punitive damages.
If, after we distribute the
proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is
filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor
and/or bankruptcy laws as either a “preferential transfer,” a “fraudulent conveyance” or a “voidable transfer.”
As a result, a bankruptcy court could seek to recover some or all amounts received by our shareholders. In addition, our board
of directors may be viewed as having breached its fiduciary duty and/or having acted in bad faith by paying public shareholders
from the trust account prior to addressing the claims of creditors, thereby exposing itself and us to claims seeking damages, including
potential punitive damages.
If, before distributing
the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition
is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our
shareholders and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may
be reduced.
If, before distributing the
proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is
filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, 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 claims deplete the trust account, the per-share amount that would otherwise be received by our public
shareholders in connection with our liquidation would be reduced.
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 units 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 will have net tangible assets in excess of $5,000,000 upon the successful completion of our initial public offering and the sale of
the private units, we have filed a Current Report on Form 8-K that attached 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 will not be
afforded the benefits or protections of those rules. Among other things, this means our units will be immediately tradable and we will
have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if 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). As the number of 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 of our limited resources and the significant competition
for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are
unable to complete our initial business combination, our public shareholders may receive only approximately $10.15 per share, or
less in certain circumstances, on our redemption of their shares, and our warrants will expire worthless.
We face intense competition from other entities having a business
objective similar to ours, including private investors (whether individuals or investment firms), 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. While we believe there are numerous target businesses we could potentially acquire with
the net proceeds of our initial public offering and the sale of the private units, our ability to compete with respect to the acquisition
of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation
gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, if we are obligated to pay cash
for the Class A ordinary shares redeemed and, in the event we seek shareholder approval of our initial business combination, we
make purchases of our Class A ordinary shares, it will potentially reduce the resources available to us for our initial business
combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination.
If we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.15 per
share (or less in certain circumstances) on the liquidation of our trust account and our warrants will expire worthless. In certain
circumstances, our public shareholders may receive less than $10.15 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 $10.15 per share” and other risk factors herein.
If the net proceeds of our initial public offering not being
held in the trust account are insufficient to allow us to operate for at least through the completion window, that could limit
the amount available to fund our search for a target business or businesses and complete our initial business combination, and
we will depend on loans from our sponsor or management team to fund those activities.
We believe that, upon the closing of our initial public offering,
the funds available to us outside of the trust account, will be sufficient to allow us to operate through the completion window;
however, we cannot assure you that our estimate is accurate. Of the net proceeds of our initial public offering and the sale of
the private units, only approximately $750,000 was available to us initially outside the trust account to fund our working capital
requirements.
We expect to incur significant costs in pursuit of our acquisition
plans. Management’s plans to address this need for capital through our initial public offering and potential loans from certain
of our affiliates are discussed in the section of this Annual Report titled “Management’s Discussion and Analysis of Financial
Condition and Results of Operations.” However, our affiliates are not obligated to make loans to us in the future, and we
may not be able to raise additional financing from unaffiliated parties necessary to fund our expenses. Any such event in the future
may negatively impact the analysis regarding our ability to continue as a going concern and our ability to consummate our initial
business combination transaction.
Of the funds available to us, we could use a portion of the
funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion
of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target
businesses from “shopping” around for transactions with other companies on terms more favorable to such target businesses)
with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered
into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required
to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching
for, or conduct due diligence with respect to, a target business. If we are unable to complete our initial business combination,
our public shareholders may receive only approximately $10.15 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 $10.15 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 $10.15 per share” and other risk factors
herein.
If we are required to seek additional capital, we would need
to borrow funds from our sponsor, management team or other third parties to operate or may be forced to liquidate. Neither our
sponsor, members of our management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances.
Any such advances would be repaid only from funds held outside the trust account or from funds released to us upon completion of
our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient
funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public shareholders
may only receive approximately $10.15 per share (or less in certain circumstances) on our redemption of our public shares, and
our warrants will expire worthless. In such case, our public shareholders may only receive $10.15 per share, and our warrants will
expire worthless. In certain circumstances, our public shareholders may receive less than $10.15 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 $10.15 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 $10.15 per
share.
Our placing of funds in the trust account may not protect those
funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent
auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right,
title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders,
such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims
against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar
claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to
a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving
such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it
and will 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 $10.15 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) $10.15 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 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 $10.15 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.
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) $10.15 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 $10.15 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, our activities may be restricted, including:
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restrictions on the nature of our investments; and |
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restrictions on the issuance of securities; |
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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:
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registration as an investment company; |
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adoption of a specific form of corporate structure; and |
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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 $10.15 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will
expire worthless.
Changes in laws or regulations, or a failure to comply with
any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business
combination, and results of operations.
We are subject to laws and regulations enacted by national, regional
and local governments. In particular, we will be 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.
We may not hold an annual general meeting until after the
completion of our initial business combination. Our public shareholders will not have the right to appoint directors prior to the
consummation of our Business Combination and will not have the right to call a general meeting.
In accordance with the Nasdaq corporate governance requirements,
we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on the Nasdaq.
There is no requirement under the Companies Act for us to hold annual or extraordinary general meetings to appoint directors. Until
we hold an annual general meeting, public shareholders may not be afforded the opportunity to discuss company affairs with management.
As holders of our Class A ordinary shares, our public shareholders also will not have the right to vote on the appointment of directors
prior to completion of our initial business combination. In addition, during that time period, holders of a majority of our founders
shares may remove a member of the board of directors for any reason. Under our amended and restated articles of association, our
shareholders will furthermore not have the right to call a general meeting.
Because we are not limited to a particular industry or any
specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or
risks of any particular target business’s operations at the time of our initial public offering, and there may be additional risks
associated with the target business we select for our initial business combination.
While we are focused upon a combination with businesses in the sports,
media and data analytics sectors, with a focus on professional sports businesses, which complement our management team’s expertise
and will benefit from its strategic and hands-on operational leadership, we nevertheless may pursue acquisition opportunities in
any one of numerous industries or geographic locations. We will not, however, under our amended and restated memorandum and articles
of association, be permitted to effectuate our business combination with another blank check company or similar company with nominal
operations. Because we have not yet identified or approached any specific target business with respect to a business combination,
there is no basis at the time of our initial public offering to evaluate the possible merits or risks of any particular target
business’s operations, results of operations, cash flows, liquidity, financial condition or prospects.
To the extent we complete our 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 securities 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 not
to redeem their shares and 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 $10.15 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 engage one or
more of our underwriters or one of their respective affiliates to provide additional services to us after our initial public offering,
which may include acting as financial advisor in connection with an initial business combination or as placement agent in connection
with a related financing transaction. Our underwriters are entitled to receive deferred commissions that will released from the
trust account only upon completion of an initial business combination. These financial incentives may cause them to have potential
conflicts of interest in rendering any such additional services to us after our initial public offering, including, for example,
in connection with the sourcing and consummation of an initial business combination.
We may engage one or more of
our underwriters or one of their respective affiliates to provide additional services to us after our initial public offering,
including, for example, identifying potential business combination targets, providing financial advisory services, acting as a
placement agent in a private equity offering or arranging debt financing. We may pay such underwriter or its affiliate fair and
reasonable fees or other compensation that would be determined at that time in an arm’s length negotiation; provided that no agreement
will be entered into with any of the underwriters or their respective affiliates and no fees or other compensation for such services
will be paid to any of the underwriters or their respective affiliates prior to the date that is 60 days from the date of
our prospectus, unless such payment would not be deemed underwriters’ compensation in connection with our initial public offering.
The underwriters are also entitled to receive deferred commissions that are conditioned on the completion of an initial business
combination. The fact that the underwriters’ or their respective affiliates’ financial interests tied to the consummation of a
business combination transaction may give rise to potential conflicts of interest in providing any such additional services to
us, including potential conflicts of interest in connection with the sourcing and consummation of an initial business combination.
We may issue notes or other debt securities, or otherwise
incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and
thus negatively impact the value of our shareholders’ investment in us.
Although we have no commitments as of the date of this Annual Report
to issue any notes or other debt securities, or to otherwise incur outstanding debt following our initial public offering, we may
choose to incur substantial debt to complete our initial business combination. We will agree that we will not incur any indebtedness
unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in
the trust account. As such, no issuance of debt will affect the per-share amount available for redemption from the trust account.
Nevertheless, the incurrence of debt could have a variety of negative effects, including:
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default and foreclosure on our assets
if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
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acceleration of our obligations to
repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require
the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
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our immediate payment of all principal and accrued interest, if
any, if the debt security is payable on demand; |
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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; |
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our inability to pay dividends on our Class A ordinary shares; |
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using a substantial portion of our
cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary
shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
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limitations on our flexibility in planning for and reacting to
changes in our business and in the industry in which we operate; |
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increased vulnerability to adverse
changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
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limitations on our ability to borrow
additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy
and other purposes and other disadvantages compared to our competitors who have less debt. |
We may only be able to complete one business combination with
the proceeds of our initial public offering and the sale of the private units, which will cause us to be solely dependent on a
single business which may have a limited number of products or services. This lack of diversification may negatively impact our
operations and profitability.
Of the net proceeds from our initial public offering and the sale
of the private units, $88,293,750 (assuming amounts not held in trust for use as working capital and assuming no redemption of
Class A ordinary shares) will be available to complete our business combination and pay related fees and expenses (which fees will
include up to approximately $3,018,750, for the payment of a fee to BTIG and EarlyBirdCapital for deferred underwriting commissions
payable only upon completion of our initial 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:
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solely dependent upon the performance of a single business, property
or asset; or |
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dependent upon the development or market
acceptance of a single or limited number of products, processes or services. |
This lack of diversification may subject us to numerous economic,
competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which
we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business combinations
with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased
costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several businesses that
are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent
on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability,
to complete our initial business combination. With multiple business combinations, we could also face additional risks, including
additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple
sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the
acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact
our profitability and results of operations.
We may 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 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 if 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 or any of their affiliates.
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. We cannot
assure you that we will not seek to amend our amended and restated memorandum and articles of association or governing instruments,
in a manner that will make it easier for us to complete our initial business combination that some of our shareholders may
not support.
In order to effectuate an initial business combination,
blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments. For example,
blank check companies have amended the definition of business combination, increased redemption thresholds and extended the time to consummate
an initial business combination. Amending our amended and restated memorandum and articles of association will require 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 at least 90% of our ordinary shares voting in a general meeting), or by a unanimous
written resolution of all of our shareholders. We cannot assure you that we will not seek to amend our amended and restated memorandum
and articles of association or governing instruments or extend the time to consummate an initial business combination in order to effectuate
our initial business combination.
The provisions of our amended and restated memorandum and
articles of association that relate to our pre-business combination activity (and corresponding provisions of the agreement governing
the release of funds from our trust account) may be amended with the approval of holders of at least 65% of our ordinary shares
who attend and vote at a general meeting, which is a lower amendment threshold than that of some other blank check companies. It
may be easier for us, therefore, to amend our amended and restated memorandum and articles of association and the trust agreement
to facilitate the completion of an initial business combination that some of our shareholders may not support.
Some other blank check companies have a provision in their charter which
prohibits the amendment of certain of its provisions, including those which relate to a company’s pre-business combination activity,
without approval by holders of a certain percentage of the company’s shares. In those companies, amendment of these provisions typically
requires approval by holders holding between 90% and 100% of the company’s public shares. Our amended and restated memorandum and
articles of association provide that any of its provisions, including those related to pre-business combination activity (including the
requirement to deposit the net proceeds of our initial public offering and a portion of 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 attend and vote in a general meeting, and corresponding provisions of the trust agreement governing the release
of funds from our trust account may be amended if approved by holders of 65% of our ordinary shares (other than amendments relating to
the appointment or removal of directors prior to our initial business combination, which require the approval of at least 90% of our ordinary
shares voting in a general meeting). Our initial shareholders, who will collectively beneficially own 20% of our ordinary shares upon
the closing of our initial public offering (excluding the underwriter founder shares and the private shares, and assuming they do not
purchase any units in our initial public offering), may participate in any vote to amend our amended and restated memorandum and articles
of association and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend
the provisions of our amended and restated memorandum and articles of association which govern our pre-business combination behavior more
easily than some other blank check companies, and this may increase our ability to complete our initial business combination with which
you do not agree. However, our amended and restated memorandum and articles of association prohibit any amendment of its 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 our Annual
Report if we do not complete our initial business combination within the completion window 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 will agree, 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 will be 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, the letter agreement among us and our sponsor, officers, directors (including director nominees), the registration rights
agreement among 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 contains 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) deferred underwriting commission and (ii) taxes payable
on the income earned on the trust account) so long as we obtain and 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.
We may be unable to obtain additional financing to complete
our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure
or abandon a particular business combination.
Although we believe that the net proceeds of our initial public
offering and the sale of the private units will be sufficient to allow us to complete our initial business combination, because
we have not yet identified any prospective target business we cannot ascertain the capital requirements for any particular transaction.
If the net proceeds of our initial public offering and the sale of the private units prove to be insufficient, either because of
the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation
to redeem for cash a significant number of shares from shareholders who elect redemption in connection with our initial business
combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we
may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you that such financing
will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed
to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular
business combination and seek an alternative target business candidate. In addition, even if we do not need additional financing
to complete our initial business combination, we may require such financing to fund the operations or growth of the target business.
The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target
business. None of our 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 $10.15 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 $10.15 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 $10.15 per share” and other risk factors below.
Because our sponsor, officers and directors can purchase additional
shares in anticipation of the vote on our initial business combination transaction, they may disproportionately influence the outcome
of that vote in a manner that benefits themselves but is averse to the interests of our public shareholders.
If we seek shareholder approval of our initial business
combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules,
our sponsor, directors, officers, or their respective affiliates may purchase shares in privately negotiated transactions or in the open
market either prior to or following the completion of our initial business combination. There is no limit as to the number of shares such
persons may purchase, or any restriction on the price that they may pay.
These persons have no current commitments, plans or intentions to
engage in such transactions and have not formulated any terms or conditions for any such transactions. However, in the event our
sponsor, directors, officers, or their respective affiliates determine to make any such purchases at the time of a shareholder
vote relating to our initial business combination, such purchases could have the effect of influencing the vote necessary to approve
such transaction, which may not be beneficial for our public shareholders.
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 completion window.
We are an emerging growth company and a smaller reporting company
within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available
to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and may
make it more difficult to compare our performance with other public companies.
We are an “emerging growth company” within the meaning
of the Securities Act, as modified by the JOBS Act, and we may 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 may not have access to certain information they may deem important. We could be an emerging growth company
for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our ordinary
shares held by non-affiliates exceeds $700 million as of the end of any second quarter of a fiscal year, in which case we would
no longer be an emerging growth company as of the end of such fiscal year. We cannot predict whether investors will find our securities
less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of
our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be
a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth
companies from being required to comply with new or revised financial accounting standards until private companies (that is, those
that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under
the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies
but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means
that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging
growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may
make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging
growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences
in accounting standards used.
Additionally, we are a “smaller reporting company” as
defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations,
including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company
until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds $250
million as of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during such completed
fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the end of that year’s
second fiscal quarter. To the extent 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 our Annual Report on Form 10-K for the year ending December 31,
2022. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging
growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on
our internal control over financial reporting. 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.
Resources and time 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 within the completion window. If we are unable to complete our initial business combination, our public shareholders may
receive only approximately $10.15 per share, or less than such amount in certain circumstances, on the liquidation of our trust
account and our warrants will expire worthless.
We anticipate that the investigation of each specific target business
and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial
management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a specific
initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable.
Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination
for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred
which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable
to complete our initial business combination, our public shareholders may receive only approximately $10.15 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 $10.15
per share” and other risk factors.
The nominal purchase price paid by our sponsor
for the founders shares may result in significant dilution to the implied value of your public shares upon the consummation of our initial
business combination.
We offered our units at an offering price of $10.00
per unit and the amount deposited in our trust account is initially anticipated to be $10.00 per public share, implying an initial value
of $10.00 per public share. However, prior to our initial public offering, our sponsor paid a nominal aggregate purchase price of $25,000
for the founders shares, or approximately $0.0116 per share. As a result, the value of your public shares may be significantly diluted
upon the consummation of our initial business combination, when the founder shares are converted into public shares. For example, the
following table shows the dilutive effect of the founders shares on the implied value of the public shares upon the consummation of our
initial business combination, assuming that our equity value at that time is $87,543,750, which is the amount in cash we would have for
our initial business combination in the trust account after giving effect to the payment of $3,018,750 of deferred underwriting commissions,
no interest is earned on the funds held in the trust account, and no public shares are redeemed in connection with our initial business
combination, and without taking into account any other potential impacts on our valuation at such time, such as the trading price of our
public shares, the business combination transaction costs any equity issued or cash paid to the target’s equityholders or other
third parties, or the target’s business itself, including its assets, liabilities, management and prospects, or the impact of our
public and private warrants. At such valuation, each Class A ordinary share would have an implied value of $7.48 per share upon consummation
of our initial business combination, which would be a 25.2% decrease as compared to the initial implied value per public share of $10.00
(the price per unit in our initial public offering, assuming no value is ascribed to the public warrants).
Public shares |
|
|
8,625,000 |
|
Founder shares |
|
|
2,156,250 |
|
Underwriter
Founder shares(1) |
|
|
38,750 |
|
Private shares |
|
|
471,875 |
|
Total shares |
|
|
11,291,875 |
|
Total
funds in trust available for initial business combination (less deferred underwriting commissions) |
|
$ |
84,525,000 |
|
Initial implied value
per public share |
|
$ |
10.00 |
|
Implied
value per share upon consummation of initial business combination |
|
$ |
7.48 |
|
(1) We issued these underwriter founder shares to
BTIG and EarlyBirdCapital prior to the consummation of the IPO.
Our independent directors have a financial interest in our
founder shares, either directly or through our sponsor. They acquired that interest at no cost. As a result, our independent directors
have a financial interest in consummating an initial business combination, even if our shares decline in value after that business
combination and our public shareholders experience losses in connection with their investment. However, if we do not consummate
our initial business combination, the founder shares would be worthless. The financial interest of our independent directors in
the founder shares may give rise to a potential conflict of interest in considering potential target businesses. You should consider
this potential conflict of interest in deciding whether to invest in our initial public offering and whether to redeem your shares
at the time of our initial business combination.
In June 2021, our sponsor purchased the founders shares
for a purchase price of $25,000, or approximately $0.012 per share. Our independent directors are members of our sponsor, and have a financial
interest in the founders shares. Our independent directors acquired that membership interest at no cost. Consequently, our independent
directors may profit substantially if we consummate our initial business combination, even if our share price declines in value after
that business combination and our public shareholders, who typically have purchased their units or shares for prices at or about $10.00
each, experience significant losses in connection with their investment. If we fail to consummate an initial business combination, however,
the founders shares will be worthless, although in contrast our public shareholders will receive a pro rata distribution of the aggregate
amount then on deposit in the trust account. As a result, the financial interest of our independent directors in our founders shares may
prompt them to consider an initial business combination with a risky target business and/or on terms that may not be favorable to our
public shareholders, particularly as the deadline for completing our initial business combination nears. You should consider our independent
directors’ potential conflict of interest when deciding whether to invest in our initial public offering. If you do invest in our
initial public offering, you should consider this potential conflict of interest when you decide whether to redeem your shares at the
time of our initial business combination.
Our management team and our sponsor may make a profit on any
initial business combination, even if any public shareholders who did not redeem their shares would experience a loss on that business
combination. As a result, the economic interests of our management team and our sponsor may not fully align with the economic interests
of public shareholders.
Our structure may not fully align the economic interests of our sponsor and
those persons, including our officers and directors, who have interests in our sponsor with the economic interests of our public shareholders.
Upon the closing of our initial public offering, our sponsor will have invested in us an aggregate of $4,389,160, comprised of the $25,000
purchase price for the founder shares and the $4,364,160 purchase price for the private placement units. Assuming a trading price of $10.00
per share upon consummation of our initial business combination, the 2,156,250 founder shares and 471,875 private shares would have an
aggregate implied value of $21,562,500 and $4,718,750, respectively. Even if the trading price of our Class A ordinary shares was as low
as approximately $1.60 per share, and the private warrants were worthless, the value of the founder shares would be equal to the sponsor’s
initial investment in us. As a result, so long as we complete an initial business combination, our sponsor is likely to be able to recoup
its investment in us and make a substantial profit on that investment, even if our public shares lose significant value. Accordingly,
our sponsor and members of our management team who own interests in our sponsor may have incentives to pursue and consummate an initial
business combination quickly, with a risky or not well established target business, and/or on transaction terms favorable to the equityholders
of the target business, rather than continue to seek a more favorable business combination transaction that could result in an improved
outcome for our public shareholders or liquidate and return all of the cash in the trust to the public shareholders. For the foregoing
reasons, you should consider our sponsor’s and management team’s financial incentive to complete an initial business combination
when evaluating whether to invest in our initial public offering and/or redeem your shares prior to or in connection with an initial business
combination.
Members of our management team and board of directors have
significant experience as founders, board members, officers, executives or employees of other companies. Certain of those persons
have been, may be, or may become, involved in litigation, investigations or other proceedings, including related to those companies
or otherwise. The defense or of these matters could be time-consuming and could divert our management’s attention, and may have
an adverse effect on us, which may impede our ability to consummate an initial business combination.
During the course of their careers, members of our management team
and board of directors have had significant experience as founders, board members, officers, executives or employees of other companies.
As a result of their involvement and positions in these companies, certain of those persons have been, may be or may in the future
become involved in litigation, investigations or other proceedings, including relating to the business affairs of such companies,
transactions entered into by such companies, or otherwise. Individual members of our management
team and board of directors also may become involved in litigation, investigations or other proceedings involving claims or allegations
related to or as a result of their previous personal conduct, either in their capacity as a corporate officer or director or otherwise,
and may be personally named in such actions and potentially subject to personal liability as a result of their previous individual
conduct or otherwise. Any such liability may or may not be covered by insurance and/or indemnification, depending on the facts
and circumstances. The defense or prosecution of these matters could be time-consuming. Any litigation, investigations
or other proceedings may divert the attention and resources of our management team and board of directors away from identifying
and selecting a target business or businesses for our initial business combination and may negatively affect our reputation, which
may impede our ability to complete an initial business combination.
Risks Relating to the Post-Business Combination
Company
If we effect a business combination with a company located
in a 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 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.
If we pursue a target a company with operations or opportunities
outside of the United States for our initial business combination, we would be subject to risks associated with cross-border business
combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting
due diligence in a foreign 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; |
|
● |
laws governing the manner in which future business combinations
may be effected; |
|
● |
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; |
|
● |
rates of inflation, price instability and interest rate fluctuations; |
|
● |
challenges in collecting accounts receivable; |
|
● |
cultural and language differences; |
|
● |
employment regulations; |
|
● |
underdeveloped or unpredictable legal or regulatory systems; |
|
● |
protection of intellectual property rights; |
|
|
|
|
● |
applicable privacy laws and regulations; |
|
|
|
|
● |
employment laws and regulations; |
|
● |
social unrest, crime, strikes, riots, natural disasters and civil
disturbances; |
|
● |
regime changes and political upheaval; |
|
|
|
|
● |
obligatory military service by personnel; |
|
|
|
|
● |
government appropriation of assets; |
|
● |
terrorist attacks and wars; 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, including
the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and stock exchange rules. The
requirements of these rules and regulations will increase legal and financial compliance costs, make some activities more difficult,
time-consuming or costly and increase demand on the company’s systems and resources. The management team may not successfully or
efficiently manage the transition to operating a public company that is subject to significant regulatory oversight and reporting
obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors. 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, 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 the region of the target business may 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 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 if we conduct extensive due diligence on a target business
with which we combine, we cannot assure you that this diligence will identify all material issues that may be present with a particular
target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that
factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be
forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that
could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise
and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges
may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could
contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate
net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business
or by virtue of our obtaining post-combination debt financing. Accordingly, any shareholder or warrant holder who chooses
to remain a shareholder or warrant holder following our initial business combination could suffer a reduction in the value of their
securities. Such shareholders and warrant holders are unlikely to have a remedy for such reduction in value.
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 is 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. 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.
We may seek acquisition opportunities in industries or sectors
that may be outside of our management’s areas of expertise.
We will consider a business combination outside of
our management’s areas of expertise if a business combination candidate is presented to us and we determine that such candidate
offers an attractive acquisition opportunity for us. In the event we elect to pursue an acquisition outside of the areas of our management’s
expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the information contained
in this Annual Report regarding the areas of our management’s expertise would not be relevant to an understanding of the business
that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors.
Accordingly, any shareholders who choose to remain shareholders following our initial 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.
We may face risks related to the sports sector.
Although our efforts to identify a prospective target business will
not be limited to a particular industry or geographical region, we intend to focus our search on businesses in the sports,
media and data analytics sectors, with a focus on professional sports businesses. Business combinations with professional sports
businesses entail special considerations and risks. Professional sports businesses may be particularly sensitive to market demand
when teams perform poorly or when potential customers are reluctant to attend sporting events because of the risks associated with
the COVID-19 pandemic. An uneven level of general economic activity, uncertainty in the financial markets and slow job growth,
if those were to occur, could have a negative impact on consumer confidence and discretionary spending, which could affect professional
sports businesses. There also may intense competition for professional sports teams that are available, and there may be delays
associated with approval of an acquisition that may make certain targets unavailable within our completion window. Any of the foregoing
could have an adverse impact on our ability to identify an attractive target business in the professional sports industry. However,
our efforts in identifying prospective target businesses will not be limited to the professional sports industry. If we identify
a target business in another industry, we will be subject to the risks attendant to the specific industry in which that target
business operates, which may or may not be different than the risks listed above.
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.
We are dependent upon our officers and directors and their
departure could adversely affect our ability to operate.
Our operations are dependent upon a relatively small group of individuals
and, in particular, Mr. Conway and Mr. Kalt, our Chief Executive Officer and Chief Financial Officer, and our other officers
and directors. We believe that our success depends on the continued service of our officers and directors, at least until we have
completed our initial business combination. In addition, our officers and directors are not required to commit any specified amount
of time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities,
including identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement
with, or key-man insurance on the life of, any of our directors or officers. The unexpected loss of the services of one or
more of our directors or officers could have a detrimental effect on us.
Our officers and directors allocate their time to other businesses
thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest
could have a negative impact on our ability to complete our initial business combination.
Our officers and directors are not required to, and
do not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations
and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the
completion of our initial business combination. Each of our officers is engaged in several other business endeavors for which he or she
may be entitled to substantial compensation and our officers are not obligated to contribute any specific number of hours per week to
our affairs. Our independent directors also serve as officers and board members for other entities. If our officers’ and directors’
other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels,
it could limit their ability to devote time to our affairs, which may have a negative impact on our ability to complete our initial business
combination.
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 intended to be conducted
by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should
be presented.
Following the completion of our initial public offering
and until we consummate our initial business combination, we will 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 a similar business.
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.
Our officers, directors, security holders and their respective
affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits our directors,
officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to
be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into
a business combination with a target business that is affiliated with our sponsor, our directors or officers, although we do not
intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business
activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and
ours.
We may engage in a business combination with one or more target
businesses that have relationships with entities that may be affiliated with our sponsor, officers, directors or initial shareholders
which may raise potential conflicts of interest.
In light of the involvement of our sponsor, officers and directors
with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, officers and directors. Such
entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware
of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated,
and there have been no preliminary discussions concerning a business combination with any such entity or entities.
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 2,156,250 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. Simultaneous with the closing of our initial public
offering, our sponsor purchased an additional 436,416 private units. Each private unit is comprised of one private share and one-half
of a warrant. As such, our sponsor, its affiliates, our management members and/or their permitted transferees own approximately 22.9%
of our issued and outstanding shares after our initial public offering. 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 being sold in 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) shares purchased by the sponsor concurrently with the offering are subject to certain
transfer restrictions (unlike public shares). Furthermore, our sponsor, officers and directors entered into a letter agreement with us,
pursuant to which they 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
and private shares if we fail to complete our initial business combination within the completion window (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 completion window), 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 completion window nears.
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. 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.
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 recent months, the market for directors and officers liability
insurance for special purpose acquisition companies has changed. Fewer insurance companies are offering quotes for directors and
officers liability coverage, 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
You will not have any rights or interests in funds from the trust
account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares
or warrants, potentially at a loss.
Our public shareholders will be entitled to receive funds from the trust
account only upon the earliest to occur of: (1) 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, (2) the redemption
of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles
of association (A) to modify the substance or timing of 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 and (3)
the redemption of our public shares if we are unable to complete our initial business combination within the completion window, subject
to applicable law and as further described herein. In no other circumstances will a shareholder have any right or interest of any kind
in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants.
Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
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.
Our units are listed on Nasdaq. Following the date
that our Class A ordinary shares and warrants are eligible to trade separately, we anticipate that our Class A ordinary shares and warrants
will be listed separately on Nasdaq. Although, we believe, we meet on a pro forma basis Nasdaq’s minimum initial listing standards,
which generally only require that we meet certain requirements relating to shareholders’ equity, market capitalization, aggregate
market value of publicly held shares and distribution requirements, we cannot assure you that our securities will be, or will continue
to be, listed on Nasdaq in the future or prior to our initial business combination. In order to continue listing our securities on Nasdaq
prior to our initial business combination, we must maintain certain financial, distribution and share price levels. Additionally, in connection
with our initial business combination, it is likely that Nasdaq will require us to file a new initial listing application and meet its
initial listing requirements as well as certain qualitative requirements, as opposed to its more lenient continued listing requirements.
We cannot assure you that we will be able to meet those initial listing requirements at that time.
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:
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a limited availability of market quotations for our securities; |
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reduced liquidity with respect to such securities; |
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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; |
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a limited amount of news and analyst coverage for our company;
and |
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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 we expect that our units and eventually our Class A ordinary shares and warrants will be listed on Nasdaq, our units, Class A
ordinary shares and warrants will 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.
Because each unit contains one-half of one redeemable warrant and
only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
Each unit contains one-half of one redeemable warrant. No fractional
warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least two
units, you will not be able to receive or trade a whole warrant. This is different from other offerings similar to ours whose units include
one share and one warrant to purchase one whole share. We have established the components of the units in this way in order to reduce
the dilutive effect of the warrants upon completion of an initial business combination since the warrants will be exercisable in the aggregate
for one-half of the number of shares compared to units that each contain a warrant to purchase one whole share, thus making us, we believe,
a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if
they included a warrant to purchase one whole share.
Our initial shareholders will control the appointment of our board
of directors until completion of our initial business combination and will hold a substantial interest in us. As a result, they will 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.
Prior to our initial business combination, only the
founders shares, all of which are held by our initial shareholders, will have the right to vote on the appointment of directors, 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. If our initial
shareholders purchase any Class A ordinary shares in our initial public offering or in the aftermarket or in privately negotiated transactions,
this would increase their influence over these actions. Accordingly, our initial shareholders will exert significant influence over actions
requiring a shareholder vote at least until the completion of our initial business combination.
Our sponsor paid an aggregate of $25,000, or
approximately $0.0116 per founders share. 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 at a nominal price, significantly
contributing to this dilution to investors in our initial public offering.
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. If, following our exercise of our redemption rights, a warrant
holder fails to comply with the procedures for exercising its warrants, such warrant holder would be required to accept the nominal redemption
price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the market value
of the warrants.
Our warrants contained in our units, together with our founders shares,
may have an adverse effect on the market price of our Class A ordinary shares and make it more difficult to effectuate our initial business
combination.
We have issued, as part of the 8,625,000 units that
we sold in our initial public offering, warrants to purchase 4,312,500 Class A ordinary shares, with an exercise price of $11.50 per warrant
(subject to adjustment as provided therein), and, simultaneously with the closing of our initial public offering, we sold in a private
placement an aggregate of 471,875 units that contain 235,938 private warrants, each exercisable to purchase one Class A ordinary share
at a price of $11.50 per share, subject to adjustment as provided therein. Our sponsor holds 2,156,250 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 units, at the price of $10.00 per unit, at the option of the lender. Such units would be identical to
the private units. 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
the units in our initial public offering except that, so long as they are held by our sponsor or its permitted transferees: (1) 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 (2) they (including the ordinary shares
issuable upon exercise of these warrants) are entitled to registration rights.
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. Following our initial public offering, 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 will also be 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.
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 preferred
shares, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of
a premium over prevailing market prices for our securities.
After our initial business combination, it is possible that a majority
of our directors and officers will live outside the United States and all or substantially 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 company may result in uncertain
or adverse United States federal income tax consequences.
An investment in our company may result in uncertain
United States federal income tax consequences. For instance, because there are no authorities that directly address instruments similar
to our units, 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, the United States federal income tax
consequences of a cashless exercise of a warrant is unclear under current law. Finally, 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.
Since holders of our founders shares will be the only shareholders
of the company that have the right to vote on the appointment of directors prior to our initial business combination, Nasdaq may consider
us to be a “controlled company” within the meaning of Nasdaq’s rules and, as a result, we may qualify for exemptions
from certain corporate governance requirements that would otherwise provide protection to shareholders of other companies.
Holders of our founders shares will be the only shareholders of the company
that have the right to vote on the appointment of directors. As a result, Nasdaq may consider us to be a “controlled company”
within the meaning of Nasdaq’s corporate governance standards. Under Nasdaq corporate governance standards, a company of which more
than 50% of the voting power for the appointment of directors is held by an individual, a group or another company is a “controlled
company” and may elect not to comply with certain corporate governance requirements, including the requirements that:
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we have a board that includes
a majority of “independent directors,” as defined under Nasdaq rules; |
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we have a compensation committee of our board that is comprised
entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and |
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we have independent director
oversight of our director nominations. |
We do not intend to utilize these exemptions and intend to comply with
the corporate governance requirements of Nasdaq, subject to applicable phase-in rules. However, if we determine in the future to utilize
some or all of these exemptions, you will not have the same protections afforded to shareholders of companies that are subject to all
of Nasdaq’s corporate governance requirements.
If we are unable to consummate our initial business
combination within the completion window, our public shareholders may be forced to wait beyond the completion window before redemption
from our trust account.
If we are unable to consummate our initial business combination within
the completion window, we will distribute the aggregate amount then on deposit in the trust account (less up to $100,000 of the net interest
earned thereon to pay dissolution expenses), pro rata to our public shareholders by way of redemption and cease all operations except
for the purposes of winding up of our affairs, as further described herein. Any redemption of public shareholders from the trust account
shall be effected automatically by function of our amended and restated memorandum and articles of association prior to any voluntary
winding up. If we are required to windup, liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders,
as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies
Act. In that case, investors may be forced to wait beyond the completion window before the redemption proceeds of our trust account become
available to them and they receive the return of their pro rata portion of the proceeds from our trust account. We have no obligation
to return funds to investors prior to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business
combination or amend certain provisions of our amended and restated memorandum and articles of association and then only in cases where
investors have properly sought to redeem their Class A ordinary shares. Only upon our redemption or any liquidation will public shareholders
be entitled to distributions if we are unable to complete our initial business combination and do not amend certain provisions of our
amended and restated memorandum and articles of association prior thereto.
If a shareholder fails to receive notice of our offer to redeem our
public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such
shares may not be redeemed.
We will comply with the tender offer rules or proxy
rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these
rules, if a shareholder fails to receive our tender offer or proxy materials, as applicable, such shareholder may not become aware of
the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that we will furnish
to holders of our public shares in connection with our initial business combination will describe the various procedures that must be
complied with in order to validly tender or redeem public shares. For example, we may require
our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street
name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer or proxy materials
documents mailed to such holders, or up to two business days prior to the scheduled vote on the proposal to approve the initial business
combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. In
the event that a shareholder fails to comply with these procedures, its shares may not be redeemed.
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 4,312,500 of our ordinary
shares, at a price of $11.50 per share (subject to adjustment as provided therein), as part of the 8,625,000 units sold in our initial
public offering. Furthermore, simultaneously with the closing of our initial public offering, we issued to our sponsor, BTIG and EarlyBirdCapital
in a private placement an aggregate of 235,938 private warrants, as part of the 471,875 private units. 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 units, at a price of $10.00 per unit, at the option of
the lender. Such units would be identical to the private units.
Pursuant to an agreement 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, BTIG
and EarlyBirdCapital, as the holders of our private units, and their permitted transferees can demand that we register the resale of their
private shares and private warrants, and the issuance of the Class A ordinary shares 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. Furthermore, BTIG and EarlyBirdCapital, as the holders of the underwriter
founder shares, also are entitled to “piggyback” registration rights whereby they may request the registration of the resale
of their underwriter founder shares as part of an offering that will be conducted by us or by our other shareholders.
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, BTIG or EarlyBirdCapital, 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 preferred shares
to complete our initial business combination or under an employee incentive plan after completion of our initial business combination.
We may also issue Class A ordinary shares upon the conversion of the 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 authorize the issuance of ordinary shares, including 200,000,000 Class A ordinary shares, par value $0.0001 per share, and
20,000,000 Class B ordinary shares, par value $0.0001 per share, as well as 1,000,000 preferred shares, par value $0.0001. Following the
consummation of our initial public offering, there were 190,864,375 and 17,843,750 authorized but unissued Class A ordinary shares and
Class B ordinary shares, respectively, available for issuance, which amount includes shares reserved for issuance upon exercise of outstanding
warrants, and 1,000,000 authorized but unissued preferred shares available for issuance.
We may issue a substantial number of additional Class A
ordinary shares or preferred shares in order to complete our initial business combination or under an employee incentive plan after completion
of our initial business combination. We may also issue Class A ordinary shares to redeem the warrants or 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 incorporation. However, our amended and restated memorandum and articles
of incorporation provide, among other things, that prior to our initial business combination, we may not issue additional capital shares
that would entitle the holders thereof to (1) receive funds from the trust account or (2) vote pursuant to our amended and restated
memorandum and articles of incorporation on any initial business combination or any amendments to our amended and restated memorandum
and articles of incorporation. The issuance of additional shares of common or preferred shares:
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may significantly dilute the equity
interest of investors in our initial public offering, which dilution would increase if the anti-dilution provisions in the Class B
ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B
ordinary shares; |
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may subordinate the rights of holders
of ordinary shares if preferred shares are issued with rights senior to those afforded our ordinary shares; |
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could cause a change of control
if a substantial number of ordinary shares is issued, which may affect, among other things, our ability to use our net operating loss
carry forwards, if any, and could result in the resignation or removal of our present directors and officers; |
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may have the effect of delaying
or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; |
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may adversely affect prevailing
market prices for our units, Class A ordinary shares and/or warrants; and |
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may not result in adjustment to
the exercise price of our 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. 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 the underwriter
founder shares and the private shares). 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 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 to recognize taxable income in the jurisdiction in which the shareholder is a tax resident or in which its members are resident
if it is a tax transparent entity. We do not intend to make any cash distributions to shareholders to pay such taxes. Shareholders may
be subject to withholding taxes or other taxes with respect to their ownership of us after the reincorporation.
General Risk Factors
We are a newly incorporated company with very limited operating history
and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a newly incorporated company incorporated under the laws of the
Cayman Islands with limited operating results. Because we lack a significant operating history, you have no basis upon which to evaluate
our ability to achieve our business objective of completing our initial business combination with one or more target businesses. We have
no plans, arrangements or understandings with any prospective target business concerning a business combination and may be unable to complete
our initial business combination. If we fail to complete our initial business combination, we will never generate any operating revenues.
Cyber incidents or attacks directed
at us could result in information theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies,
including information systems, infrastructure and cloud applications and services, including those of third parties with which we may
deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure
of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential
data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against
such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability
to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business
and lead to financial loss.
We are an emerging growth company
and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure
requirements available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to
investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company”
within the meaning of the Securities Act, as modified by the JOBS Act, and we may 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 may not have access to certain information they may deem important. We could be an emerging growth company for up to
five years, although circumstances could cause us to lose that status earlier, including if the market value of our ordinary shares
held by non-affiliates equals or exceeds $700 million as of the end of any second quarter of a fiscal year, in which case we would
no longer be an emerging growth company as of the end of such fiscal year. We cannot predict whether investors will find our securities
less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance
on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading
market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of
the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until
private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class
of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS
Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging
growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which
means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging
growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison
of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which
has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards
used.
Additionally, we are a “smaller
reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain
reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will
remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held
by non-affiliates equals or exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual
revenues equaled or exceeded $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. To the extent we take advantage of such
reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.
There may be tax consequences
to our business combinations that may adversely affect us.
While we expect to undertake any merger
or acquisition so as to minimize taxes both to the acquired business and/or asset and us, such business combination might not meet the
statutory requirements of a tax-free reorganization, or the parties might not obtain the intended tax-free treatment upon a transfer of
shares or assets. A non-qualifying reorganization could result in the imposition of substantial taxes on the acquired business and/or
asset and us.
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 are 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.