Item 1.
Business
Overview
We are an early-stage blank
check company incorporated as a Delaware corporation 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 or entities, which we refer to throughout this
report as our initial business combination. Our sponsor is affiliated with Launchpad Capital (“Launchpad”). Our team has collectively
raised 7 SPACs, totaling $2,200,000,000 in trust capital, and has made extensive private market investments, including Square, Eventbrite,
DigitalOcean, Calm and Gitlab.
Initial Public Offering and Concurrent Private
Placement
On January 19, 2022, we consummated
our initial public offering of 28,750,000 units. Each unit consists of one share of Class A common stock of the Company, par
value $0.0001 per share (“Class A Common Stock”), and one-half of one redeemable warrant of the Company (“warrant”),
with each whole warrant entitling the holder thereof to purchase one share of Class A Common Stock for $11.50 per share. The units
were sold at a price of $10.00 per unit, generating gross proceeds to the Company of $287,500,000.
Simultaneously with the closing
of the initial public offering, we completed the private sale of an aggregate of 1,365,000 private placement units (1,115,500 private
placement units to our sponsor, 212,500 private placement units to Cantor and 37,500 private placement units to CCM) at a purchase price
of $10.00 per private placement unit, generating gross proceeds to the Company of $13,655,000.
A total of $293,250,000, comprised
of the proceeds from the initial public offering after offering expenses and a portion of the proceeds of the sale of the private placement
units, was placed in the trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee.
Business Strategy
The Company exists to align
the benefits of a business combination for a high-quality partner company with long-term value creation for our stockholders. We believe
that our prior experience, relationships, and track-record with SPACs and private market investments allow us to source, select and transact
with a partner company that can fulfill this goal.
As
investors, we believe that there is no single set of investment criteria that best allows us to meet our goals. It is our experience that
quality outcomes stem from a relentless focus on our own investment processes and the prudent application of our core investment tenets.
Our key investment tenets
are:
| · | Backing exceptional leaders. It is our belief
that the best returns over time come from partnering with exceptional management teams that have a clear record of successful execution
and large ambitions for their company. It is our experience that such high-quality leadership teams focus deeply on leading indicators
of business success, including customer value, customer engagement, expansion of addressable market and company culture to drive value
over the long-term. |
| · | Investing in growth with a quality business model
in a large market. We seek to invest where our returns are driven primarily by revenue growth. We highly prefer large addressable markets
that provide the capacity for continued growth well past our own investment horizon. We seek companies that combine high growth and large
markets with an effective business model, which we define as the ability to sustainably generate future cash flows. We typically evaluate
the potential to generate future cash flows though deep diligence on unit economics, revenue quality and overall business model, and we
generally prefer markets with strong secular tailwinds. |
| · | Finding clear business moats. Deep moats and
substantive competitive differentiation are essential to sustaining growth and margin over time. Such moats can take many forms, ranging
from network effects, to branding, to aggregator effects, to scale advantages. While we are agnostic as to specific moats and competitive
differentiation, we invest significant time understanding and validating the sustainability and strength of each. |
| · | Reasonable valuation. Valuation is key to creating
upside potential, and to shielding from downside risk. Leveraging our extensive private- and public-market investing experience, we work
closely and transparently with management teams and investors to establish valuations and economic alignment that create the right foundation
for long-term value creation. |
| · | ESG considerations. We recognize the increasing
importance of environmental, social and governance (ESG) initiatives and believe integration of robust ESG policies is essential to a
business’s sustainable growth. Our investment strategy will seek to promote responsible and purposeful business standards, focused
on not only the impact of products and services, but on the business processes of the companies themselves. |
Beyond these investment tenants, we focus on factors
important to successful SPAC-combinations:
| · | Sufficient scale. We focus on companies of sufficient
size and scale that there will be sufficient trading liquidity post-de-SPAC to allow for strong, fundamentals-driven growth. |
| · | Clear benefits to going public. We are focused
on companies that clearly benefit from operating publicly, via greater access to capital, better branding and visibility, or improved
employee incentives around stock compensation. |
| · | Public markets operations capabilities. We concentrate
heavily on companies’ control, processes, controls, and governance to evaluate their capacity to operate publicly. |
| · | Clear rationale for SPACing. We especially seek
companies that can harvest benefits from SPACs not offered by IPOs or other capital solutions. We believe such advantages can include
ability to leverage projections to align investors around growth and profitability expectations, earlier access to markets, raising more
capital, de-risking through testing the waters and PIPE process, market validation from PIPE participants. |
Initial Business Combination
We have until April 19, 2023
to consummate an initial business combination. However, if we anticipate that we may not be able to consummate our initial business combination
by April 19, 2023, we may, by resolution of our board of directors if requested by our sponsor, extend the period of time we will have
to consummate an initial business combination up to two times, each by an additional three months (giving us until July 19, 2023 or October
19, 2023 to consummate an initial business combination), provided that, pursuant to the terms of our amended and restated certificate
of incorporation and the trust agreement to entered into between us and Continental Stock Transfer & Trust Company, dated January
13, 2022, in order for the time available for us to consummate our initial business combination to be extended, our sponsor or its affiliates
or designees, upon five days’ advance notice prior to the applicable deadline, must deposit into the trust account $2,875,000 ($0.10
per share), on or prior to the date of the applicable deadline. Our public stockholders will not be entitled to vote or redeem their shares
in connection with such extension. In the event that our sponsor elects to extend the time to complete a business combination and deposits
the applicable amount of money into trust, the sponsor would receive a non-interest bearing, unsecured promissory note equal to the amount
of any such deposit that will not be repaid in the event that we are unable to close a business combination unless there are funds available
outside the trust account to do so. In the event that we receive notice from our sponsor five days prior to the deadline of its intent
to effect an extension, we intend to issue a press release announcing such intention at least three days prior to the deadline. In addition,
we intend to issue a press release the day after the applicable deadline announcing whether the funds had been timely deposited. Our sponsor
and its affiliates or designees are not obligated to fund the trust account to extend the time for us to complete our initial business
combination. To the extent that some, but not all, of our sponsor’s affiliates or designees decide to extend the period of time
to consummate our initial business combination, such affiliates or designees may deposit the entire amount required. If we are unable
to consummate our initial business combination within such time period, we will, as promptly as possible but not more than 10 business
days thereafter, redeem 100% of our outstanding public shares for a pro rata portion of the funds held in the trust account, including
a pro rata portion of any interest earned on the funds held in the trust account and not previously released to us to pay our taxes, and
then seek to dissolve and liquidate. However, we may not be able to distribute such amounts as a result of claims of creditors which may
take priority over the claims of our public stockholders. In the event of our dissolution and liquidation, the warrants will expire and
be worthless.
Nasdaq rules require that
we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held
in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at
the time of our signing a definitive agreement in connection with our initial business combination. Our board of directors will make the
determination as to the fair market value of our initial business combination. If our board of directors is not able to independently
determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking
firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we
consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our
initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target
or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. Additionally, pursuant to
Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.
We anticipate
structuring our initial business combination either (i) in such a way so that the post-transaction company in which our public
stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in
such a way so that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business
in order to meet certain objectives of the target management team or stockholders, or for other reasons. However, we will only
complete an initial 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 of 1940, as amended (the “Investment Company Act”). Even if
the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the
initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations
ascribed to the target and us in the initial business combination. 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 of a target. In this case, we would acquire a
100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our
stockholders 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 taken into account for purposes of Nasdaq’s 80% fair market value test. If the initial business
combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of
the transactions and we will treat the target businesses together as the initial business combination for purposes of a tender offer
or for seeking stockholder approval, as applicable.
Acquisition Strategy & Business Combination
Criteria
We are identifying businesses
that marry exceptional teams with exceptional opportunities in a way that is consistent with our investment philosophy and strategy. While
our business strategy is our north star in evaluating businesses, our eventual partner company may not meet some or all of our criteria.
While prudent investment thinking and the application of well-grounded principles guide our company evaluation, we note that our business
strategy must be seen as a general set of guidelines rather than an exhaustive list, and we may rely on other criteria and considerations
in selecting our eventual partner company.
In evaluating potential partner
companies, we conduct thorough due diligence, including but not limited to management meetings, document review, financial analysis, technology
evaluations, and interviews with competitors, customers and industry experts. We believe that there is no substitute for deep, fundamental
analysis in understanding whether or not a company has ample runway for growth and cash flows. As such, our expectation is that we will
be some of the most knowledgeable people on our eventual partner company globally at the time of initial business combination.
We further believe that a
short-term orientation towards investing yields sub-par results and unnecessary risk. Our view is that strong outcomes most predictably
derive from a deep understanding of a business’ vision, growth drivers, constraints and opportunities, along with their financial
implications, over the long-term. We seek to apply this discipline to the selection of our initial business combination and will not invest
behind binary outcomes that hinge on technology or regulatory risks. Instead, we seek businesses where there are sufficient data that
we can develop a fundamentals-driven forecast of growth and margins over time.
Status as a Public Company
We believe our structure makes
us an attractive business combination partner to target businesses. As a public company, we offer a target business an alternative to
the traditional initial public offering through a merger or other business combination with us. Following an initial business combination,
we believe the target business would have greater access to capital and additional means of creating management incentives that are better
aligned with stockholders’ interests than it would as a private company. A target business can further benefit by augmenting its
profile among potential new customers and vendors and aid in attracting talented employees. In a business combination transaction with
us, the owners of the target business may, for example, exchange their shares of stock in the target business for our shares of Class
A common stock (or shares of a new holding company) or for a combination of our shares of Class A common stock and cash, allowing us to
tailor the consideration to the specific needs of the sellers.
Although there are various
costs and obligations associated with being a public company, we believe target businesses will find this method a more expeditious and
cost-effective method to becoming a public company than the typical initial public offering. The typical initial public offering process
takes a significantly longer period of time than the typical business combination transaction process, and there are significant expenses
in the initial public offering process, including underwriting discounts and commissions, marketing and road show efforts that may not
be present to the same extent in connection with an initial business combination with us.
Furthermore, once a proposed
initial business combination is completed, the target business will have effectively become public, whereas an initial public offering
is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay
or prevent the offering from occurring or could have negative valuation consequences. Following an initial business combination, we believe
the target business would then have greater access to capital and an additional means of providing management incentives consistent with
stockholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further
benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
While we believe that our
structure and our management team’s backgrounds make us an attractive business partner, some potential target businesses may view
our status as a blank check company, such as our lack of an operating history and our ability to seek stockholder approval of any proposed
initial business combination, negatively.
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 independent registered public accounting
firm 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 stockholder 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 Class A common stock that is held by non-affiliates exceeds $700 million as of the prior December 31, and (2)
the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
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 shares held by non-affiliates exceeds $250
million as of the prior December 31, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market
value of our shares held by non-affiliates exceeds $700 million as of the prior December 31.
Financial Position
With
funds available for an initial business combination initially in the amount of $278,125,000 (after
payment of $15,125,000 of deferred underwriting fees), before 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 or leverage ratio.
Because we are able to complete
our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility
to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs
and desires. However, we have not taken any steps to secure third party financing and there can be no assurance it will be available to
us.
Effecting Our Initial Business Combination
We are not presently engaged
in, and we will not engage in, any operations until we consummate our initial business combination. We intend to effectuate our initial
business combination using cash from the proceeds of our initial public offering and the private placement of the private placement units,
the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or
backstop agreements we may enter into following the consummation of our initial public offering or otherwise), shares issued to the owners
of the target, debt issued to banks or other lenders or the owners of the target, or a combination of the foregoing. We may seek to complete
our initial business combination with a company or business that may be financially unstable or in its early stages of development or
growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination
is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration
in connection with our initial business combination or used for redemptions of our Class A common stock, we may apply the balance of the
cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the
post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination,
to fund the purchase of other companies or for working capital.
We may seek to raise additional
funds through a private offering of debt or equity securities in connection with the completion of our initial business combination, and
we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust
account. In addition, we are targeting businesses larger than we could acquire with the net proceeds of our initial public offering and
the sale of the private placement units, and may as a result be required to seek additional financing to complete such proposed initial
business combination. Subject to compliance with applicable securities laws, we would expect to complete such financing only simultaneously
with the completion of our initial business combination. In the case of an initial business combination funded with assets other than
the trust account assets, our proxy materials or tender offer documents disclosing the initial business combination would disclose the
terms of the financing and, only if required by law, we would seek stockholder approval of such financing. There are no prohibitions on
our ability to raise funds privately or through loans in connection with our initial business combination. At this time, we are not a
party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities
or otherwise.
Although our management assesses
the risks inherent in a particular target business with which we may combine, we cannot assure you that this assessment results in our
identifying all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning that
we can do nothing to control or reduce the chances that those risks will adversely impact a target business.
Sources of Target Businesses
Target business
candidates may be brought to our attention from various unaffiliated sources, including investment bankers and investment
professionals. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us
by calls or mailings. These sources may also introduce us to target businesses in which they think we may be interested on an
unsolicited basis, since many of these sources will have read the prospectus of our initial public offering and know what types of
businesses we are targeting. Our officers and directors, as well as our sponsor and their affiliates, may also bring to our
attention target business candidates that they become aware of through their business contacts as a result of formal or informal
inquiries or discussions they may have, as well as attending trade shows or conventions. In addition, we expect to receive a number
of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result of the business
relationships of our officers and directors and our sponsor and their respective industry and business contacts as well as their
affiliates. While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in
business acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a
finder’s fee, consulting fee, advisory fee or other compensation to be determined in an arm’s length negotiation based
on the terms of the transaction. We will engage a finder only to the extent our management determines that the use of a finder may
bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a
potential transaction that our management determines is in our best interest to pursue. Payment of finder’s fees is
customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the trust account.
In no event, however, will our sponsor or any of our existing officers or directors, or any entity with which our sponsor or
officers are affiliated, be paid any finder’s fee, reimbursement, consulting fee, monies in respect of any payment of a loan
or other compensation by the company prior to, or in connection with any services rendered for any services they render in order to
effectuate, the completion of our initial business combination (regardless of the type of transaction that it is). Although none of
our sponsor, executive officers or directors, or any of their respective affiliates, will be allowed to receive any compensation,
finder’s fees or consulting fees from a prospective business combination target in connection with a contemplated initial
business combination, we do not have a policy that prohibits our sponsor, executive officers or directors, or any of their
respective affiliates, from negotiating for the reimbursement of out-of-pocket expenses by a target business. We have agreed to pay
our sponsor a total of $33,333 per month until April 19, 2023, which is extendable at our sponsor’s option to up to July 19,
2023 or October 19, 2023, as described herein, for office space, utilities, secretarial and administrative support. Further, we have
agreed to pay FintechForce, Inc., an entity affiliated with our Chief Financial Officer, a fee of $10,000 per month for CFO
services, financial planning and analysis and general professional services. In addition, we have agreed to pay an advisor a fee of
$14,900 per month for advisory and consulting services relating to target identification, analysis, and support. Some of our
officers and directors and advisors may enter into employment or consulting agreements with the post-transaction company following
our initial business combination. The presence or absence of any such fees or arrangements will not be used as a criterion in our
selection process of an initial business combination candidate.
We are not prohibited from
pursuing an initial business combination with an initial business combination target that is affiliated with our sponsor, officers, directors
or advisors or making the initial business combination through a joint venture or other form of shared ownership with our sponsor, officers
or directors. In the event we seek to complete our initial business combination with an initial business combination target that is affiliated
with our sponsor, officers, directors or advisors, we, or a committee of independent directors, would obtain an opinion from an independent
investment banking firm or from another independent entity that commonly renders valuation opinions that such an initial business combination
is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
Lack of Business Diversification
For an indefinite period of
time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance
of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or
several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in
a single line of business. By completing our initial business combination with only a single entity, our lack of diversification may:
| · | subject us to negative economic, competitive
and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate
after our initial business combination, and |
| · | cause us to depend on the marketing and sale
of a single product or limited number of products or services. |
Limited Ability to Evaluate the Target’s
Management Team
Although we closely scrutinize
the management of a prospective target business when evaluating the desirability of effecting our initial business combination with that
business, our assessment of the target business’ management may not prove to be correct. In addition, the future management may
not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our
management team, if any, in the target business cannot presently be stated with any certainty. The determination as to whether any of
the members of our management team will remain with the combined company will be made at the time of our initial business combination.
While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business
combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination.
Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations
of the particular target business.
We cannot assure you that
any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether
any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following an initial business
combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure
you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge
or experience necessary to enhance the incumbent management.
Stockholders May Not Have the Ability to Approve
Our Initial Business Combination
We may conduct redemptions
without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is required
by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons. Presented
in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval
is currently required under Delaware law for each such transaction.
Type of Transaction | |
Whether Stockholder Approval is Required |
Purchase of assets | |
No |
Purchase of stock of target not involving a merger with the company | |
No |
Merger of target into a subsidiary of the company | |
No |
Merger of the company with a target | |
Yes |
Under Nasdaq’s listing
rules, stockholder approval would be required for our initial business combination if, for example:
| · | we issue shares of Class A common stock that
will be equal to or in excess of 20% of the number of shares of our Class A common stock then outstanding; |
| · | any of our directors, officers or substantial
stockholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest),
directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of common stock
could result in an increase in outstanding common shares or voting power of 5% or more; or |
| · | the issuance or potential issuance of common stock will result in our undergoing
a change of control. |
Permitted Purchases of our Securities
If we seek stockholder 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, initial stockholders, directors, officers, advisors or their affiliates may purchase shares or public
warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business
combination. There is no limit on the number of shares our initial stockholders, directors, officers, advisors or their affiliates may
purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, they have no current commitments,
plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. If they
engage in such transactions, they will not make any such purchases when they are in possession of any material nonpublic information not
disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that
such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction
subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that
the purchases are subject to such rules, the purchasers will comply with such rules. Any such purchases will be reported pursuant to Section
13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. None of the funds held
in the trust account will be used to purchase shares or public warrants in such transactions prior to completion of our initial business
combination.
The purpose of any such purchases
of shares could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder
approval of the 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.
Any such purchases of our securities 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 shares of Class A common stock or warrants may
be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the
quotation, listing or trading of our securities on a national securities exchange.
Our sponsor, officers, directors,
advisors and/or their affiliates anticipate that they may identify the stockholders with whom our sponsor, officers, directors, advisors
or their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption
requests submitted by stockholders following our mailing of proxy materials in connection with our initial business combination. To the
extent that our sponsor, officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact
only potential selling stockholders who have expressed their election to redeem their shares for a pro rata share of the trust account
or vote against our initial business combination, whether or not such stockholder has already submitted a proxy with respect to our initial
business combination. Our sponsor, officers, directors, advisors or their affiliates will only purchase shares if such purchases comply
with Regulation M under the Exchange Act and the other federal securities laws.
Any purchases by our sponsor,
officers, directors, advisors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only
be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation
under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in
order for the safe harbor to be available to the purchaser. Our sponsor, officers, directors, advisors and/or their affiliates will not
make purchases of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Any such purchases will
be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchases are subject to such reporting requirements.
Redemption Rights for Public Stockholders upon Completion of our
Initial Business Combination
We will provide our
public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of
our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust
account as of two business days prior to the consummation of the initial business combination including interest earned on the funds
held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public
shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately
$10.20 per public share. Such amount will be increased by an anticipated $0.10 per public share pursuant to our sponsor depositing
additional funds into the trust account for such three-month extension of our time to consummate an initial business combination our
sponsor elects to effectuate. The per-share amount we will distribute to investors who properly redeem their shares will not be
reduced by the deferred underwriting commissions we will pay to Cantor Fitzgerald & Co. Our sponsor, officers and directors have
entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any
founder shares and any public shares held by them in connection with the completion of our initial business combination.
Manner of Conducting Redemptions
We will provide our public
stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial
business combination either (i) in connection with a stockholder meeting called to approve the initial business combination or (ii) by
means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed initial business combination or conduct
a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction
and whether the terms of the transaction would require us to seek stockholder approval under the law or stock exchange listing requirement.
Under Nasdaq rules, asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with
our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend
our amended and restated certificate of incorporation would require stockholder approval. If we structure an initial business combination
with a target company in a manner that requires stockholder approval, we will not have discretion as to whether to seek a stockholder
vote to approve the proposed initial business combination. We may conduct redemptions without a stockholder vote pursuant to the tender
offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirements or we choose to seek stockholder
approval for business or other legal reasons. So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required
to comply with such rules.
If a stockholder vote is not
required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated
certificate of incorporation:
| · | conduct the redemptions pursuant to Rule 13e-4
and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and |
| · | file tender offer documents with the SEC prior
to completing our initial business combination which contain substantially the same financial and other information about the initial
business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation
of proxies. |
Upon the public announcement
of our initial business combination, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase
shares of our Class A common stock in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule
14e-5 under the Exchange Act.
In the event we conduct redemptions
pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a)
under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer
period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public
shares which are not purchased by our sponsor, which number will be based on the requirement that we will only redeem our public shares
so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation
of our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s
“penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating
to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the
tender offer and not complete the initial business combination.
If, however, stockholder approval
of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder approval for business
or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:
| · | conduct the redemptions in conjunction with a
proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the
tender offer rules, and |
| · | file proxy materials with the SEC. |
In the event that we seek
stockholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our
public stockholders with the redemption rights described above upon completion of the initial business combination.
If we seek stockholder
approval, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are
voted in favor of the initial business combination. A quorum for such meeting will consist of the holders present in person or by
proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of
capital stock of the company entitled to vote at such meeting. Our initial stockholders will count toward this quorum and pursuant
to the letter agreement, our sponsor, officers and directors have agreed to vote their founder shares and any public shares
purchased during or after our initial public offering (including in open market and privately negotiated transactions) in favor of
our initial business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock voted,
non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. As a result, in
addition to our founder shares, we would need only 11,293,313, or 39.3%, of the 28,750,000 public shares sold in our initial public
offering to be voted in favor of an initial business combination (assuming all outstanding shares are voted; or 1,882,220, or 6.5%,
assuming only the minimum number of shares representing a quorum are voted) in order to have our initial business combination
approved (in each case assuming the over-allotment option is not exercised and our sponsor, officers and directors do not purchase
any units in or after our initial public offering). We intend to give approximately 30 days (but not less than 10 days nor more than
60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial business
combination.
These quorum and voting thresholds,
and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial business combination.
Each public stockholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction.
Our amended and restated certificate of incorporation provides that we will only redeem our public shares so long as (after such redemption)
our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination
and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock”
rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business
combination. For example, the proposed initial business combination may require: (i) cash consideration to be paid to the target or its
owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash
to satisfy other conditions in accordance with the terms of the proposed initial business combination. In the event the aggregate cash
consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount
required to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of
cash available to us, we will not complete the initial business combination or redeem any shares, and all shares of Class A common stock
submitted for redemption will be returned to the holders thereof.
Limitation on Redemption upon Completion
of our Initial Business Combination if we Seek Stockholder Approval
Notwithstanding the foregoing,
if we seek stockholder 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 certificate of incorporation provides that a public stockholder,
together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group”
(as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights 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.” Such restriction shall
also be applicable to our affiliates. We believe this restriction will discourage stockholders from accumulating large blocks of shares,
and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed initial business combination
as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other
undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in our initial
public offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us or our management
at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no
more than 15% of the shares sold in our initial public offering without our prior consent, we believe we will limit the ability of a small
group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection
with an initial business combination with a target that requires as a closing condition that we have a minimum net worth or a certain
amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares)
for or against our initial business combination.
Tendering Stock Certificates in Connection
with Redemption Rights
We may require our public
stockholders 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 meeting held to approve a proposed initial business combination
by a date set forth in the proxy materials mailed to such holders or to deliver their shares to the transfer agent electronically using
the DWAC System, at the holder’s option. The proxy materials that we will furnish to holders of our public shares in connection
with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements.
Accordingly, a public stockholder would have from the time we send out our proxy materials until the date set forth in such proxy materials
to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short exercise period, it is advisable
for stockholders to use electronic delivery of their public shares.
There is a nominal cost associated
with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer
agent will typically charge the tendering broker $80.00 and it would be up to the broker whether to pass this cost on to the redeeming
holder. However, this fee would be incurred regardless of whether we require holders seeking to exercise redemption rights to tender their
shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must
be effectuated.
Any request to redeem such
shares, once made, may be withdrawn at any time up to the date set forth in the proxy materials. Furthermore, if a holder of a public
share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date
not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically).
It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed
promptly after the completion of our initial business combination.
If our initial business combination
is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be
entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates
delivered by public holders who elected to redeem their shares.
If our initial proposed initial
business combination is not completed, we may continue to try to complete an initial business combination with a different target until
April 19, 2023, which is extendable at our sponsor’s option to until October 19, 2023, as described herein.
Redemption of Public Shares and Liquidation
if no Initial Business Combination
Our amended and restated certificate
of incorporation provides that we will have only until April 19, 2023, which is extendable at our sponsor’s option to until July
19, 2023 or October 19, 2023, as described herein, to complete our initial business combination. If we are unable to complete our initial
business combination by April 19, 2023 (or by July 19, 2023 or October 19, 2023, as applicable), 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 earned
on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution
expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’
rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii)
as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors,
dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements
of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire
worthless if we fail to complete our initial business combination by April 19, 2023 (or by July 19, 2023 or October 19, 2023, as applicable).
Our sponsor, officers and
directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from
the trust account with respect to any founder shares held by them if we fail to complete our initial business combination by April 19,
2023, which is extendable at our sponsor’s option to until July 19, 2023 or October 19, 2023, as described herein. However, if our
sponsor, officers or directors acquire public shares in or after our initial public offering, 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 by April 19, 2023 (or
by July 19, 2023 or October 19, 2023, as applicable).
Our sponsor, officers and
directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate
of incorporation (i) to modify the substance or timing of our obligation to offer redemption rights in connection with any proposed initial
business combination or certain amendments to our charter prior thereto or to redeem 100% of our public shares if we do not complete our
initial business combination by April 19, 2023, which is extendable at our sponsor’s option to until July 19, 2023 or October 19,
2023, as described herein, or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business
combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock 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 earned on the funds held in the trust account and not previously released to us to pay our taxes divided by the number
of then outstanding public shares. However, we will only redeem our public shares so long as (after such redemption) our net tangible
assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment
of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules). If this optional
redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy the net tangible asset
requirement (described above), we would not proceed with the amendment or the related redemption of our public shares at such time.
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 approximately $2,200,000 of proceeds held outside the trust account, although we cannot assure you that there will be sufficient
funds for such purpose. We will depend on sufficient interest being earned on the proceeds held in the trust account to pay any tax obligations
we may owe. 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 on interest income earned on the trust
account balance, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those
costs and expenses.
If we were to expend all of
the net proceeds of our initial public offering and the sale of the private placement 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 stockholders upon our dissolution would be approximately $10.20. Such amount will be increased by an anticipated $0.10 per public share
pursuant to our sponsor’s depositing additional funds into the trust account for such three-month extension of our time to consummate
an initial business combination our sponsor elects to effectuate. 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 stockholders. We cannot assure you that
the actual per-share redemption amount received by stockholders will not be substantially less than $10.20. Under Section 281(b) of the
DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full,
as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining
assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay
or provide for all creditors’ claims.
Although we seek to have
all vendors, service providers (except for our independent registered public accounting firm), 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 stockholders, 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 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. Citrin, our independent registered public accounting
firm, and the underwriters of the offering have not executed agreements with us waiving such claims to the monies held in the trust
account.
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. 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 entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce
the amount of funds in the trust account to below the lesser of (i) $10.20 per public share and (ii) the actual amount per public share
held in the trust account as of the date of the liquidation of the trust account, if less than $10.20 per share due to reductions in the
value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective
target business who executed a waiver of any and all rights to the monies held in the trust account (regardless of whether such waiver
is enforceable) nor will it apply to any claims under our indemnity of the underwriters of our initial public offering against certain
liabilities, including liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification
obligations, nor have we 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. Therefore, we cannot assure you that our sponsor would be able to
satisfy those obligations. None of our officers or directors 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 (i) $10.20 per public share or (ii) such lesser amount per public share held in the trust account
as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount
of interest which may be withdrawn to pay taxes, 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 if, for example, the cost of such legal action is deemed by the
independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome
is not likely. We have not asked our sponsor to reserve for such indemnification obligations and we cannot assure you that our sponsor
would be able to satisfy those obligations. Accordingly, we cannot assure you that due to claims of creditors the actual value of the
per-share redemption price will not be less than $10.20 per public share.
We 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
(except for our independent registered public accounting firm), 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 may have access to up to approximately $2,200,000 from the proceeds of our initial
public offering 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, stockholders who received funds from our trust account could be liable for claims
made by creditors.
Under the DGCL, stockholders
may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution.
The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event
we do not complete our initial business combination by April 19, 2023, which is extendable at our sponsor’s option to until July
19, 2023 or October 19, 2023, as described herein, may be considered a liquidating distribution under Delaware law. If the corporation
complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims
against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period
during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions
are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s
pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the
third anniversary of the dissolution.
Furthermore, if the pro
rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do
not complete our initial business combination by April 19, 2023, which is extendable at our sponsor’s option to until July 19,
2023 or October 19, 2023, as described herein, from the closing of our initial public offering, is not considered a liquidating
distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of
legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of
the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution,
instead of three years, as in the case of a liquidating distribution. If we are unable to complete our initial business combination
by April 19, 2023, which is extendable at our sponsor’s option to until July 19, 2023 or October 19, 2023, as described
herein, 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 earned on the funds held in the trust account and not previously released to
us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public
shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to
receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate,
subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other
applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following April 19, 2023
(or July 19, 2023 or October 19, 2023, as applicable) and, therefore, we do not intend to comply with those procedures. As such, our
stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any
liability of our stockholders may extend well beyond the third anniversary of such date.
Because we will not be complying
with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for
our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent 10 years. However,
because we are a blank check company, rather than an operating company, and our operations are limited to searching for prospective target
businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective
target businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we seek to have all vendors,
service providers (except for our independent registered public accounting firm), 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. As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that
any claim that would result in any liability extending to the trust account is remote. Further, our sponsor may be liable only to the
extent necessary to ensure that the amounts in the trust account are not reduced below (i) $10.20 per public share or (ii) such lesser
amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of
the trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not be liable as to any claims under our
indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act.
In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent
of any liability for such third-party claims.
If 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 stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to
return $10.20 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition
is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor
and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy
court could seek to recover some or all amounts received by our stockholders. Furthermore, our board of directors may be viewed as having
breached its fiduciary duty to our creditors and/or may have acted in bad faith, thereby exposing itself and our company to claims of
punitive damages, by paying public stockholders 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 stockholders will
be entitled to receive funds from the trust account only upon the earlier to occur of: (i) the completion of our initial business combination,
(ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend any provisions of our amended
and restated certificate of incorporation (A) to modify the substance or timing of our obligation to offer redemption rights in connection
with any proposed initial business combination or certain amendments to our charter prior thereto or to redeem 100% of our public shares
if we do not complete our initial business combination by April 19, 2023, which is extendable at our sponsor’s option to until July
19, 2023 or October 19, 2023, as described herein, or (B) with respect to any other provision relating to stockholders’ rights or
pre-initial business combination activity, and (iii) the redemption of all of our public shares if we are unable to complete our business
combination by April 19, 2023, which is extendable at our sponsor’s option to until July 19, 2023 or October 19, 2023, as described
herein, subject to applicable law. Stockholders who do not exercise their redemption rights in connection with an amendment to our certificate
of incorporation would still be able to exercise their redemption rights in connection with a subsequent business combination. In no other
circumstances will a stockholder have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval
in connection with our initial business combination, a stockholder’s voting in connection with the initial business combination
alone will not result in a stockholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such
stockholder must have also exercised its redemption rights as described above. These provisions of our amended and restated certificate
of incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with a stockholder vote.
Competition
In identifying, evaluating
and selecting a target business for our initial business combination, we may encounter competition from other entities having a business
objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses
seeking strategic business combinations. Many of these entities are well established and have extensive experience identifying and effecting
business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human
and other resources than we do. Our ability to acquire larger target businesses will be limited by our available financial resources.
This inherent limitation gives others an advantage in pursuing the initial business combination of a target business. Furthermore, our
obligation to pay cash in connection with our public stockholders who exercise their redemption rights may reduce the resources available
to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be
viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating
an initial business combination.
Human Capital Management
We
currently have three officers. These individuals 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
they devote in any time period varies based on the stage of the initial business combination process we are in. We do not intend to have
any full-time employees prior to the completion of our initial business combination.
Periodic Reporting and Financial Information
We have registered our units,
Class A common stock 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 will contain financial
statements audited and reported on by our independent registered public accountants.
We will provide stockholders
with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials
sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared
in accordance with, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required
to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential targets
we may conduct an initial business combination with because some targets may be unable to provide such statements in time for us to disclose
such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.
We cannot assure you that any particular target business identified by us as a potential business combination candidate will have financial
statements prepared in accordance with GAAP or that the potential target business will be able to prepare its financial statements in
accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the
proposed target business. 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 company 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 business combination. We filed a Registration Statement
on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we are subject to the
rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or
other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
We 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 shares of Class A common stock that are held by non-affiliates exceeds $700 million
as of the prior December 31, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior
three-year period.
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 shares held by non-affiliates exceeds $250
million as of the prior December 31, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market
value of our shares held by non-affiliates exceeds $700 million as of the prior December 31.