ITEM
1. BUSINESS.
Introduction
We
are a newly incorporated 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”) of 32,500,000 (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 (which amount includes $11,375,000 of the underwriters’
deferred discount) 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 January 12, 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 January 12, 2023, subject to applicable law.
After
the payment of underwriting discounts and commissions (excluding the deferred portion of $11,375,000 in underwriting discounts
and commissions, which amount will be payable upon consummation of our initial business combination if consummated) and approximately
$516,778 in expenses relating to the Public Offering, $1,041,662 of the net proceeds of the Public Offering and 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. As of January 12, 2021 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, 2020, none of the funds had been withdrawn from the Trust Account to fund the Company’s working capital
expenses.
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 common stock, 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.
Prior
to the date of this Annual Report on Form 10-K, we filed a Registration Statement on Form 8-A with the SEC to voluntarily register
our securities under Section 12 of the Exchange Act. As a result, we are subject to the rules and regulations promulgated under
the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange
Act prior or subsequent to the consummation of our initial business combination.
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 initially in the amount of $325,000,000 (assuming no redemptions), after payment of
$11,375,000 of deferred underwriting fees, 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 common stock, 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:
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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
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cause
us to depend on the marketing and sale of a single product or limited number of products
or services.
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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:
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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);
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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
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The
issuance or potential issuance of ordinary shares will result in our undergoing a change
of control.
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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 public warrants in privately negotiated transactions or in the open market either prior to or
following the completion of our initial business combination. There is no limit on the number of shares our initial 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 public
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 public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any
matters submitted to the warrant holders for approval in connection with our initial business combination. Any such purchases
of our securities may result in the completion of our initial business combination that may not otherwise have been
possible.
In
addition, if such purchases are made, the public “float” of our Class A ordinary shares or public 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:
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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
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file
proxy materials with the SEC.
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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 would need 12,187,501, or 37.5%, of the 32,500,000 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:
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conduct
the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which
regulate issuer tender offers, and
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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.
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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 January 12, 2023 to complete our
initial business combination. If we are unable to complete our initial business combination by January 12, 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 January 12, 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.
Facilities
We
currently utilize office space at 1250 Prospect Street, Suite 200, La Jolla, CA 92037 from our sponsor and the members of our
management team as our executive offices. We consider our current office space adequate for our current operations.
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 20% of our issued and outstanding ordinary shares immediately following the completion of the IPO.
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 would
need 12,187,500, or 37.5%, of the 32,500,000 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 increase 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.
The
requirement that we complete our initial business combination within 24 months after the closing of the IPO 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 January 12, 2023. 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 within 24 months after the closing of the IPO, 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 within 24 months after the closing
of the IPO. 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 public 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 public 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 public 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 public warrants could be to reduce the
number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval
in connection with our initial business combination. Any such purchases of our securities may result in the completion of our
initial business combination that may not otherwise have been possible. 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 public 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 January
12, 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 January 12, 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.
Our Private Placement Warrants are accounted
for as liabilities and the changes in value of our Private Placement Warrants could have a material effect on our financial results.
On April 12, 2021, the
Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the
accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement
on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)”
(the “SEC Staff Statement”). Specifically, the SEC Staff Statement focused on certain settlement terms and provisions related
to certain tender offers following a business combination, which terms are deemed to be similar to those contained in the warrant agreement
governing our warrants and those of other SPAC entities. As a result of the SEC Staff Statement, we reevaluated the accounting treatment
of our Private Placement Warrants, and determined to reclassify the Private Placement Warrants as derivative liabilities measured at
fair value, with changes in fair value each period reported in earnings.
As a result, now included
on our balance sheet as of December 31, 2020 contained elsewhere in this Annual Report are derivative liabilities related to our Private
Placement Warrants. Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), provides for the remeasurement
of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the
fair value being recognized in earnings in the statement of operations in the period of change. As a result of this recurring fair value
measurement, our financial statements and results of operations may fluctuate quarterly, based on factors which are outside of our control.
Due to the recurring fair value measurement, we expect that we will recognize going forward non-cash gains or losses on our Private Placement
Warrants each reporting period until exercised and that the amount of such gains or losses could be material.
We have identified a material weakness
in our internal control over financial reporting as of December 31, 2020 solely related to the accounting for our Private Placement Warrants
in accordance with the guidance set forth in the SEC Staff Statement. If we are unable to develop and maintain an effective system of
internal control over financial reporting going forward, we may not be able to accurately report our financial results in a timely manner,
which may adversely effect investor confidence in us and materially and adversely affect our business and operating results.
Following the issuance
of the SEC Staff Statement on April 12, 2021, after consultation with our independent registered public accounting firm, our management
and our audit committee concluded that, in light of the SEC Staff Statement, it was appropriate for us to restate our previously issued
audited financial statements as of and for the period ended December 31, 2020. See “—Our Private Placement Warrants are accounted
for as liabilities and the changes in value of our Private Placement Warrants could have a material effect on our financial results.”
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is
a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected
and corrected on a timely basis. We have determined to classify this circumstance as a material weakness.
Effective internal controls
are necessary for us to provide reliable financial reports and prevent fraud. We have taken certain actions and continue to evaluate
steps to prevent as possible the necessity for restatements going forward. These remediation measures may be time consuming and costly,
and there is no assurance that these initiatives will ultimately have the intended effects. If we identify any new material weaknesses
in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts
or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable
to maintain compliance with securities law requirements regarding timely filing of periodic reports. In addition to applicable stock
exchange listing requirements, investors may in such event lose confidence in our financial reporting and our stock price may decline
as a result. We cannot assure that the measures we have taken to date, or any measures we may take in the future, will be sufficient
to avoid potential future material weaknesses.
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.
The restatement described
in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, the change in accounting for
our Private Placement Warrants, and other matters raised or that may in the future be raised by the SEC, we face potential for litigation
or other disputes which may include, among others, claims under federal and state securities laws, contractual claims or other claims
arising from the restatement and material weaknesses in our internal control over financial reporting and the preparation of our financial
statements. As of the date of this Amendment No. 1, 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 under the Investment Company Act, we may be required to institute burdensome compliance
requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If
we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions
on the nature of our investments; and
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restrictions
on the issuance of securities,
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each
of which may make it difficult for us to complete our initial business combination. In addition, we may have imposed upon us burdensome
requirements, including:
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registration
as an investment company with the SEC;
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adoption
of a specific form of corporate structure; and
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reporting,
record keeping, voting, proxy and disclosure requirements and other rules and regulations.
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In
order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we
must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our
activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting
more than 40% of our assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business
is to identify and complete a business combination and thereafter to operate the post-transaction business or assets for the long
term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated
businesses or assets or to be a passive investor.
We
do not believe that our principal activities subject us to the Investment Company Act. To this end, the proceeds held in the trust
account may only be invested in United States “government securities” within the meaning of Section 2(a)(16)
of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under
Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations.
Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment
of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long
term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid
being deemed an “investment company” within the meaning of the Investment Company Act. The trust account is intended
as a holding place for funds pending the earliest to occur of either: (i) the completion of our initial business combination;
(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 January 12, 2023 or (B) with respect to any other material provisions relating to shareholders’ rights
or pre-initial business combination activity; or (iii) absent an initial business combination by January 12, 2023, our return
of the funds held in the trust account to our public shareholders as part of our redemption of the public shares. If we do not
invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be
subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for
which we have not allotted funds and may hinder our ability to complete a business combination. If we are unable to complete our
initial business combination, our public shareholders may 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.
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 January 12, 2023, our public shareholders may be forced to wait
until January 12, 2023 before redemption from our trust account.
If
we are unable to consummate our initial business combination by January 12, 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 January 12, 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:
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may
significantly dilute the equity interest of investors in the IPO;
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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;
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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
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may
adversely affect prevailing market prices for our units, Class A ordinary shares
and/or warrants.
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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 January 12, 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:
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default
and foreclosure on our assets if our operating revenues after an initial business combination
are insufficient to repay our debt obligations;
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acceleration
of our obligations to repay the indebtedness even if we make all principal and interest
payments when due if we breach certain covenants that require the maintenance of certain
financial ratios or reserves without a waiver or renegotiation of that covenant;
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our
immediate payment of all principal and accrued interest, if any, if the debt security
is payable on demand;
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our
inability to obtain necessary additional financing if the debt security contains covenants
restricting our ability to obtain such financing while the debt security is outstanding;
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our
inability to pay dividends on our Class A ordinary shares;
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using
a substantial portion of our cash flow to pay principal and interest on our debt, which
will reduce the funds available for dividends on our Class A ordinary shares if
declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
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limitations
on our flexibility in planning for and reacting to changes in our business and in the
industry in which we operate;
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increased
vulnerability to adverse changes in general economic, industry and competitive conditions
and adverse changes in government regulation; and
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limitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions,
debt service requirements, execution of our strategy and other purposes and other disadvantages
compared to our competitors who have less debt.
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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 $333,500,000 that we may use to complete
our initial business combination (after taking into account the $11,375,000, of deferred underwriting commissions being held in
the trust account).
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:
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solely
dependent upon the performance of a single business, property or asset, or
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dependent
upon the development or market acceptance of a single or limited number of products,
processes or services.
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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 public 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 within 24 months
of the closing of the IPO 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 will collectively beneficially own 20% of our ordinary shares following the closing
of the IPO, 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 January 12, 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 20% 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 requires that we evaluate and report on our system of internal controls beginning with our Annual Report
on Form 10-K for the year ending December 31, 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:
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costs
and difficulties inherent in managing cross-border business operations;
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rules
and regulations regarding currency redemption;
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complex
corporate withholding taxes on individuals;
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laws
governing the manner in which future business combinations may be effected;
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exchange
listing and/or delisting requirements;
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tariffs
and trade barriers;
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regulations
related to customs and import/export matters;
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local
or regional economic policies and market conditions;
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unexpected
changes in regulatory requirements;
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challenges
in managing and staffing international operations;
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tax
issues, such as tax law changes and variations in tax laws as compared to the United States;
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currency
fluctuations and exchange controls;
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challenges
in collecting accounts receivable;
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cultural
and language differences;
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employment
regulations;
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underdeveloped
or unpredictable legal or regulatory systems;
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protection
of intellectual property;
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social
unrest, crime, strikes, riots and civil disturbances;
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regime
changes and political upheaval;
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terrorist
attacks and wars; and
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deterioration
of political relations with the United States.
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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
January 12, 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 January 12, 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:
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a
limited availability of market quotations for our securities;
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reduced
liquidity for our securities;
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a
determination that our Class A ordinary shares are a “penny stock” which
will require brokers trading in our Class A ordinary shares to adhere to more stringent
rules and possibly result in a reduced level of trading activity in the secondary trading
market for our securities;
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a
limited amount of news and analyst coverage; and
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a
decreased ability to issue additional securities or obtain additional financing in the
future.
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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:
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the
history and prospects of companies whose principal business is the acquisition of other
companies;
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prior
offerings of those companies;
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our
prospects for acquiring an operating business at attractive values;
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a
review of debt to equity ratios in leveraged transactions;
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an
assessment of our management and their experience in identifying operating companies;
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general
conditions of the securities markets at the time of the IPO; and
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other
factors as were deemed relevant.
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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 we are issuing 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 public warrants with the approval by the holders
of at least 50% of the then outstanding public 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 public warrants is required to make any change that adversely affects the interests of the registered
holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder of public
warrants if holders of at least 50% of the then outstanding public warrants approve of such amendment. Although our ability to
amend the terms of the public warrants with the consent of at least 50% of the then outstanding public warrants is unlimited,
examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, 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 upon separation of the
units, and only whole units will 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 public 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 public warrants for redemption. If you exercise your public 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.