References in this report
to “we,” “us” or the “Company” refer to Prospector Capital Corp. References to our “management”
or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Prospector
Sponsor LLC, a Cayman Islands limited liability company. References to our “initial shareholders” refer to the holders of
founder shares.
ITEM 1. BUSINESS.
Introduction
We are a blank check company
incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase,
reorganization or similar business combination with one or more businesses. 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 a business
combination target in any business or industry, we intend to focus our search for an initial business combination on companies with advanced
and highly differentiated solutions for the technology sector. We have identified several areas of interest including advanced communications,
applications and services (such as 5G), cloud and edge computing, artificial intelligence (AI), machine learning (ML), augmented and virtual
reality (AR / VR), disruptive transport technologies and computer vision. Our interests include, but are not limited to, software and
hardware platforms, semiconductors and related technologies and strong intellectual property.
We believe that the current
backdrop for investing in technology presents a compelling opportunity set for our management team. The proliferation of data, combined
with the continued advancement of enabling technologies such as AI, 5G, and cloud and edge computing that can greatly increase the value
and usefulness of such data, are opening up new frontiers and significant growth opportunities for technology providers. For example,
we believe 5G represents a ubiquitous wireless fabric that will enable a breadth of new connected and intelligent products, applications
and services across industries. IHS estimates 5G will enable more than $13 trillion in global economic value by 2035 as use cases such
as smart factories, smart warehouses and logistics, autonomous vehicles, smart cities, drones, and connected health are enabled through
high speed, low latency, and data rich connectivity. In addition, IDC estimates that the AI, cloud and edge computing markets will increase
to $300 billion, $1 trillion and $251 billion, respectively, by 2024. At the same time, these advances present corresponding challenges,
such as the management of increasingly complex workloads, the need to move and to access data efficiently, performance and power tradeoffs
and the need for cost effective solutions. We expect that these dynamics will create numerous opportunities for emerging market participants
across the technology stack.
Given our management team’s
vast technology and investing experience, we believe we are well-suited to identify and execute an initial business combination with an
attractive technology target that can benefit from our capital, operational expertise, and relationships to accelerate the commercialization
and growth of innovative technologies.
On January 12, 2021, we consummated
our initial public offering (“IPO” or the “Public Offering”) of 32,500,000 units (the “Units”), including
the issuance of 2,500,000 Units as a result of the underwriters’ exercise in part of their option to purchase additional Units.
Each Unit consists of one Class A ordinary share of the Company, par value $0.0001 per share (“Class A ordinary shares”),
and one-third of one redeemable warrant of the Company (“Warrant”), with each whole 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 $325,000,000.
On September 28, 2020, pursuant
to an agreement by and between the Company and Prospector Sponsor LLC (the “Sponsor”), our Sponsor purchased the founder shares
and private placement warrants for $10,075,000 (the “Securities Purchase Agreement”). On December 16, 2020, pursuant to an
amendment to the Securities Purchase Agreement and Return Agreement (the “SPA Amendment”), our Sponsor returned certain Class
B ordinary shares and private placement warrants to us for $2,300,000. On January 7, 2021, we effected a 1:1.2 share capitalization of
our Class B ordinary shares. After the closing of the IPO, our Sponsor held an aggregate of 8,125,000 founder shares. Prior thereto, the
company had no assets, tangible or intangible. The number of founder shares outstanding was determined based on the expectation that the
founder shares would represent 20% of the outstanding shares after the IPO.
Simultaneously with the closing
of the IPO, pursuant to a private placement warrants purchase agreement (the “Private Placement Warrants Purchase Agreement”),
the Company completed the private sale of an aggregate of 500,000 private placement warrants to the Sponsor at a purchase price of $1.50
per private placement warrant, generating gross proceeds to the Company of $750,000 (the “Pricing Private Placement”). The
private placement warrants are identical to the Warrants sold in the IPO, except that the private placement warrants, so long as they
are held by the Sponsor or its permitted transferees, (i) are not redeemable by the Company except as set forth in the Warrant Agreement,
(ii) may not (including the Class A ordinary shares issuable upon exercise of such private placement warrants), subject to certain limited
exceptions, be transferred, assigned or sold by such holders until 30 days after the completion of the Company’s initial business
combination, (iii) may be exercised by the holders on a cashless basis and (iv) will be entitled to registration rights. No underwriting
discounts or commissions were paid with respect to such sales. The Pricing Private Placement was made pursuant to the exemption from registration
contained in Section 4(a)(2) of the Securities Act of 1933, as amended.
A total of $325,000,000, comprised of $318,500,000 of the proceeds from
the IPO and $6,500,000 of the proceeds of sales of the private placement warrants to the Sponsor, including the Pricing Private Placement,
was placed in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A. maintained by Continental Stock Transfer & Trust Company,
acting as trustee. Except with respect to interest earned on the funds held in the trust account that may be released to the Company to
pay its taxes, the funds held in the trust account will not be released from the trust account until the earliest of (i) the completion
of the Company’s initial business combination, (ii) the redemption of any Class A ordinary shares included in the Units sold in
the IPO (“public shares”) properly tendered in connection with a shareholder vote to amend the Company’s Amended Charter
to modify the substance or timing of the Company’s obligation to allow redemption in connection with its initial business combination
or to redeem 100% of the public shares if the Company does not complete its initial business combination by December 31, 2023 or with
respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity and (iii)
the redemption of the public shares if the Company is unable to complete an initial business combination by December 31, 2023, subject
to applicable law.
After the payment of underwriting discounts and commissions paid and approximately
$516,778 in expenses relating to the Public Offering, $1,041,662 of the net proceeds of the Public Offering and Pricing Private Placement
was not deposited into the Trust Account and was retained by us for working capital purposes. The net proceeds deposited into the Trust
Account remain on deposit in the Trust Account earning interest. Immediately following the IPO there was $325,000,000 in investments and
cash held in the Trust Account and $1,041,662 of cash held outside the Trust Account available for working capital purposes. As of December
31, 2022, none of the funds had been withdrawn from the Trust Account to fund the Company’s working capital expenses.
Extension
The Company had until January
12, 2023 to consummate an initial business combination. On January 5, 2023, the Company held an extraordinary general meeting in lieu
of the annual general meeting of shareholders. In this meeting the shareholders approved amendments to the Company’s Amended and
Restated Memorandum and Articles of Association to extend the date by which the Company must complete an initial business combination
from January 12, 2023 to December 31, 2023. In connection with this meeting, shareholders holding an aggregate of 30,305,944 shares of
the Company’s Class A ordinary shares exercised their right to redeem their shares for $10.15 per share of the funds held in the
Company’s trust account, leaving approximately $22.3 million in the trust account after such redemption.
Management Team
The members of our management
team have deep expertise enabling technological innovation, operating multi-national businesses, and executing large-scale commercial
agreements and transactions. They have been at the center of the technology and semiconductor sectors building extensive networks of relationships
with many of the largest technology developers and suppliers around the globe. Our management team includes proven leaders with a diverse
set of experiences and complementary skills as senior executives, investors, and entrepreneurs. We believe our management team offers
extensive experience in growing and operating companies, a deep network of contacts in the technology sector, and expertise that can create
significant value for a target business. Our management team is led by Derek Aberle (Co-Founder, Chief Executive Officer and a director),
Nick Stone (Co-Founder, Chief Financial Officer and a director) and Steve Altman (Co-Founder and chairman director nominee). In addition,
Mike Stone is a Co-Founder of, and investor in, the company.
Derek Aberle is a seasoned
executive with a proven track record of success at large multi-national organizations. Mr. Aberle currently serves as Vice Chairman and
director of XCOM, a company he co-founded in July 2018 with former Chief Executive Officer and Executive Chairman of Qualcomm, Paul Jacobs.
He also served as President and COO of XCOM from July 2018 to November 2020. XCOM Labs includes a team of world class wireless systems
engineers and professionals that develops advanced wireless technology solutions, including that enable high-performance 5G use cases.
Prior to XCOM, Mr. Aberle
spent 17 years at Qualcomm, including as President of Qualcomm from March 2014 to January 2018. He was an officer and member of Qualcomm’s
Executive Committee from 2008 until January 2018. As President and Group President, he led many of Qualcomm’s growth strategies
and oversaw both Qualcomm’s earlier stage and mature businesses, including the semiconductor (QCT), technology and IP licensing
(QTL), data center, display, wireless charging, augmented reality and healthcare businesses. While Mr. Aberle was leading QTL, annual
revenue more than doubled from approximately $3.6 billion to approximately $7.9 billion in 2015 and accounted for approximately two-thirds
of Qualcomm’s earnings before taxes during that period. Prior to Qualcomm, Mr. Aberle was an attorney with the international law
firms Pillsbury Winthrop and Heller Ehrman.
Steve Altman is an experienced
public company executive officer, board member, and investor with deep expertise in global technology businesses. He spent 24 years at
Qualcomm in numerous leadership roles including President and Vice Chairman. Mr. Altman was also a member of Qualcomm’s Executive
Committee for 15 years, providing direction and guidance on key initiatives across all areas of the business, as well as on overall company
vision and strategy. He is considered the chief architect of Qualcomm’s strategy for licensing its broad intellectual property portfolio
for wireless communications. When Mr. Altman started with Qualcomm it had $32 million in annual revenue and approximately 400 employees
and when he retired it had over $20 billion in annual revenue and over 30,000 employees. Mr. Altman currently serves as the Managing Member
of AJL, an investment vehicle he founded in 2014, and as a Board Member of Dexcom, a medical device S&P 500 public company since 2013.
He serves as a board member for a variety of private company boards including Brain, Amionx, CourseKey, Yembo and Viacyte.
Nick Stone is a partner at
FS Investors, a San Diego-based private investment entity with long term capital and a range of investments across stages and asset classes.
Prior to joining FS Investors in June 2011, Mr. N. Stone served as a Vice President at TPG, one of the world’s largest private equity
funds. While at TPG, he was involved with investments totaling over $20 billion of revenue and approximately $2.5 billion of equity capital.
Prior to joining TPG, Mr. N. Stone was an investment professional at KKR focusing on investments in the healthcare space. Prior to that,
he was an analyst at Morgan Stanley, focusing on the Technology sector.
Mike Stone is an accomplished
investor who has played a role in shaping the growth equity landscape throughout his career. He currently serves as the Co-Managing Partner
of TPG Growth, a private equity fund entity, the Chief Investment Officer of The Rise Funds, a global, evidence-based impact fund entity,
and as a Partner of TPG. Together, TPG Growth and The Rise Funds manage in excess of $10 billion in assets. He also is the Founder and
Managing Member of FS Investors, his private family office investment entity. He was also the Founder and Chairman of J.H. Whitney Investment
Management, LLC, where he served from 2002-2008, and he previously served as Managing Partner and President of J.H. Whitney & Co.,
a diversified manager of alternative investment assets and the country’s first venture capital firm, where he served from 1989 to
2007. Prior to that, he was a management consultant with Bain.
In his roles at FS Investors,
TPG, Rise, and Whitney, Mr. M. Stone has overseen or been involved with the completion of over 200 investments, cumulatively representing
in excess of $12 billion dollars of private equity capital across healthcare, technology, consumer and retail/tourism, financial services,
and communications. Nick Stone and Mike Stone are not related.
With respect to the above,
past experience or performance of our management team and the businesses with which they have been associated is not a guarantee of either
(i) our ability to successfully identify and consummate a business combination or (ii) success with respect to any business combination
that we may consummate. You should not rely on the historical record of our management team or the businesses with which they have been
associated as indicative of our future performance. No member of our management team has any experience in operating special purpose acquisition
companies.
Business Strategy
Our business strategy is to
identify, acquire and maximize the value of a company in the technology sector that complements the experience of our management team
and can benefit from its operational expertise.
We have a proven track record
in the technology industry as operators, executives, investors, and board members and we believe that we can partner with a promising
private company through our initial business combination and provide support to build and grow a category-defining business. We will focus
our efforts on opportunities where we feel we have a competitive advantage and are best situated to support the business after completion
of the initial business combination. Our management team has the following tools to execute a successful business combination and maximize
value creation:
Operational expertise:
Our management team has proven experience leading and growing both large multi-national and early stage businesses across a variety of
technology and product areas with different business models. Our management team is committed to providing support, guidance and, where
necessary, additional management talent to assist the target company in executing its value creation strategy and achieving its vision.
Experience identifying
and evaluating technology trends: Our team has experience identifying growth opportunities in the technology sector both from
an operating and investment perspective. Our team has deployed billions of dollars of capital through financial investments and has overseen
early-stage business initiatives in emerging technologies.
Deep industry connections:
Our management team has been at the center of the semiconductor and technology sectors building extensive networks of relationships with
many of the largest partners, customers, suppliers, and investors globally.
Commercialization expertise:
Our management team has experience developing and optimizing commercialization strategies. They have extensive experience structuring
and negotiating major, often multi-billion dollar, commercial agreements, developing commercialization models, and driving significant
revenue growth.
Public company experience:
Our management team has extensive experience serving as executives and board members at publicly traded companies as well as extensive
experience interacting with investors, financial analysts and the media. Our management team has a deep understanding of capital markets,
which we believe is an important aspect of a special purpose acquisition company to ensure we effectively finance and structure the business
combination transaction.
Transaction capabilities:
Our management team has significant investment and transaction experience across a range of stages and asset classes. They have been involved
with more than 200 investments representing approximately $15 billion of invested capital.
We plan to utilize the network
and industry experience of our management team in seeking an initial business combination and executing our acquisition strategy. Over
the course of their careers, the members of our management team and their affiliates have developed a broad network of relationships in
technology that we believe will further complement our sourcing pipeline of acquisition opportunities. Our management team will also leverage
our association with FS Investors. The team at FS Investors has extensive experience in identifying, evaluating, negotiating and completing
the types of transactions that we plan to pursue for our initial business combination.
Following the closing of the
IPO, we have communicated with our management team’s network of relationships, which includes private equity firms, venture capitalists,
and entrepreneurs, to articulate the parameters for our search for a target company and begun the process of pursuing and reviewing potential
opportunities.
Acquisition Strategy
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.
Focus: We intend
to seek businesses in the technology industry. We have an accomplished track record of founding, operating, and investing in this industry.
We believe our management team’s expertise will be paramount in identifying and assessing initial business combination candidates
and maximizing value creation for investors.
Stage: We intend
to seek companies that are on a promising growth path or approaching an inflection point, such as those requiring additional management
expertise, scaling a product, or entering a new market.
Management:
We intend to seek businesses with strong and accomplished management teams capable of scaling to operate successfully on a global basis
with the support of our team.
Differentiation:
We intend to seek companies that have highly differentiated technology, strong innovative cultures, or other competitive advantages such
as strong intellectual property portfolios.
Strategic Opportunity:
We intend to target companies which have significant embedded or underexploited expansion opportunities that provide potential for acceleration
through a partnership with us.
Public-company readiness:
We intend to seek businesses that are ready to operate in the scrutiny of public markets, with the requisite compliance, financial controls
and reporting processes in place.
Market Acceptance:
We intend to seek businesses that will likely be well received by public investors and are expected to have good access to the public
capital markets.
Risk-adjusted returns:
We intend to seek businesses that will offer attractive risk-adjusted equity returns for our shareholders with potential upside from growth
in the target business through value creation initiatives.
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 Form 10-K, would be in the form of proxy solicitation or tender offer materials, as applicable, that we would file with the SEC.
Initial Business Combination
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).
We refer to this as the 80% of net assets test. If our board of directors is not able to independently determine the fair market value
of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA
or from an independent valuation or accounting firm, with respect to the satisfaction of such criteria. We do not currently intend to
purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance
that will be the case.
We anticipate structuring
our initial business combination so that the post transaction company in which our public shareholders own shares will own or acquire
100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination
such 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 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. 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 would
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 issued and 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 the 80% of net assets test described above. If the business combination involves more than one target business,
the 80% of net assets test will be based on the aggregate value of all of the transactions.
We are not prohibited from
pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors, or completing the
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 an initial business combination with a target that is affiliated with our sponsor, officers or directors, we, or a committee
of independent directors, would obtain an opinion from an independent investment banking firm that is a member of FINRA or a valuation
or appraisal firm that such an initial business combination is fair to our company from a financial point of view. Our amended and restated
memorandum and articles of association provides that a target will not be deemed an affiliate solely by virtue of ownership by our sponsor
or its affiliates, or any of their or our executive officers or directors, of less than 10% of its ordinary shares, individually or in
the aggregate.
Members of our management
team and our independent directors will directly or indirectly own founder shares and/or private placement warrants following the IPO
and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with
which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with
respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included
by a target business as a condition to any agreement with respect to our initial business combination.
Each of our officers and directors
presently has, and any of them in the future may have additional, fiduciary or contractual obligations to at least one other entity 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 which is suitable for an entity to which he or she
has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present
such business combination opportunity to such other entity, subject to their fiduciary duties under Cayman Islands law. Our amended and
restated memorandum and articles of association provides 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. 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.
In addition, our sponsor and
our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business
or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments
may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such potential
conflicts would materially affect our ability to complete our initial business combination.
We have previously 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.
Status as a Public Company
We believe 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 the traditional initial public offering through a merger or other business combination with us. In a business combination
transaction with us, the owners of the target business may, for example, exchange their shares of stock or shares in the target business
for our Class A ordinary shares (or shares of a new holding company) or for a combination of our Class A ordinary shares and cash, allowing
us to tailor the consideration to the specific needs of the sellers. 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,
market and other uncertainties 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 a business combination with us.
Furthermore, once a proposed
business combination is completed, the target business will have effectively become public, whereas an initial public offering is always
subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay or prevent
the offering from occurring or could have negative valuation consequences. Following an initial business combination, we believe the target
business would then have greater access to capital, an additional means of providing management incentives consistent with shareholders’
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 will 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 shareholder approval of any
proposed initial business combination, negatively.
We are an “emerging
growth company,” as defined in the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of
the fiscal year (a) following the fifth anniversary of the completion of the IPO, (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 ordinary
shares that is held by non-affiliates exceeds $700 million as of the prior June 30th, 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 Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced
disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller
reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds
$250 million as of the prior June 30th, 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 prior June 30th.
Financial Position
With funds available for a business combination in the amount of $22,270,755
(net of January 5, 2023 redemption, assuming no further redemption), we offer a target business a variety of options, such as creating
a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance
sheet by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities,
or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration
to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third party financing and
there can be no assurance it will be available to us.
Effecting Our Initial Business Combination
General
We are not presently engaged
in, and we will not engage in, any operations for an indefinite period of time following the IPO. We intend to effectuate our initial
business combination using cash from the proceeds of the IPO and the consummation of the Securities Purchase Agreement, the SPA Amendment
and the Private Placement Warrants Purchase Agreement, 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 the IPO or
otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, other securities
issuances, 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 ordinary shares, we may use 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 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 initial business
combination target in any industry, we intend to focus our search on companies with advanced and highly differentiated solutions for the
technology sector. Accordingly, there is no current basis for investors in the IPO to evaluate the possible merits or risks of the target
business with which we may ultimately complete our initial business combination. Although our management will assess the risks inherent
in a particular target business with which we may combine, we cannot assure you that this assessment will result 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 affect a target business.
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 intend to target businesses with enterprise values that are greater than we could acquire with the net proceeds
of the IPO and the consummation of the Securities Purchase Agreement, the SPA Amendment and the Private Placement Warrants Purchase Agreement,
and, as a result, if the cash portion of the purchase price exceeds the amount available from the trust account, net of amounts needed
to satisfy any redemptions by public shareholders, we may 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 shareholder approval of such financing. There is no limitation on our ability
to raise funds through the issuance of equity or equity-linked securities or through loans, advances or other indebtedness in connection
with our initial business combination, including pursuant to forward purchase agreements or backstop agreements we may enter into following
consummation of the IPO. 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. None of our sponsors, officers, directors or shareholders is required
to provide any financing to us in connection with or after our initial business combination.
Sources of Target Businesses
We anticipate that target
business candidates will be brought to our attention from various unaffiliated sources, including investment bankers and private investment
funds. 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 in which they think we may be interested on an unsolicited basis,
since many of these sources will have read this Annual Report on Form 10-K and know what types of businesses we are targeting. Our officers
and directors, as well as their affiliates, may also bring to our attention target business candidates of which they become aware 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 track record and business relationships of our officers and directors. 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 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 a finder’s fee 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 they
are affiliated, be paid any finder’s fee, consulting fee or other compensation by the company prior to, or 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).
In addition, we pay our sponsor $10,000 per month for office space, utilities, secretarial and administrative support services provided
to members of our management team. We may also elect to make payment of customary fees to members of our board of directors for director
service. Any such payments prior to our initial business combination will be made from funds held outside the trust account. Other than
the foregoing, there will be no finder’s fees, reimbursement, consulting fee, monies in respect of any payment of a loan or other
compensation paid by us to our sponsor, officers or directors, or any affiliate of our sponsor or officers prior to, or in connection
with any services rendered in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction
that it is).
We are not prohibited from
pursuing an initial business combination with a business combination target that is affiliated with our sponsor, officers or directors,
or from completing the 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 a business combination target that is affiliated with our sponsor,
officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm
which is a member of FINRA or a valuation or appraisal firm, that such an initial business combination is fair to our company from a financial
point of view. We are not required to obtain such an opinion in any other context. Our amended and restated memorandum and articles of
association provide that a target will not be deemed an affiliate solely by virtue of ownership by our sponsor or its affiliates, or any
of their or our executive officers or directors, of less than 10% of its ordinary shares, individually or in the aggregate.
Evaluation of a Target Business and Structuring
of Our Initial Business Combination
In evaluating a prospective
target business, we expect to conduct a due diligence review which may encompass, among other things, meetings with incumbent management
and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as applicable, as well as a review of
financial, operational, legal and other information which will be made available to us. If we determine to move forward with a particular
target, we will proceed to structure and negotiate the terms of the business combination transaction.
The time required to select
and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process,
are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of,
and negotiation with, a prospective target business with which our initial business combination is not ultimately completed will result
in our incurring losses and will reduce the funds we can use to complete another business combination. The company will not pay any consulting
fees to members of our management team, or any of their respective affiliates, for services rendered to or in connection with our initial
business combination.
Lack of Business Diversification
For an indefinite period of
time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance
of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or
several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in
a single line of business. By completing our initial business combination with only a single entity, our lack of diversification may:
| ● | 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 intend to closely
scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination
with that business, our assessment of the target business’s management may not prove to be correct. In addition, the future management
may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of
our management team, if any, in the target business cannot presently be stated with any certainty. 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 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 additional managers will have the requisite skills, knowledge or experience
necessary to enhance the incumbent management.
Shareholders May Not Have the Ability to Approve
Our Initial Business Combination
We may conduct redemptions
without a shareholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our amended and restated memorandum
and articles of association. However, we will seek shareholder approval if it is required by law or applicable stock exchange rule, or
we may decide to seek shareholder approval for business or other reasons.
Under Nasdaq’s listing
rules, shareholder approval would be required for our initial business combination if, for example:
| ● | We issue ordinary shares that
will be equal to or in excess of 20% of the number of our ordinary shares then outstanding (other than in a public offering); |
| ● | Any of our directors, officers
or substantial shareholders (as defined by Nasdaq rules) has a 5% or greater interest earned on the trust account (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 ordinary shares could result in an increase in outstanding ordinary shares or voting power of 5% or more; or |
| ● | The issuance or potential issuance
of ordinary shares will result in our undergoing a change of control. |
The decision as to whether
we will seek shareholder approval of a proposed business combination in those instances in which shareholder approval is not required
by applicable law or stock exchange listing requirements will be made by us, solely in our discretion, and will be based on business and
legal reasons, which include a variety of factors, including, but not limited to: (i) the timing of the transaction, including in the
event we determine shareholder approval would require additional time and there is either not enough time to seek shareholder approval
or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company; (ii) the
expected cost of holding a shareholder vote; (iii) the risk that the shareholders would fail to approve the proposed business combination;
(iv) other time and budget constraints of the company; and (v) additional legal complexities of a proposed business combination that would
be time-consuming and burdensome to present to shareholders.
Permitted Purchases of Our Securities
If we seek shareholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our sponsor, initial shareholders, directors, officers, advisors or their affiliates may purchase shares or Warrants
in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination.
There is no limit on the number of shares our initial shareholders, 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. None of the funds in the trust
account will be used to purchase shares or Warrants in such transactions. If they engage in such transactions, they will not make any
such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are
prohibited by Regulation M under the Exchange Act.
In the event that our sponsor,
directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have
already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem
their shares. 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.
The purpose of any such purchases
of shares could be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining shareholder
approval of the business combination or (ii) 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 Warrants could be to reduce the number of 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 Class A ordinary shares 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
and/or their affiliates anticipate that they may identify the shareholders with whom our initial shareholders, officers, directors or
their affiliates may pursue privately negotiated purchases by either the shareholders contacting us directly or by our receipt of redemption
requests submitted by shareholders (in the case of Class A ordinary shares) 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 shareholders who have expressed their election to redeem their shares
for a pro rata share of the trust account or vote against our initial business combination, whether or not such shareholder has already
submitted a proxy with respect to our initial business combination but only if such shares have not already been voted at the general
meeting related to our initial business combination. Our sponsor, officers, directors, advisors or any of their affiliates will select
which shareholders to purchase shares from based on a negotiated price and number of shares and any other factors that they may deem relevant,
and will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.
Our sponsor, officers, directors and/or their affiliates will not make purchases of shares 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 purchasers are subject to such reporting requirements.
Redemption Rights for Public Shareholders upon
Completion of Our Initial Business Combination
We will provide our public
shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business
combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of
two business days prior to the consummation of the initial business combination, including interest 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
and on the conditions described herein. The amount in the trust account will initially be $10.00 per public share. The per share amount
we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will
pay to the underwriters. 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 their founder shares and any public shares they may hold in connection with the
completion of our initial business combination.
Limitations on Redemptions
Our amended and restated memorandum
and articles of association provides that in no event will we redeem our public shares in an amount that would cause our net tangible
assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for (i)
cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii)
the retention of cash to satisfy other conditions. 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 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 Class A ordinary shares submitted for redemption will be returned to the holders thereof. We
may, however, raise funds through the issuance of equity-linked securities or through loans, advances or other indebtedness in connection
with our initial business combination, including pursuant to forward purchase agreements or backstop arrangements we may enter into following
the closing of the IPO, in order to, among other reasons, satisfy such net tangible assets or minimum cash requirements.
Manner of Conducting Redemptions
We will provide our public
shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business
combination either (i) in connection with a general meeting called to approve the business combination or (ii) without a shareholder vote
by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination or conduct
a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction
and whether the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing
requirement or whether we were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder
approval under SEC rules), as described above under the heading “Shareholders May Not Have the Ability to Approve Our Initial Business
Combination.” Asset acquisitions and share purchases would not typically require shareholder approval while direct mergers with
our company where we do not survive and any transactions where we issue more than 20% of our issued and outstanding ordinary shares or
seek to amend our amended and restated memorandum and articles of association would require shareholder approval. So long as we obtain
and maintain a listing for our securities on Nasdaq, we will be required to comply with Nasdaq’s shareholder approval rules.
The requirement that we provide
our public shareholders with the opportunity to redeem their public shares by one of the two methods listed above will be contained in
provisions of our amended and restated memorandum and articles of association and applies whether or not we maintain our registration
under the Exchange Act or our listing on Nasdaq. Such provisions may be amended if approved by holders of 65% of our ordinary shares entitled
to vote thereon, so long as we offer redemption in connection with such amendment.
If we provide our public shareholders
with the opportunity to redeem their public shares in connection with a general meeting, we will, pursuant to our amended and restated
memorandum and articles of association:
| ● | 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
shareholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our
public shareholders with the redemption rights described above upon completion of the initial business combination.
If we seek shareholder approval,
we will complete our initial business combination only if we receive an ordinary resolution under Cayman Islands law, which requires the
affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. A quorum for such meeting
will be present if the holders of a majority of issued and outstanding shares entitled to vote at the meeting are represented in person
or by proxy. Our sponsor, officers and directors will count toward this quorum and, pursuant to the letter agreement, our sponsor, officers
and directors have agreed to vote their founder shares, private placement shares and any public shares purchased during or after the IPO
(including in open market and privately-negotiated transactions) in favor of our initial business combination. For purposes of seeking
approval of an ordinary resolution, 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 initial shareholders’ founder shares, we do not need any of our public shares sold in
the IPO to be voted in favor of an initial business combination in order to have our initial business combination approved. These quorum
and voting thresholds, and the voting agreement of our sponsor, officers and directors, may make it more likely that we will consummate
our initial business combination. Each public shareholder may elect to redeem their public shares irrespective of whether they vote for
or against the proposed transaction or whether they were a public shareholder on the record date for the general meeting held to approve
the proposed transaction.
If a shareholder vote is not
required and we do not decide to hold a shareholder vote for business or other legal reasons, we will:
| ● | 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. |
In the event we conduct redemptions
pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a)
under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer
period. In addition, the tender offer will be conditioned on public shareholders not tendering more than the number of public shares we
are permitted to redeem. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer
and not complete the initial business combination.
Upon the public announcement
of our initial business combination, if we elect to conduct redemption pursuant to the tender offer rules, we or our sponsor will terminate
any plan established in accordance with Rule 10b5-1 to purchase our Class A ordinary shares in the open market, in order to comply with
Rule 14e-5 under the Exchange Act.
We intend to require our public
shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”
to, at the holder’s option, either deliver their share certificates to our transfer agent or deliver their shares to our transfer
agent electronically using the Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system, prior to the date set forth
in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date may be up to two business days
prior to the scheduled vote on the proposal to approve the initial business combination. In addition, if we conduct redemptions in connection
with a shareholder vote, we intend to require a public shareholder seeking redemption of its public shares to also submit a written request
for redemption to our transfer agent two business days prior to the scheduled vote in which the name of the beneficial owner of such shares
is included. The proxy materials or tender offer documents, as applicable, that we will furnish to holders of our public shares in connection
with our initial business combination will indicate whether we are requiring public shareholders to satisfy such delivery requirements.
We believe that this will allow our transfer agent to efficiently process any redemptions without the need for further communication or
action from the redeeming public shareholders, which could delay redemptions and result in additional administrative cost. If the proposed
initial business combination is not approved and we continue to search for a target company, we will promptly return any certificates
or shares delivered by public shareholders who elected to redeem their shares.
Our amended and restated memorandum
and articles of association provides that in no event will we redeem our public shares in an amount that would cause our net tangible
assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for (i)
cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii)
the retention of cash to satisfy other conditions. 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 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 Class A ordinary shares submitted for redemption will be returned to the holders thereof. We
may, however, raise funds through the issuance of equity or equity-linked securities or through loans, advances or other indebtedness
in connection with our initial business combination, including pursuant to forward purchase agreements or backstop arrangements we may
enter into following consummation of the IPO, in order to, among other reasons, satisfy such net tangible assets or minimum cash requirements.
Limitation on Redemption Upon Completion of
Our Initial Business Combination If We Seek Shareholder Approval
If we seek shareholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our amended and restated memorandum and articles of association provides that a public shareholder, together with
any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as
defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to Excess Shares without
our prior consent. We believe this restriction will discourage shareholders from accumulating large blocks of shares, and subsequent attempts
by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us
or our 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 shareholder holding more than an aggregate of 15% of the shares sold in the IPO could threaten to exercise its
redemption rights if such holder’s shares are not purchased by us, our sponsor or our management at a premium to the then-current
market price or on other undesirable terms. By limiting our shareholders’ ability to redeem no more than 15% of the shares sold
in the IPO without our prior consent, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to
block our ability to complete our initial business combination, particularly in connection with a business combination with a target that
requires as a closing condition that we have a minimum net worth or a certain amount of cash.
However, we would not be restricting
our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Redemption of Public Shares and Liquidation
If No Initial Business Combination
Our amended and restated memorandum
and articles of association provides that we will have until December 31, 2023 to complete our initial business combination. If we are
unable to complete our initial business combination by December 31, 2023, 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 (less taxes payable and 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 shareholders’ rights as shareholders (including the right to receive
further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval
of our remaining shareholders and our board of directors, liquidate and dissolve, subject, in the case of clauses (ii) and (iii), to our
obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of 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 December 31, 2023.
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 special purpose acquisition companies, private equity groups and leveraged buyout funds, public
companies and operating businesses seeking strategic acquisitions. 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 similar or
greater financial, technical, human and other resources than us. 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 acquisition of a target business. Furthermore,
our obligation to pay cash in connection with our public shareholders who exercise their redemption rights may reduce the resources available
to us for our initial business combination and our issued and 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.
Employees
We currently have two officers:
Derek Aberle and Nick Stone. These individuals are not obligated to devote any specific number of hours to our matters but they intend
to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount
of time they will devote in any time period will vary based on whether a target business has been selected for our initial business combination
and the stage of the 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.
Available Information
We are required to file Annual
Reports on Form 10-K and Quarterly Reports on Form 10-Q with the SEC on a regular basis, and are required to disclose certain material
events (e.g., changes in corporate control, acquisitions or dispositions of a significant amount of assets other than in the ordinary
course of business and bankruptcy) in a Current Report on Form 8-K. The SEC maintains an Internet website that contains reports, proxy
and information statements and other information regarding issuers that file electronically with the SEC. The SEC’s Internet website
is located at http://www.sec.gov. In addition, the Company will provide copies of these documents without charge upon request from us
in writing 1250 Prospect Street, Suite 200, La Jolla, CA 92037 or by telephone at (650) 396-7700.
ITEM 1A. RISK FACTORS.
An investment in our securities
involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained
in this Annual Report on Form 10-K, the prospectus associated with our public offering and the Registration Statement, 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.
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 initial business combination, and even if we hold a vote, holders of our founder shares will participate
in such vote, which means we may complete our initial business combination even though a majority of our public shareholders do not support
such a combination.
We may choose not to hold
a shareholder vote to approve our initial business combination unless the business combination would require shareholder approval under
applicable law or stock exchange listing requirements. In such case, 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. Even if we seek shareholder approval, the holders of our founder shares will
participate in the vote on such approval. Accordingly, we may complete our initial business combination even if holders of a majority
of our ordinary shares do not approve of the business combination we complete.
If we seek shareholder approval of our initial
business combination, our initial shareholders and management team have agreed to vote in favor of such initial business combination,
regardless of how our public shareholders vote.
Our initial shareholders own
78.7% of our issued and outstanding ordinary shares.
Our initial shareholders and
management team also may from time to time purchase Class A ordinary shares prior to our initial business combination. Our amended and
restated memorandum and articles of association provides that, if we seek shareholder approval of an initial business combination, such
initial business combination will be approved if we receive an ordinary resolution under Cayman Islands law, which requires the affirmative
vote of a majority of the shareholders who attend and vote at a general meeting of the company, including the founder shares. As a result,
in addition to our initial shareholders’ founder shares, we do not need any of our public shares sold in the IPO to be voted in
favor of an initial business combination in order to have our initial business combination approved. Accordingly, if we seek shareholder
approval of our initial business combination, the agreement by our initial shareholders and management team to vote in favor of our initial
business combination will determine the likelihood that we will receive an ordinary resolution, being the requisite shareholder approval
for such initial business combination.
Your only opportunity to effect your investment
decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
At the time of your investment
in us, you will not be provided with an opportunity to evaluate the specific merits or risks of our initial business combination. 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. If we do not seek shareholder approval,
your only opportunity to effect your investment decision regarding our initial 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 minimum cash requirement for (i) cash consideration to be paid to the target or its
owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions.
If too many public shareholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result,
would not be able to proceed with the business combination. 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. Consequently, if accepting all properly submitted redemption requests
would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a condition as described above,
we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination.
Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.
The ability of our public shareholders to
exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination
or optimize our capital structure.
At the time we enter into
an agreement for our initial business combination, we will not know how many shareholders may exercise their redemption rights, and therefore
will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If
our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or
requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such
requirements, or arrange for third party financing. In addition, if a larger number of shares 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. Furthermore, this dilution would increase to the extent that the anti-dilution provision of the Class B ordinary
shares results in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares
at the time of our initial business combination. In addition, the amount of the deferred underwriting commissions payable to the underwriters
will not be adjusted for any shares that are redeemed in connection with an initial business combination. The per share amount we will
distribute to shareholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and
after such redemptions, the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting commissions.
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 is increased. 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 your exercise of redemption rights until we liquidate or you are able
to sell your shares in the open market.
Our search for a business combination, and
any target business with which we ultimately consummate a business combination, may be materially adversely affected by the coronavirus
(COVID-19) outbreak and the status of debt and equity markets, as well as protectionist legislation in our target markets.
In December 2019, a novel
strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other
parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus
disease (COVID-19) a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services
Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding
to COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic”. This outbreak
of COVID-19 has resulted in a widespread health crisis that has and may continue to adversely affect the economies and financial markets
worldwide, and the business of any potential target business with which we may consummate a business combination could be materially and
adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict
travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers
are unavailable to negotiate and consummate a transaction in a timely manner. In addition, countries or supranational organizations in
our target markets may develop and implement legislation that makes it more difficult or impossible for entities outside such countries
or target markets to acquire or otherwise invest in companies or businesses deemed essential or otherwise vital. The extent to which COVID-19
impacts our search for and ability to consummate a business combination will depend on future developments, which are highly uncertain
and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19
or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period
of time, and result in protectionist sentiments and legislation in our target markets, our ability to consummate a business combination,
or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.
In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted
by COVID-19 and other events.
Our search for a business combination, and
any target business with which we ultimately consummate a business combination, may be materially adversely affected by negative impacts
on the global economy, capital markets or other geopolitical conditions resulting from the recent invasion of Ukraine by Russia and subsequent
sanctions against Russia, Belarus and related individuals and entities.
The United States and global
markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the recent invasion of Ukraine
by Russia in February 2022. In response to such invasion, the North Atlantic Treaty Organization (“NATO”) deployed additional
military forces to eastern Europe. The United States, the United Kingdom, the European Union and other countries have announced various
sanctions and restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain financial
institutions from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system. The invasion of Ukraine by Russia
and the resulting measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the
European Union and other countries have created global security concerns that could have a lasting impact on regional and global economies.
Although the length and impact of the ongoing military conflict in Ukraine is highly unpredictable, the conflict could lead to market
disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions.
Additionally, Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and
lead to instability and lack of liquidity in capital markets.
Any of the abovementioned
factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian
invasion of Ukraine and subsequent sanctions, could adversely affect our search for a business combination and any target business with
which we ultimately consummate a business combination. The extent and duration of the Russian invasion of Ukraine, resulting sanctions
and any related market disruptions are impossible to predict, but could be substantial, particularly if current or new sanctions continue
for an extended period of time or if geopolitical tensions result in expanded military operations on a global scale. Any such disruptions
may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those related
to the market for our securities, cross-border transactions or our ability to raise equity or debt financing in connection with any particular
business combination. If these disruptions or other matters of global concern continue for an extensive period of time, our ability to
consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination,
may be materially adversely affected.
The requirement that we complete our initial
business combination by December 31, 2023 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
by December 31, 2023 (or such later date as may be approved by shareholders in connection with an amendment to the charter). 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 timeframe described above. In addition, we may have limited time to conduct
due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
We may not be able to complete our initial
business combination by December 31, 2023, in which case we would cease all operations except for the purpose of winding up and we would
redeem our public shares and liquidate.
We may not be able to find
a suitable target business and complete our initial business combination by December 31, 2023. 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. For example, the outbreak of COVID-19 continues to grow both in the U.S. and globally and, while the extent of the impact of the
outbreak on us will depend on future developments, it could limit our ability to complete our initial business combination, including
as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable
to us or at all. 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. Additionally, the outbreak of COVID-19 may negatively impact
businesses we may seek to acquire. If we have not completed our initial business combination within such time period, we will: (i) cease
all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter,
redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including
interest earned on the funds held in the trust account (less taxes payable and 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 shareholders’ rights
as shareholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject
in the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and in all cases
subject to the other requirements of applicable law.
If we seek shareholder approval of our initial
business combination, our sponsor, initial shareholders, directors, officers, advisors and 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 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 sponsor, directors, officers, advisors or their affiliates may purchase shares or Warrants 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 to do so. There is no limit on the number of shares our initial shareholders, 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.
None of the funds in the trust account will be used to purchase shares or Warrants in such transactions. Such purchases may include a
contractual acknowledgment 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 their affiliates purchase shares in privately negotiated transactions from public shareholders who have
already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem
their shares. The purpose of any such purchases of shares could be to vote such shares in favor of the business combination and thereby
increase the likelihood of obtaining shareholder approval of the 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 Warrants could be to reduce the
number of 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. 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.
In addition, if such purchases
are made, the public “float” of our Class A ordinary shares or Warrants and the number of beneficial holders of our securities
may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national securities
exchange.
If a shareholder fails to receive notice
of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for
submitting or tendering its shares, such shares may not be redeemed.
We will comply with the proxy
rules or tender offer 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 proxy materials or tender offer documents, as applicable, such shareholder
may not become aware of the opportunity to redeem its shares. In addition, proxy materials or tender offer documents, 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 submit public shares for redemption. For example, we intend to require our public
shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”
to, at the holder’s option, either deliver their share certificates to our transfer agent, or to deliver their shares to our transfer
agent electronically prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy
materials, this date may be up to two business days prior to the scheduled vote on the proposal to approve the initial business combination.
In addition, if we conduct redemptions in connection with a shareholder vote, we intend to require a public shareholder seeking redemption
of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the scheduled vote
in which the name of the beneficial owner of such shares is included. In the event that a shareholder fails to comply with these or any
other procedures disclosed in the proxy or tender offer materials, as applicable, its shares may not be redeemed.
You will not be entitled to protections
normally afforded to investors of many other blank check companies.
Since the net proceeds of
the IPO and the consummation of the Securities Purchase Agreement, the SPA Amendment and the Private Placement Warrants Purchase Agreement
are intended to be used to complete an initial business combination with a target business that has not been selected, we may be deemed
to be a “blank check” company under the United States securities laws. However, because we have net tangible assets in excess
of $5,000,000 and filed a Current Report on Form 8-K, including 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 the IPO were subject to
Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds
in the trust account were released to us in connection with our completion of an initial business combination.
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders
are deemed to hold in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 15%
of our Class A ordinary shares.
If we seek shareholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our amended and restated memorandum and articles of association provides that a public shareholder, together with
any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as
defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate
of 15% of the shares sold in the IPO without our prior consent, which we refer to as the “Excess Shares.” 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 their pro rata portion of the
funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.
We expect to encounter competition
from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships),
other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire.
Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly,
acquisitions of companies operating in or providing services to various industries. Many of these competitors possess similar or greater
technical, human and other resources to ours 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 the IPO and the consummation of the Securities Purchase Agreement, the SPA Amendment and the Private
Placement Warrants Purchase Agreement, 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, we are obligated to offer holders of our public shares the right to redeem their shares for
cash at the time of our initial business combination in conjunction with a shareholder vote or via a tender offer. Target companies will
be aware that this may 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 their pro rata portion of the funds in the trust account that are available for distribution
to public shareholders, and our warrants will expire worthless.
If the net proceeds of the IPO and the consummation
of the Securities Purchase Agreement, the SPA Amendment and the Private Placement Warrants Purchase Agreement not being held in the trust
account are insufficient to allow us to operate at least until December 31, 2023, it 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 our search and to complete our initial business combination.
Of the net proceeds of the
IPO, only $1,000,000 was made available to us initially outside the trust account to fund our working capital requirements. We believe
that the funds available to us outside of the trust account are sufficient to allow us to operate at least until December 31, 2023;
however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could use a portion of the funds available
to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down
payment or to fund a “no-shop” provision (a provision in letters of intent or merger agreements designed to keep target businesses
from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses)
with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into
a letter of intent or merger agreement 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 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. Up to $1,500,000 of such loans may be convertible into private placement warrants
of the post-business combination entity at a price of $1.50 per warrant at the option of the lender. Such warrants would be identical
to the private placement warrants. Prior to the completion of our initial business combination, we do not expect to seek loans from parties
other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide
a waiver against any and all rights to seek access to funds in our trust account. 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 an estimated $10.00 per share, or possibly less, on our redemption of our public shares, and
our warrants will expire worthless.
If third parties bring claims against us,
the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than
$10.00 per share.
Our placing of funds in the
trust account may not protect those funds from third party claims against us. Although we will seek to have all vendors, service providers,
prospective target businesses and 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 consider whether competitive alternatives are reasonably available to us and will only enter into an agreement with
such third party if management believes that such third party’s engagement would be in the best interests of the company under the
circumstances. WithumSmith+Brown, PC, our independent registered public accounting firm, and the underwriters of the IPO will not execute
agreements with us waiving such claims to the monies held in the trust account.
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 $10.00 per public share initially held in the trust account, due to claims of such creditors. Pursuant
to the letter agreement which is filed as an exhibit to this Form 10-K, 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 other similar agreement or business combination agreement, reduce the amount
of funds in the trust account to below the lesser of (i) $10.00 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 $10.00 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 (whether or not such waiver is enforceable)
nor will it apply to any claims under our indemnity of the underwriters of the IPO 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 we 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. As a result,
if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions
could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination,
and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our 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) $10.00 per 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 $10.00 per share due to reductions in the value of the trust
assets, in each case less taxes payable, and our sponsor asserts that it is unable to satisfy his obligations or that he 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 and subject to their fiduciary duties may choose not to do so in any particular instance 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. If our independent directors choose not to enforce these indemnification obligations,
the amount of funds in the trust account available for distribution to our public shareholders may be reduced below $10.00 per share.
If, after we distribute the proceeds in
the trust account to our public shareholders, we file a 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 some or all amounts received by our shareholders. In addition, our
board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, 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, 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 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 shareholders in connection with our liquidation may be reduced.
We, and following our initial business combination,
the post-business combination company, may face litigation and other risks as a result of material weaknesses in our internal control
over financial reporting.
As a result of the material
weaknesses in our internal control over financial reporting, the change in accounting for the warrants and the change in accounting for
the public shares, we potentially face litigation or other disputes which may include, among others, claims invoking the federal and state
securities laws, contractual claims or other claims arising from the material weaknesses and the preparation of our financial statements.
As of the date of this Annual Report on Form 10-K, we have no knowledge of any such litigation or dispute. However, we can provide no
assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could
have a material adverse effect on our business, results of operations and financial condition or our ability to complete a business combination.
If we are deemed to be an investment company
for purposes of the Investment Company Act, we may be forced to abandon our efforts to complete a business combination and instead be
required to liquidate the Company. To mitigate the risk of that result we have instructed Continental Stock Transfer & Trust
Company to liquidate the securities held in the Trust Account and instead hold all funds in the Trust Account in a bank deposit account.
On March 30, 2022, the SEC issued the SPAC
Rule Proposals, relating, among other things, to circumstances in which SPACs such as us could potentially be subject to the Investment
Company Act and the regulations thereunder. The SPAC Rule Proposals would provide a safe harbor for such companies from the definition
of “investment company” under Section 3(a)(1)(A) of the Investment Company Act, provided that a SPAC satisfies certain
criteria.
To comply with the duration limitation of the
proposed safe harbor, a SPAC would have a limited time period to announce and complete a de-SPAC transaction. Specifically, to comply
with the safe harbor, the SPAC Rule Proposals would require a company to file a report on Form 8-K announcing that it has entered
into an agreement with a target company for a business combination no later than 18 months after the effective date of the registration
statement for its IPO. The company would then be required to complete its initial business combination no later than 24 months
after the effective date of the registration statement for its IPO.
There is currently uncertainty concerning the
applicability of the Investment Company Act to a SPAC, including a company like ours, that does not complete its initial business combination
within the proposed time frame set forth in the proposed safe harbor rule. As indicated above, we completed our IPO in January 2021
and have operated as a blank check company searching for a target business with which to consummate a business combination since such
time. As a result, it is possible that a claim could be made that we have been operating as an unregistered investment company if the
SPAC Rule Proposals are adopted as proposed. If we were deemed to be an investment company for purposes of the Investment Company Act,
we might be forced to abandon our efforts to complete a business combination and instead be required to liquidate the Company. If we are
required to liquidate the Company, our investors would not be able to realize the benefits of owning shares in a successor operating business,
including the potential appreciation in the value of our shares and warrants or rights following such a transaction, and our warrants
or rights would expire worthless.
The funds in the Trust Account have, since our
IPO, been held only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds investing
solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company
Act which invest only in direct U.S. government treasury obligations. To mitigate the risk of us being deemed to have been operating as
an unregistered investment company under the Investment Company Act, we have instructed Continental Stock Transfer & Trust Company,
the trustee with respect to the Trust Account, to liquidate the U.S. government treasury obligations or money market funds held in
the Trust Account and thereafter to hold all funds in the Trust Account in a bank deposit account (i.e., in one or more bank accounts)
until the earlier of the consummation of a business combination or our liquidation. Interest on bank deposit accounts is variable and
such accounts currently yield interest of approximately 3.0% per annum.
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.
If we are unable to consummate our initial
business combination by December 31, 2023, our public shareholders may be forced to wait until December 31, 2023 before redemption from
our trust account.
If we are unable to consummate
our initial business combination by December 31, 2023, the proceeds then on deposit in the trust account, including interest earned on
the funds held in the trust account (less taxes payable and up to $100,000 of interest to pay dissolution expenses), will be used to fund
the redemption of our public shares, as further described herein. Any redemption of public shareholders from the trust account will 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 wind-up, 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 until December 31, 2023 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 we consummate our initial business combination
prior thereto and only then in cases where investors have 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.
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, 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 $18,293 and to imprisonment for five
years in the Cayman Islands.
We may not hold an annual general meeting
until after the consummation of our initial business combination, which could delay the opportunity for our shareholders to appoint directors.
In accordance with Nasdaq
corporate governance requirements, we are not required to hold an annual general meeting until no later than one year after our first
fiscal year end following our listing on 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 appoint directors and to discuss company affairs with management. Our board of directors is divided into three classes with only one
class of directors being appointed in each year and each class (except for those directors appointed prior to our first annual general
meeting) serving a three-year term.
Because we are neither limited to evaluating
a target business in a particular industry sector nor have we selected any 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.
Our efforts to identify a
prospective initial business combination target will not be limited to a particular industry, sector or geographic region. While we may
pursue an initial business combination opportunity in any industry or sector, we intend to capitalize on the ability of our management
team to identify and acquire a business or businesses that can benefit from our management team’s established global relationships
and operating experience. Our management team has extensive experience in identifying and executing strategic investments globally and
has done so successfully in a number of sectors, including consumer brands sectors. Our amended and restated memorandum and articles of
association prohibits us from effectuating a business combination with another blank check company or similar company with nominal operations.
Because we have not yet selected any specific target business with respect to a business combination, there is no basis to evaluate the
possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial
condition or prospects. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the
business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established
record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development
stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot
assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete
due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances
that those risks will adversely impact a target business. We also cannot assure you that an investment in our Units will ultimately prove
to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly,
any shareholders who choose to remain shareholders following the business combination could suffer a reduction in the value of their securities.
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 proxy solicitation or tender offer materials, as applicable, relating to the business
combination contained an actionable material misstatement or material omission.
We may seek business combination 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 business combination opportunity for our company. Although our management will endeavor to evaluate
the risks inherent in any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess
all of the significant risk factors. We also cannot assure you that an investment in our Units will not ultimately prove to be less favorable
to investors in the IPO than a direct investment, if an opportunity were available, in a business combination candidate. In the event
we elect to pursue a business combination 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 Form 10-K 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 ascertain or assess adequately all of the relevant 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.
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 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 only receive their pro rata portion of the funds in the trust account that are available for distribution to public
shareholders, and our warrants will expire worthless.
We are not required to obtain an opinion
from an independent investment banking firm or from a valuation or appraisal firm, and consequently, you may have no assurance from an
independent source that the price we are paying for the business is fair to our shareholders from a financial point of view.
Unless we complete our initial
business combination with an affiliated entity or our board of directors cannot independently determine the fair market value of the target
business or businesses (including with the assistance of financial advisors), we are not required to obtain an opinion from an independent
investment banking firm which is a member of FINRA or from a valuation or appraisal firm that the price we are paying is fair to our shareholders
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 proxy materials or tender offer documents, as applicable, related to our initial business combination.
We may issue additional Class A ordinary
shares or preferred shares to complete our initial business combination or under an employee incentive plan after completion of our initial
business combination. We may also issue Class A ordinary shares upon the conversion of the founder 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 therein. Any such issuances would
dilute the interest of our shareholders and likely present other risks.
Our amended and restated memorandum
and articles of association authorizes the issuance of up to 200,000,000 Class A ordinary shares, par value $0.0001 per share, 20,000,000
Class B ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share. There are 167,500,000
and 11,875,000 authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance, which
amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion
of the Class B ordinary shares. The Class B ordinary shares are automatically convertible into Class A ordinary shares concurrently with
or immediately following the consummation of our initial business combination, initially at a one-for-one ratio but subject to adjustment
as set forth herein and in our amended and restated memorandum and articles of association, including in certain circumstances in which
we issue Class A ordinary shares or equity-linked securities related to our initial business combination. Immediately after the IPO, there
were no preference shares issued and outstanding.
We may issue a substantial
number of 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 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 as set forth therein. However, our amended and restated memorandum and articles of association provides, among other things,
that prior to our initial business combination, we may not issue additional shares that would entitle the holders thereof to (i) receive
funds from the trust account or (ii) vote on any initial business combination. These provisions of our amended and restated memorandum
and articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with
a shareholder vote. The issuance of additional ordinary or preferred shares:
| ● | may significantly dilute the
equity interest of investors in the IPO; |
| ● | may subordinate the rights of
holders of Class A ordinary shares if preferred shares are issued with rights senior to those afforded our Class A ordinary shares; |
| ● | could cause a change in control
if a substantial number of Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating
loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and |
| ● | may adversely affect prevailing
market prices for our Units, Class A ordinary shares and/or Warrants. |
Unlike some other similarly structured special
purpose acquisition companies, our initial shareholders will receive additional Class A ordinary shares if we issue certain shares to
consummate an initial business combination.
The founder shares will automatically
convert into Class A ordinary shares concurrently with or immediately following the consummation of our initial business combination on
a one-for-one basis, subject to adjustment for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the
like, and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares or equity-linked securities
are issued or deemed issued in connection with our initial business combination, the number of Class A ordinary shares issuable upon conversion
of all founder shares will equal, in the aggregate, 20% of the total number of Class A ordinary shares outstanding after such conversion
(after giving effect to any redemptions of Class A ordinary shares by public shareholders), including the total number of Class A ordinary
shares issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued,
by the Company in connection with or in relation to the consummation of the initial business combination, excluding any Class A ordinary
shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller
in the initial business combination and any private placement warrants issued to our sponsor, officers or directors upon conversion of
working capital loans; provided that such conversion of founder shares will never occur on a less than one-for-one basis.
Resources could be wasted in researching
business combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge
with another business. If we are unable to complete our initial business combination, our public shareholders may only receive their pro
rata portion of the funds in the trust account that are available for distribution to public shareholders, 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, consultants 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 only receive their pro rata portion of the funds
in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.
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 existing holders 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, directors or existing holders. Our directors also serve as officers and board members for other entities. 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 substantive
discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting,
any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our
criteria for a business combination as set forth in “Proposed Business - Effecting our initial business combination - Selection
of a target business and structuring of our initial business combination” and such transaction was approved by a majority of our
independent and disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm which
is a member of FINRA or a valuation or appraisal firm regarding the fairness to our company from a financial point of view of a business
combination with one or more domestic or international businesses affiliated with our sponsor, officers, directors or existing holders,
potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to
our public shareholders as they would be absent any conflicts of interest.
Since our sponsor, officers and directors
will lose their entire investment in us if our initial business combination is not completed, a conflict of interest may arise in determining
whether a particular business combination target is appropriate for our initial business combination.
On September 28, 2020, our
sponsor paid $10,075,000 to purchase the founder shares and the private placement warrants. On December 16, 2020, pursuant to the SPA
Amendment, our sponsor returned certain Class B ordinary shares and private placement warrants to us for $2,300,000. On January 7, 2021,
pursuant to the Private Placement Warrants Purchase Agreement, our sponsor agreed to purchase an aggregate of 166,666 private placement
warrants (or 766,666 in the aggregate if the underwriters’ option to purchase additional units was exercised in full) simultaneously
with the closing of the IPO. In addition, on January 7, 2021, we effected a 1:1.2 share capitalization of our Class B ordinary shares,
resulting in an aggregate of 8,625,000 founder shares outstanding, all of which are held by our sponsor. As a result of the underwriter’s
partial exercise of the over-allotment, 500,000 founder shares were forfeited. Prior to consummation of the Securities Purchase Agreement,
the company had no assets, tangible or intangible. The number of founder shares outstanding was determined based on the expectation that
such founder shares would represent 20% of the outstanding shares after the IPO. The founder shares will be worthless if we do not complete
the initial business combination. In addition, 5,666,667 private placement warrants, each exercisable for one Class A ordinary share at
$11.50 per share, at a purchase price of $1.50 per warrant, will also be worthless if we do not complete our initial business combination.
The personal and financial interests of our 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 December 31, 2023 nears, which is the deadline for our completion 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 on Form 10-K to issue any notes or other debt securities, or to otherwise incur outstanding debt,
we may choose to incur substantial debt to complete our initial business combination. We and our officers have agreed that we will not
incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the
monies held in the trust account. As such, no issuance of debt will affect the per share amount available for redemption from the trust
account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
| ● | default and foreclosure on our
assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
| ● | acceleration of our obligations
to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the
maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
| ● | our immediate payment of all
principal and accrued interest, if any, if the debt security is payable on demand; |
| ● | our inability to obtain necessary
additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security
is outstanding; |
| ● | our inability to pay dividends
on our Class A ordinary shares; |
| ● | using a substantial portion
of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary
shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
| ● | limitations on our flexibility
in planning for and reacting to changes in our business and in the industry in which we operate; |
| ● | increased vulnerability to adverse
changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
| ● | limitations on our ability to
borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and
other purposes and other disadvantages compared to our competitors who have less debt. |
We may only be able to complete one business
combination with the proceeds of the IPO and the consummation of the Securities Purchase Agreement, the SPA Amendment and the Private
Placement Warrants Purchase Agreement, 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. The net proceeds from the
IPO and the consummation of the Securities Purchase Agreement, the SPA Amendment and the Private Placement Warrants Purchase Agreement
provided us with $22,270,755 that we may use to complete our initial business combination (after taking into account the recent redemptions).
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 developments. Further, we would not be able to diversify our operations or benefit from the possible spreading
of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different
industries or different areas of a single industry. Accordingly, the prospects for our success may be:
| ● | solely dependent upon the performance
of a single business, property or asset, or |
| ● | dependent upon the development
or market acceptance of a single or limited number of products, processes or services. |
This lack of diversification
may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon
the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete
business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and
give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously
acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its
business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay
our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including
additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers)
and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies
in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results
of operations.
We may attempt to complete our initial business
combination with a private company about which little information is available, which may result in a business combination with a company
that is not as profitable as we suspected, if at all.
In pursuing our business combination
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 our initial business combination with which
a substantial majority of our shareholders do not agree.
Our amended and restated memorandum
and articles of association provides that in no event will we redeem our public shares in an amount that would cause our net tangible
assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for (i)
cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii)
the retention of cash to satisfy other conditions. As a result, we may be able to complete our initial business combination even though
a substantial majority of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder
approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant
to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors,
advisors 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, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and other governing
instruments, including their warrant agreements. 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 our shareholders may not support.
In order to effectuate a business
combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and governing
instruments, including their warrant agreements. For example, special purpose acquisition companies have amended the definition of business
combination, increased redemption thresholds and extended the time to consummate an initial business combination and, with respect to
their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending our
amended and restated memorandum and articles of association requires a special resolution under Cayman Islands law, being the affirmative
vote of a majority of at least two-thirds of the shareholders who attend and vote at a general meeting of the company, and amending our
warrant agreement requires a vote of holders of at least 50% of the Warrants and, solely with respect to any amendment to the terms of
the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 50% of the then
outstanding private placement warrants. In addition, our amended and restated memorandum and articles of association requires us to provide
our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated
memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with
our initial business combination or to redeem 100% of our public shares if we do not complete an initial business combination by December
31, 2023 or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination
activity. To the extent any of such amendments would be deemed to fundamentally change the nature of the securities offered through this
registration statement, we would register, or seek an exemption from registration for, the affected securities. We cannot assure you that
we will not seek to amend our charter 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 not less than two-thirds of our
ordinary shares who attend and vote at a general meeting of the company (or 65% of our ordinary shares with respect to amendments to the
trust agreement governing the release of funds from our trust account), which is a lower amendment threshold than that of some other special
purpose acquisition companies. It may be easier for us, therefore, to amend our amended and restated memorandum and articles of association
to facilitate the completion of an initial business combination that some of our shareholders may not support.
Our amended and restated memorandum
and articles of association provides that any of its provisions related to pre-business combination activity (including the requirement
to deposit proceeds of the IPO and the private placement of warrants into the trust account and not release such amounts except in specified
circumstances, and to provide redemption rights to public shareholders as described herein) may be amended if approved by special resolution,
under Cayman Islands law being the affirmative vote of a majority of at least two-thirds of the shareholders who attend and vote at a
general meeting of the company, 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. Our initial shareholders, who collectively beneficially own 78.7%
of our ordinary shares, will 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 special
purpose acquisition companies, and this may increase our ability to complete a business combination with which you do not agree. Our shareholders
may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
Our sponsor, officers, directors
and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and
restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection
with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by
December 31, 2023 or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial business
combination activity, unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval
of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including
interest 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. Our shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will
not have the ability to pursue remedies against our sponsor, officers, directors or director nominees for any breach of these agreements.
As a result, in the event of a breach, our shareholders would need to pursue a shareholder derivative action, subject to applicable law.
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.
We have not selected any specific
business combination target but intend to target businesses with enterprise values that are greater than we could acquire with the net
proceeds of the IPO and the consummation of the Securities Purchase Agreement, the SPA Amendment and the Private Placement Warrants Purchase
Agreement. As a result, if the cash portion of the purchase price exceeds the amount available from the trust account, net of amounts
needed to satisfy any redemption by public shareholders, we may be required to seek additional financing to complete such proposed initial
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. Further, we may be
required to obtain additional financing in connection with the closing of our initial business combination for general corporate purposes,
including for maintenance or expansion of operations of the post-transaction businesses, the payment of principal or interest due on indebtedness
incurred in completing our initial business combination, or to fund the purchase of other companies. If we are unable to complete our
initial business combination, our public shareholders may only receive their pro rata portion of the funds in the trust account that are
available for distribution to public shareholders, and our warrants will expire worthless. 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.
Our initial shareholders control a substantial
interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do
not support.
Our initial shareholders own
78.7% of our issued and outstanding ordinary shares. Accordingly, they may exert a substantial influence on 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.
In addition, prior to the closing of our initial business combination, only holders of our founder shares will have the right to vote
to continue the Company in a jurisdiction outside the Cayman Islands. This provision of our amended and restated memorandum and articles
of association may only be amended by a special resolution passed by not less than two-thirds of our ordinary shares who attend and vote
at our general meeting which shall include the affirmative vote of a simple majority of our Class B ordinary shares. As a result, you
will not have any influence over our continuation in a jurisdiction outside the Cayman Islands prior to our initial business combination.
If our initial shareholders
purchase any additional Class A ordinary shares in the aftermarket or in privately negotiated transactions, this would increase their
control. Neither our initial shareholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase
additional securities. Factors that would be considered in making such additional purchases would include consideration of the current
trading price of our Class A ordinary shares. In addition, our board of directors, whose members were appointed by our sponsor, is and
will be divided into three classes, each of which will generally serve for a term for three years with only one class of directors being
appointed in each year. We may not hold an annual or extraordinary general meeting to appoint new directors prior to the completion of
our initial business combination, in which case all of the current directors will continue in office until at least the completion of
the business combination. If there is an annual general meeting, as a consequence of our “staggered” board of directors, only
a minority of the board of directors will be considered for appointment and our initial shareholders, because of their ownership position,
will have considerable influence regarding the outcome. Accordingly, our initial shareholders will continue to exert control at least
until the completion of our initial business combination.
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 the proxy statement with respect to the vote on an initial business combination include historical and pro forma financial statement
disclosure. 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 (“GAAP”) or international financial reporting
standards as issued by the International Accounting Standards Board (“IFRS”) depending on the circumstances and the historical
financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (“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 statements in accordance with
federal proxy rules and complete our initial business combination within the prescribed time frame.
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 initial business combination.
Section 404 of the Sarbanes-Oxley
Act required 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, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify
as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement
on our internal control over financial reporting. 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 business with which we seek to complete our initial business combination may
not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the
internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete
any such business combination.
RISKS RELATING TO THE POST-BUSINESS COMBINATION
COMPANY
Subsequent to our 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 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
within 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 debt financing to partially
finance the initial business combination or thereafter. Accordingly, any shareholders who choose to remain shareholders following the
business combination could suffer a reduction in the value of their securities. 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 proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material
misstatement or material omission.
The officers and directors of an acquisition
candidate may resign upon completion of our initial business combination. The loss 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 our initial
business combination so that the post-transaction company in which our public shareholders own shares will own less than 100% of the equity
interests or assets of a target business, but we will 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 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. 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 outstanding capital stock, shares 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 Class
A ordinary shares, our shareholders immediately prior to such transaction could own less than a majority of our issued and outstanding
Class A 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 control of the target business.
We may have a 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 business’s management,
therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target
business’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and
profitability of the post-combination business may be negatively impacted. Accordingly, any shareholders who choose to remain shareholders
following the business combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy
for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors
of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws
that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material
misstatement or material omission.
Our initial business combination and our
structure thereafter may not be tax-efficient to our shareholders and warrant holders. As a result of our business combination, our tax
obligations may be more complex, burdensome and uncertain.
Although we will attempt to
structure our initial business combination in a tax-efficient manner, tax structuring considerations are complex, the relevant facts and
law are uncertain and may change, and we may prioritize commercial and other considerations over tax considerations. For example, in connection
with our initial business combination and subject to any requisite shareholder approval, we may structure our business combination in
a manner that requires shareholders and/or warrant holders to recognize gain or income for tax purposes, effect a business combination
with a target company in another jurisdiction, or reincorporate in a different jurisdiction (including, but not limited to, the jurisdiction
in which the target company or business is located). We do not intend to make any cash distributions to shareholders or warrant holders
to pay taxes in connection with our business combination or thereafter. Accordingly, a shareholder or a warrant holder may need to satisfy
any liability resulting from our initial business combination with cash from its own funds or by selling all or a portion of the shares
received. In addition, shareholders and warrant holders may also be subject to additional income, withholding or other taxes with respect
to their ownership of us after our initial business combination.
In addition, we may effect
a business combination with a target company that has business operations outside of the United States, and possibly, business operations
in multiple jurisdictions. If we effect such a business combination, we could be subject to significant income, withholding and other
tax obligations in a number of jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions. Due to
the complexity of tax obligations and filings in other jurisdictions, we may have a heightened risk related to audits or examinations
by U.S. federal, state, local and non-U.S. taxing authorities. This additional complexity and risk could have an adverse effect on our
after-tax profitability and financial condition.
RISKS RELATING TO ACQUIRING AND OPERATING A
BUSINESS IN FOREIGN COUNTRIES
If we effect our initial business combination
with a company located outside of the United States, we would be subject to a variety of additional risks that may adversely affect us.
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; |
| ● | unexpected changes in regulatory requirements; |
| ● | challenges in managing and staffing international operations; |
| ● | tax issues, such as tax law changes and variations in tax
laws as compared to the United States; |
| ● | currency fluctuations and exchange controls; |
| ● | challenges in collecting accounts receivable; |
| ● | cultural and language differences; |
| ● | underdeveloped or unpredictable legal or regulatory systems; |
| ● | protection of intellectual property; |
| ● | social unrest, crime, strikes, riots and civil disturbances; |
| ● | regime changes and political upheaval; |
| ● | terrorist attacks and wars; 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.
We may reincorporate in another jurisdiction
in connection with our initial business combination and such reincorporation may result in taxes imposed on shareholders or warrant holders.
We may, in connection with
our initial business combination and subject to requisite shareholder approval by special resolution under the Companies Act, reincorporate
in the jurisdiction in which the target company or business is located or in another jurisdiction. The transaction may require a shareholder
or warrant holder to recognize taxable income in the jurisdiction in which the shareholder or warrant holder is a tax resident or in which
its members are resident if it is a tax transparent entity. We do not intend to make any cash distributions to shareholders or warrant
holders to pay such taxes. Shareholders or warrant holders may be subject to withholding taxes or other taxes with respect to their ownership
of us after the reincorporation.
We may reincorporate in another jurisdiction
in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements
and we may not be able to enforce our legal rights.
In connection with our initial
business combination, we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine
to do this, the laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement
of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability
to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities
or capital.
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 Securities and Exchange Commission, 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 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.
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, our management may resign from their positions as officers or directors of the company and the management of the target business
at the time of the business combination will remain in place. Management of the target business may not be familiar with United States
securities laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming
familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect
our operations.
After our initial business combination,
substantially all of our assets may be located in a foreign country and substantially all of our revenue will be derived from our operations
in such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political
and legal policies, developments and conditions in the country in which we operate.
The economic, political and
social conditions, as well as government policies, of the country in which our operations are located could affect our business. Economic
growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future.
If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand
for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our
ability to find an attractive target business with which to consummate our initial business combination and if we effect our initial business
combination, the ability of that target business to become profitable.
Exchange rate fluctuations and currency
policies may cause a target business’ ability to succeed in the international markets to be diminished.
In the event we acquire a
non-U.S. target, all revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and
distributions, if any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our
target regions fluctuate and are affected by, among other things, changes in political and economic conditions. Any change in the relative
value of such currency against our reporting currency may affect the attractiveness of any target business or, following consummation
of our initial business combination, our financial condition and results of operations. Additionally, if a currency appreciates in value
against the dollar prior to the consummation of our initial business combination, the cost of a target business as measured in dollars
will increase, which may make it less likely that we are able to consummate such transaction.
RISKS RELATING TO OUR MANAGEMENT TEAM
We are dependent upon our officers and directors
and their loss could adversely affect our ability to operate.
Our operations are dependent
upon a relatively small group of individuals and, in particular, our 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 their 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.
Involvement of members of our management
and companies with which they are affiliated in civil disputes and litigation or governmental investigations unrelated to our business
affairs could materially impact our ability to complete an initial business combination.
Members of our management
team and companies with which they are affiliated have been, and in the future will continue to be, involved in a wide variety of business
affairs, including transactions, such as sales and purchases of businesses, and ongoing operations. As a result of such involvement, members
of our management and companies with which they are affiliated in past have been, and may in the future be, involved in civil disputes
and litigation and governmental investigations relating to their business affairs unrelated to our company. For example, our founders
Derek Aberle and Steven Altman have been named as executive defendants in In re Qualcomm Incorporated Securities Litigation, a class action
lawsuit alleging violations of federal securities law in connection with the licensing policies of Qualcomm, a technology and communications
company for which Mr. Aberle and Mr. Altman successively served as President, and a related Shareholder derivative lawsuit. Mr. Aberle
and Mr. Altman believe that the allegations in the lawsuits lack merit and intend to defend vigorously against the lawsuits. Any claims
or investigations involving members of our management and companies with which they are affiliated may be detrimental to our reputation
and could negatively affect our ability to identify and complete an initial business combination in a material manner and may have an
adverse effect on the price of our securities.
Our ability to successfully effect our initial
business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us
following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our
post-combination business.
Our ability to successfully
effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target
business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management
or advisory positions following our initial business combination, it is likely that some or all of the management of the target business
will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot
assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements
of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with
such requirements.
Our key personnel may negotiate employment
or consulting agreements with a target business in connection with a particular business combination, and a particular business combination
may be conditioned on the retention or resignation of such key personnel. 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 our 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. Such negotiations also could make such key personnel’s
retention or resignation a condition to any such agreement. 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.
Our officers and directors will allocate
their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs.
This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our officers and directors
are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their
time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time
employees prior to the completion of our initial business combination. Each of our officers is engaged in other business endeavors for
which he may be entitled to substantial compensation, and our officers are not obligated to contribute any specific number of hours per
week to our affairs. 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.
Our officers and directors presently have,
and any of them in the future may have additional, fiduciary or contractual obligations to other entities and, accordingly, may have conflicts
of interest in determining to which entity a particular business opportunity should be presented.
Following the completion of
the IPO and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with
one or more businesses. Each of our officers and directors presently has, 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 entities. 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 another entity
prior to its presentation to us, subject to their fiduciary duties under Cayman Islands law. Our amended and restated memorandum and articles
of association provides 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.
In addition, our sponsor and
our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business
or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments
may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such potential
conflicts would materially affect our ability to complete our initial business combination.
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.
The personal and financial
interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing
a business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target
business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination
are appropriate and in our shareholders’ best interest. If this were the case, it would be a breach of their fiduciary duties to
us as a matter of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing on our shareholders’
rights.
We may not have sufficient funds to satisfy
indemnification claims of our directors and officers.
We have agreed to indemnify
our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right,
title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any
reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside
of the trust account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and directors may
discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions
also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action,
if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected
to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
Our letter agreement with our sponsor, officers
and directors may be amended without shareholder approval.
Our letter agreement with
our sponsor, officers and directors contains provisions relating to transfer restrictions of our founder shares and private placement
warrants, indemnification of the trust account, waiver of redemption rights and participation in liquidating distributions from the trust
account. The letter agreement may be amended without shareholder approval (although releasing the parties from the restriction not to
transfer the founder shares for 185 days following the date of the prospectus requires the prior written consent of the underwriters).
While we do not expect our board to approve any amendment to the letter agreement 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 the letter agreement. Any such amendments to the letter agreement would not require approval from our shareholders and may have an
adverse effect on the value of an investment in our securities.
RISKS RELATING TO OUR SECURITIES
You will not have any rights or interests
in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, 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: (i) our completion of an initial business combination,
and then only in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations
and on the conditions described in the prospectus, (ii) the redemption of any public shares properly submitted in connection with a shareholder
vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation
to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our
initial business combination by December 31, 2023 or (B) with respect to any other material provisions relating to shareholders’
rights or pre-initial business combination activity, and (iii) the redemption of our public shares if we are unable to complete an initial
business combination by December 31, 2023, subject to applicable law and as further described in the prospectus. In no other circumstances
will a public 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, Class A ordinary
shares and Warrants are listed on Nasdaq. Although we meet, on a pro forma basis, the minimum initial listing standards set forth in the
Nasdaq listing standards, we cannot assure you that our securities 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. Generally, following our IPO, we must maintain a minimum amount in Shareholders’
equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 public holders). Additionally, in connection
with our initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements,
which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities
on Nasdaq. For instance, our share price would generally be required to be at least $4.00 per share and our Shareholders’ equity
would generally be required to be at least $5.0 million and we would be required to have a minimum of 300 round lot holders of our securities,
with at least 50% of such round lot holders holding securities with a market value of at least $2,500. We cannot assure you that we will
be able to meet those initial listing requirements at that time.
If Nasdaq delists our securities
from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities
could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
| ● | a limited availability of market
quotations for our securities; |
| ● | reduced liquidity for our securities; |
| ● | a determination that our Class
A ordinary shares are a “penny stock” which will require brokers trading in our Class A ordinary shares to adhere to more
stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
| ● | a limited amount of news and
analyst coverage; and |
| ● | a decreased ability to issue
additional securities or obtain additional financing in the future. |
The National Securities Markets
Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which
are referred to as “covered securities.” Because our Units, Class A ordinary shares and Warrants are listed on Nasdaq, our
Units, Class A ordinary shares and Warrants will qualify as covered securities under the statute. Although the states are preempted from
regulating the sale of our 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 the statute and we would be subject to regulation
in each state in which we offer our securities.
The determination of the offering price
of our Units and the size of the IPO is more arbitrary than the pricing of securities and size of an offering of an operating company
in a particular industry. You may have less assurance, therefore, that the offering price of our Units properly reflects the value of
such Units than you would have in a typical offering of an operating company.
Prior to the IPO there has
been no public market for any of our securities. The public offering price of the Units and the terms of the Warrants were negotiated
between us and the underwriters. In determining the size of the IPO, management held customary organizational meetings with the representative
of the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount
the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the size of the IPO, prices and
terms of the Units, including the Class A ordinary shares and Warrants underlying the Units, include:
| ● | the history and prospects of companies whose principal business
is the acquisition of other companies; |
| ● | prior offerings of those companies; |
| ● | our prospects for acquiring an operating business at attractive
values; |
| ● | a review of debt to equity ratios in leveraged transactions; |
| ● | an assessment of our management and their experience in identifying
operating companies; |
| ● | general conditions of the securities markets at the time of
the IPO; and |
| ● | general conditions of the securities markets at the time of
the IPO; and |
Although these factors were
considered, the determination of our offering size, price and terms of the Units is more arbitrary than the pricing of securities of an
operating company in a particular industry since we have no historical operations or financial results.
There is currently no market for our securities
and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.
There is currently no market
for our securities. Shareholders therefore have no access to information about prior market history on which to base their investment
decision. Following the IPO, 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 will
be 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. We will also be subject to the federal securities laws of the United
States. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities
of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law
of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common
law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our
shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under
statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities
laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted
bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a
Federal court of the United States.
We have been advised by Maples
and Calder, 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.
After our initial business combination,
it is possible that a majority of our directors and officers will live outside the United States and all of our assets will be located
outside the United States; therefore, investors may not be able to enforce federal securities laws or their other legal rights.
It is possible that after
our initial business combination, a majority of our directors and officers will reside outside of the United States and all 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.
Provisions in our amended and restated memorandum
and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future
for our Class A ordinary shares and could entrench management.
Our amended and restated memorandum
and articles of association contains provisions that may discourage unsolicited takeover proposals that shareholders may consider to be
in their best interests. These provisions include a staggered board of directors and the ability of the board of directors to designate
the terms of and issue new series of preferred shares, which may make the removal of management more difficult and may discourage transactions
that otherwise could involve payment of a premium over prevailing market prices for our securities.
An investment in the IPO may result in uncertain
U.S. federal income tax consequences.
An investment in the IPO may
result in uncertain U.S. federal income tax consequences. For instance, because there are no authorities that directly address instruments
similar to the Units we are issuing in the IPO, the allocation an investor makes with respect to the purchase price of a Unit between
the Class A ordinary shares and the one-third of one Warrant to purchase one Class A ordinary share included in each Unit could be challenged
by the IRS or courts. In addition, the U.S. federal income tax consequences of a cashless exercise of Warrants included in the Units issued
in the IPO 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 (as defined in section titled “Taxation - United States Federal Income Tax Considerations -
U.S. Holders”) 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
dividend income” for U.S. federal income tax purposes.
We may amend the terms of the warrants in
a manner that may be adverse to holders of Warrants with the approval by the holders of at least 50% of the then outstanding Warrants.
As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of Class A
ordinary shares purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants were issued in
registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant
agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity
or to correct any defective provision or mistake, including to conform the provisions of the warrant agreement to the description of the
terms of the warrants and the warrant agreement set forth in the prospectus, (ii) adjusting the provisions relating to cash dividends
on ordinary shares as contemplated by and in accordance with the warrant agreement or (iii) adding or changing any provisions with respect
to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and
that the parties deem to not adversely affect the rights of the registered holders of the warrants, provided that the approval by the
holders of at least 50% of the then-outstanding Warrants is required to make any change that adversely affects the interests of the registered
holders of Warrants. Accordingly, we may amend the terms of the Warrants in a manner adverse to a holder of Warrants if holders of at
least 50% of the then outstanding Warrants approve of such amendment. Although our ability to amend the terms of the Warrants with the
consent of at least 50% of the then outstanding Warrants is unlimited, examples of such amendments could be amendments to, among other
things, increase the exercise price of the warrants, convert the warrants into cash or shares, shorten the exercise period or decrease
the number of Class A ordinary shares purchasable upon exercise of a warrant.
Our warrant agreement designates the courts
of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for
certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders
to obtain a favorable judicial forum for disputes with our company.
Our warrant agreement provides
that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement,
including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District
Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the
exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum.
Notwithstanding the foregoing,
these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act
or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person
or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented
to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope the forum provisions
of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the
Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed
to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with
any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of
process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign
action as agent for such warrant holder.
This choice-of-forum provision
may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company,
which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable
with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving
such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations
and result in a diversion of the time and resources of our management and board of directors.
A provision of our warrant agreement may
make it more difficult for us to consummate an initial business combination.
If (i) we issue additional
ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination
at 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, and (iii)
the Market Value of our Class A ordinary shares is below $9.20 per share, then the exercise price of the warrants will be adjusted (to
the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, 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 and the
$10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 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 closing price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of
shares issuable upon exercise or the exercise price of a warrant) for any 20 trading days within a 30 trading-day period ending on the
third trading day prior to the date on which we give proper notice of such redemption to the warrants holders and provided certain other
conditions are met. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register
or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem the warrants as set
forth above even if the holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants could force you
to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell
your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) 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.
In addition, we have the ability
to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, provided that the closing price
of our Class A ordinary shares equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise
or the exercise price of a warrant) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper
notice of such redemption and provided that certain other conditions are met, including that holders will be able to exercise their warrants
prior to redemption for a number of Class A ordinary shares determined based on the redemption date and the fair market value of our Class
A ordinary shares. The value received upon exercise of the warrants (i) may be less than the value the holders would have received if
they had exercised their warrants at a later time where the underlying share price is higher and (ii) may not compensate the holders for
the value of the warrants, including because the number of Class A ordinary shares received is capped at 0.361 Class A ordinary shares
per warrant (subject to adjustment) irrespective of the remaining life of the warrants.
Our warrants may have an adverse effect
on the market price of our Class A ordinary shares and make it more difficult to effectuate our initial business combination.
We issued Warrants to purchase
10,833,333 of our Class A ordinary shares as part of the Units offered by the prospectus and, pursuant to the Securities Purchase Agreement
and Private Placement Warrants Purchase Agreement, we issued and sold an aggregate of 5,666,667 private placement warrants. In addition,
if the sponsor makes any working capital loans, it may convert those loans into up to an additional 1,000,000 private placement warrants,
at the price of $1.50 per warrant. 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 could make us a less attractive
acquisition vehicle to a target business. Such warrants, when exercised, 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 may make
it more difficult to effectuate a business transaction or increase the cost of acquiring the target business.
Because each Unit contains one-third of
one Warrant and only a whole Warrant may be exercised, the Units may be worth less than units of other special purpose acquisition companies.
Each Unit contains one-third
of one Warrant. Pursuant to the warrant agreement, no fractional warrants were issued upon separation of the Units, and only whole Units
trade. If, upon exercise of the Warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise,
round down to the nearest whole number the number of Class A ordinary shares to be issued to the warrant holder. This is different from
other offerings similar to ours whose units include one ordinary 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 a business combination
since the Warrants will be exercisable in the aggregate for one-third of the number of shares compared to units that each contain a whole
warrant to purchase one 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 it included a warrant to purchase one whole share.
The grant of registration rights to our
initial shareholders and holders of our private placement warrants may make it more difficult to complete our initial business combination,
and the future exercise of such rights may adversely affect the market price of our Class A ordinary shares.
Pursuant to an agreement entered
into concurrently with the issuance and sale of the securities in the IPO, our initial shareholders and their permitted transferees can
demand that we register the Class A ordinary shares into which founder shares are convertible, holders of our private placement warrants
and their permitted transferees can demand that we register the private placement warrants and the Class A ordinary shares issuable upon
exercise of the private placement warrants, and holders of securities that may be issued upon conversion of working capital loans may
demand that we register such units, shares, warrants or the Class A ordinary shares issuable upon exercise of such warrants. We will bear
the cost of registering these securities. The registration and availability of such a significant number of securities for trading in
the public market may have an adverse effect on the market price of our Class A ordinary shares. In addition, the existence of the registration
rights may make our initial business combination more costly or difficult to conclude. This is because the shareholders of the target
business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact
on the market price of our Class A ordinary shares that is expected when the ordinary shares owned by our initial shareholders, holders
of our private placement warrants or holders of our working capital loans or their respective permitted transferees are registered.
You
will not be permitted to exercise your warrants unless we register and qualify the underlying Class A ordinary shares or certain exemptions
are available.
If
the issuance of the Class A ordinary shares upon exercise of the warrants is not registered, qualified or exempt from registration or
qualification under the Securities Act and applicable state securities laws, holders of warrants will not be entitled to exercise such
warrants and such warrants may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase
of Units will have paid the full Unit purchase price solely for the Class A ordinary shares included in the Units.
We
are not registering the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities
laws at this time. However, under the terms of the warrant agreement, we have agreed that, as soon as practicable, but in no event later
than 20 business days, after the closing of our initial business combination, we will use our best efforts to file with the SEC a registration
statement covering the registration under the Securities Act of the Class A ordinary shares issuable upon exercise of the warrants and
thereafter will use our best efforts to cause the same to become effective within 60 business days following our initial business combination
and to maintain a current prospectus relating to the Class A ordinary shares issuable upon exercise of the warrants until the expiration
of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for
example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or
prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop
order.
If
the Class A ordinary shares issuable upon exercise of the warrants are not registered under the Securities Act, under the terms of the
warrant agreement, holders of warrants who seek to exercise their warrants will not be permitted to do so for cash and, instead, will
be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another exemption.
In
no event will warrants be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking
to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws
of the state of the exercising holder, or an exemption from registration or qualification is available.
If
our Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they
satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act, we may, at our option, not permit
holders of warrants who seek to exercise their warrants to do so for cash and, instead, require them to do so on a cashless basis in
accordance with Section 3(a)(9) of the Securities Act; in the event we so elect, we will not be required to file or maintain in effect
a registration statement or register or qualify the shares underlying the warrants under applicable state securities laws, and in the
event we do not so elect, we will use our best efforts to register or qualify the shares underlying the warrants under applicable state
securities laws to the extent an exemption is not available.
In
no event will we be required to net cash settle any warrant, or issue securities (other than upon a cashless exercise) or other compensation
in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under the Securities
Act or applicable state securities laws.
You
may only be able to exercise your Warrants on a “cashless basis” under certain circumstances, and if you do so, you will
receive fewer Class A ordinary shares from such exercise than if you were to exercise such warrants for cash.
The
warrant agreement provides that in the following circumstances holders of warrants who seek to exercise their warrants will not be permitted
to do for cash and will, instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act:
(i) if the Class A ordinary shares issuable upon exercise of the warrants are not registered under the Securities Act in accordance with
the terms of the warrant agreement; (ii) if we have so elected and the Class A ordinary shares are at the time of any exercise of a warrant
not listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section
18(b)(1) of the Securities Act; and (iii) if we have so elected and we call the Warrants for redemption. If you exercise your Warrants
on a cashless basis under the circumstances described in clauses (i) and (ii) in the preceding sentence, you would pay the warrant exercise
price by surrendering the warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product
of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” of
our Class A ordinary shares (as defined in the next sentence) over the exercise price of the warrants by (y) the fair market value. The
“fair market value” is the average reported closing price of the Class A ordinary shares for the 10 trading day prior to
the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders
of warrants, as applicable. As a result, you would receive fewer Class A ordinary shares from such exercise than if you were to exercise
such warrants for cash.
GENERAL
RISK FACTORS
We
are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve
our business objective.
We
are a blank check company incorporated under the laws of the Cayman Islands. Because we lack an operating history, you have no basis
upon which to evaluate our ability to achieve our business objective of completing our initial business combination. 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.
Past
performance by our management team and their affiliates, including investments and transactions in which they have participated and businesses
with which they have been associated, may not be indicative of future performance of an investment in the Company.
Information
regarding our management team and their affiliates, including investments and transactions in which they have participated and businesses
with which they have been associated, is presented for informational purposes only. Any past experience and performance by our management
team and their affiliates and the businesses with which they have been associated, is not a guarantee that we will be able to successfully
identify a suitable candidate for our initial business combination, that we will be able to provide positive returns to our shareholders,
or of any results with respect to any initial business combination we may consummate. You should not rely on the historical experiences
of our management team and their affiliates, including investments and transactions in which they have participated and businesses with
which they have been associated, as indicative of the future performance of an investment in us or as indicative of every prior investment
by each of the members of our management team or their affiliates. No member of our management team has any experience in operating special
purpose acquisition companies. The market price of our securities may be influenced by numerous factors, many of which are beyond our
control, and our shareholders may experience losses on their investment in our securities.
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
may be a passive foreign investment company, or “PFIC,” which could result in adverse United States federal income tax consequences
to U.S. investors.
If
we are a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of our Class A ordinary
shares or warrants, the U.S. Holder may be subject to adverse United States federal income tax consequences and may be subject to additional
reporting requirements. Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up
exception. Depending on the particular circumstances the application of the start-up exception may be subject to uncertainty, and there
cannot be any assurance that we will qualify for the start-up exception. Accordingly, there can be no assurances with respect to our
status as a PFIC for our current taxable year or any subsequent taxable year. Our actual PFIC status for any taxable year, however, will
not be determinable until after the end of such taxable year. Moreover, if we determine we are a PFIC for any taxable year, upon written
request, we will endeavor to provide to a U.S. Holder such information as the Internal Revenue Service (“IRS”) may require,
including a PFIC annual information statement, in order to enable the U.S. Holder to make and maintain a “qualified electing fund”
election, but there can be no assurance that we will timely provide such required information, and such election would be unavailable
with respect to our warrants in all cases. We urge U.S. investors to consult their own tax advisors regarding the possible application
of the PFIC rules. For a more detailed explanation of the tax consequences of PFIC classification to U.S. Holders.
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 internal controls 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 Class A ordinary shares held by non-affiliates exceeds $700 million as of any June 30 before
that time, in which case we would no longer be an emerging growth company as of the following December 31. 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 an 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 exceeds $350 million as of the prior June 30, 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 prior June 30th.
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.
We
employ a mail forwarding service, which may delay or disrupt our ability to receive mail in a timely manner
Mail
addressed to the Company and received at its registered office will be forwarded unopened to the forwarding address supplied by Company
to be dealt with. None of the Company, its directors, officers, advisors or service providers (including the organization which provides
registered office services in the Cayman Islands) will bear any responsibility for any delay howsoever caused in mail reaching the forwarding
address, which may impair your ability to communicate with us.