ITEM 1. BUSINESS
Our Company
We are a blank check company
formed under the laws of the State of Delaware on March 18, 2021. We were formed for the purpose of effecting a merger, share exchange,
asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout
this Report as our initial business combination. Although there is no restriction or limitation on what industry our target operates in,
it is our intention to pursue prospective targets that are focused on blockchain infrastructure, blockchain applications, and related
technologies with an equity valuation ranging from $300 million to $3 billion. We anticipate targeting companies domiciled in
North America, Europe and/or Asia that are developing assets in the FinTech, MedTech, Internet of Things, Media, Education, Education,
Enterprise, and, Blockchain Enabled Verticals, which aligns with our management team’s experience in operating technology companies
and in financial/executive management.
Our Sponsors and Competitive Advantages
We believe that a high-quality management
team with extensive operational expertise in managing large and high growth businesses in technology-related industries is an attractive
format. It is particularly important that our management team has collectively built, managed, bought, and sold companies and technologies
all over the world.
Opportunity & Acquisition Target Criteria
We seek to acquire a business
that falls within the blockchain use case areas, that can enjoy the advantages of Blockchain applications and related technologies and
is an infrastructure company related to the global digital transition and innovation convergence. We believe that these industries are
attractive for a number of reasons, including: (i) they represent both large and addressable markets, which are characterized by
a high level of innovation and (ii) they include a large number of emerging high growth companies that are the right size as potential
targets.
Our operational experience
and industry contacts place us in a position to optimize our chances of identifying high value targets in these areas. While we remain
opportunistic at considering opportunities throughout the blockchain space, our primary focus will be on infrastructure companies with
one or more of the following characteristics:
| ● | Very late-stage development or revenue generating; |
| ● | High growth prospects with sustainable proprietary position; |
| ● | Experienced management teams with previous successes and known
for fostering entrepreneurial cultures; |
| ● | Addressable conditions that provide opportunities for innovation; |
| ● | Technology focused for innovative outcomes; |
| ● | Strategically-focused investors; or |
| ● | Independent companies or corporate spinoffs. |
We are not prohibited from
pursuing an initial business combination or subsequent transaction with a company that is affiliated with our advisors or our sponsor
officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor,
officers or directors, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent
valuation or accounting firm that such initial business combination or transaction is fair to our company from a financial point of view.
With respect to the forgoing
descriptions, past performance of our management team and members of our board of directors is not a guarantee either (1) of success
with respect to any business combination we may consummate or (2) that we will be able to identify a suitable candidate of our initial
business combination. You should not rely on the historic performance record of our management team or members of our board of directors
as indicative of our future performance. Our directors and executive officers may have conflicts of interest with other entities to which
they owe fiduciary or contractual obligations with respect to initial business combination opportunities. For a list of our directors
and executive officers and entities for which a conflict of interest may or does exist between such directors and officers and the company,
as well as the priority and preference that such entity has with respect to performance of obligations and presentation of business opportunities
to us, please refer to Management — Conflicts of Interest.
Our Acquisition Process
In evaluating a prospective
target business, we expect to conduct a thorough due diligence review that will encompass, among other things, meetings with incumbent
management and employees, document reviews, inspection of facilities, as well as a review of financial and other information that will
be made available to us. In conducting our due diligence review, we intend to leverage the experience of members of our management team,
directors, sponsors and advisors on an efficient and cost-effective basis as we deploy them to review matters related to their specific
areas of functional expertise.
Our Sponsor purchased 4,312,500 shares,
and certain members of our management team have financial interests in the Sponsor. Our Sponsor paid an aggregate of $25,000 for the founder
shares, or approximately $0.006 per founder share. As a result of the low acquisition cost of our founder shares, our sponsor, its affiliates
and our management team and directors could make a substantial profit even if we select and consummate an initial business combination
with an acquisition target that subsequently declines in value or is unprofitable for our public stockholders. Thus, such parties may
have more of an economic incentive for us to enter into an initial business combination with a riskier, weaker-performing or financially
unstable business, or an entity lacking an established record of revenues or earnings, than would be the case if such parties had paid
the full offering price for their founder shares. Additionally, members of our management team and our independent directors will directly
or indirectly own founder shares and/or private placement warrants following our initial public offering 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 target 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 other entities pursuant to which
such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers or
directors becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary
or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity.
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 business combination. Our amended and restated certificate of incorporation provides that we renounce our interest
in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in
his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to
undertake and would otherwise be reasonable for us to pursue.
Initial Business Combination
So long as we maintain a listing
for our securities on the Nasdaq Global Market (the “Nasdaq”), our initial business combination must be with one or more target
businesses that together have an aggregate fair market value equal to at least 80% of the value of the assets held in the trust account
(excluding taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection
with our initial business combination. If our board 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 an independent accounting
firm with respect to the satisfaction of such criteria. Additionally, pursuant to Nasdaq rules, any initial business combination must
be approved by a majority of our independent directors.
We will have until the end
of the combination period to consummate an initial business combination. We anticipate structuring our initial business combination so
that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or
assets of the target business or businesses. 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 stockholders or for other reasons. However, 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 of 1940, as amended,
or the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the
target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction company,
depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction
in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we
would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our
stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent
to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned
or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be
valued for purposes of the 80% of net assets test. 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 target businesses and we will treat the target businesses together as the
initial business combination for purposes of a tender offer or for seeking stockholder approval, as applicable.
Financial Position
With funds available for a
business combination initially in the amount of $176,837,500 assuming no redemptions, 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. This amount includes up to $6,037,500 of business combination marketing fee payable to I-Bankers and
Dawson James, collectively. 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.
Lack of Business Diversification
For an indefinite period of
time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance
of a single business.
Unlike other entities that
have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will
not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By completing our initial
business combination with only a single entity, our lack of diversification may:
| ● | subject us to negative economic, competitive and regulatory
developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial
business combination, and |
| ● | cause us to depend on the marketing and sale of a single product
or limited number of products or services. |
Limited ability to evaluate the target’s
management team
Although we intend to closely
scrutinize the management of a prospective target business when evaluating the desirability of effecting our business combination with
that business, our assessment of the target business’ management may not prove to be correct. In addition, the future management
may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of
our management team, if any, in the target business cannot presently be stated with any certainty. While it is possible that one or more
of our directors will remain associated in some capacity with us following our business combination, it is unlikely that any of them will
devote their full efforts to our affairs subsequent to our 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.
Stockholders may not have the ability to approve
our initial business combination
We may conduct redemptions
without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is required
by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons. Presented
in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval
is currently required under Delaware law for each such transaction.
|
Type of Transaction |
|
Whether
Stockholder
Approval is
Required |
| Purchase of assets |
|
No |
| Purchase of stock of target not involving a merger with the company |
|
No |
| Merger of target into a subsidiary of the company |
|
No |
| Merger of the company with a target |
|
Yes |
Under Nasdaq’s listing
rules, stockholder approval would be required for our initial business combination if, for example:
| ● | we issue shares of common stock that will be equal to or in
excess of 20% of the number of shares of our common stock then outstanding (other than in a public offering); |
| ● | any of our directors, officers or substantial stockholders
(as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or
indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of common stock could
result in an increase in outstanding common shares or voting power of 5% or more; or |
| ● | the issuance or potential issuance of common stock will result
in our undergoing a change of control. |
Permitted purchases of our securities
In the event we seek stockholder
approval of our business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender
offer rules, our initial stockholders, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions
or in the open market either prior to or following the completion of our initial business combination. 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 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. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record
holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. We have an
insider trading policy which that requires insiders to: (i) refrain from purchasing shares during certain blackout periods and when
they are in possession of any material non-public information and (ii) to clear all trades with our legal counsel prior to execution.
We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent
upon several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders
may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.
In the event that our initial
stockholders, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders
who have already elected to exercise their redemption rights, such selling stockholders 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 such purchases
would be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder
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 business combination, where it appears that such requirement would
otherwise not be met. This may result in the completion of our business combination that may not otherwise have been possible.
In addition, if such purchases
are made, the public “float” of our common stock 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 initial stockholders, officers,
directors and/or their affiliates anticipate that they may identify the stockholders with whom our initial stockholders, officers, directors
or their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption
requests submitted by stockholders following our mailing of proxy materials in connection with our initial business combination. To the
extent that our initial stockholders, officers, directors, advisors or their affiliates enter into a private purchase, they would identify
and contact only potential selling stockholders who have expressed their election to redeem their shares for a pro rata share of the trust
account or vote against the business combination. Our initial stockholders, officers, directors, advisors or their affiliates will only
purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.
Any purchases by our initial
stockholders, officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act
will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability
for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain
technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our initial stockholders,
officers, directors and/or their affiliates will not make purchases of common stock if the purchases would violate Section 9(a)(2) or
Rule 10b-5 of the Exchange Act.
Redemption Rights for Public Stockholders Upon
Completion of Our Initial Business Combination
We will provide our public
stockholders with the opportunity to redeem all or a portion of their shares of common stock upon the completion of our initial business
combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business
days prior to the consummation of the initial business combination, including interest (which interest shall be net of taxes payable)
divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account
is anticipated to be approximately $10.15 per public share. The per share amount we will distribute to stockholders who properly exercise
their redemption rights will not be reduced by the fee payable to I-Bankers and Dawson James pursuant to the business combination
marketing agreement. 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 business combination, although they will be entitled to liquidating distributions from the trust account with respect to any public
shares they hold if we fail to complete our initial business combination within the prescribed time frame.
Ability to Extend Time to Complete Business
Combination
We will have until the end
of the combination period to consummate our initial business combination. However, if we anticipate that we may not be able to consummate
our initial business combination within the combination period, we may, by resolution of our board if requested by our sponsor, extend
the period of time to consummate a business combination up to two times, each by an additional three months, subject to the sponsor
depositing additional funds into the trust account as set out below. Pursuant to the terms of the trust agreement to be entered into between
us and Continental Stock Transfer & Trust Company, LLC, in order to extend the time available for us to consummate our initial
business combination, our initial shareholders or their affiliates or designees, upon five days advance notice prior to the applicable
deadline, must deposit into the trust account for each three-month extension, $1,725,000 ($0.10 per share in either case) on or prior
to the date of the applicable deadline, up to an aggregate of $3,450,000, or approximately $0.20 per share. Any such payments would be
made in the form of a loan. Any such loans will be non-interest bearing and payable upon the consummation of our initial business
combination. If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account
released to us. If we do not complete a business combination, we will not repay such loans. Furthermore, the letter agreement with our
initial stockholders contains a provision pursuant to which our sponsor has agreed to waive its right to be repaid for such loans out
of the funds held in the trust account in the event that we do not complete a business combination. In the event that we receive notice
from our sponsor five days prior to the applicable deadline of its wish for us to effect an extension, we intend to issue a press
release announcing such intention at least three days prior to the applicable deadline. In addition, we intend to issue a press release
the day after the applicable deadline announcing whether or not the funds had been timely deposited. Our sponsor and its affiliates
or designees are not obligated to fund the trust account to extend the time for us to complete our initial business combination. If we
choose to extend the period of time to consummate a business combination as set forth herein, you will not have the ability to vote or
redeem your shares of common stock in connection with either of the three-month extensions. However, if we seek to complete a business
combination during an extension period, investors will still be able to vote and redeem their shares of common stock in connection with
that business combination.
Manner of Conducting Redemptions
We will provide our public
stockholders with the opportunity to redeem all or a portion of their shares of common stock upon the completion of our initial business
combination either (i) in connection with a stockholder meeting called to approve the business combination or (ii) by means
of a tender offer. The decision as to whether we will seek stockholder 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 stockholder approval under the law or stock exchange listing requirement.
Under Nasdaq rules, asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with
our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend
our amended and restated certificate of incorporation would require stockholder approval. We may conduct redemptions without a stockholder
vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirement
or we choose to seek stockholder approval for business or other legal reasons. So long as we obtain and maintain a listing for our securities
on Nasdaq, we would be required to comply with such rules.
If a stockholder vote is not
required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated
certificate of incorporation:
| ● | conduct the redemptions pursuant to Rule 13e-4 and
Regulation 14E of the Exchange Act, which regulate issuer tender offers, and |
| ● | file tender offer documents with the SEC prior to completing
our initial business combination which contain substantially the same financial and other information about the initial business combination
and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. |
Upon the public announcement
of our initial business combination, we or our initial stockholders will terminate any plan established in accordance with Rule 10b5-1 to
purchase shares of our common stock in the open market if we elect to redeem our public shares through a tender offer, to comply with
Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions
pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under
the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer
period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public
shares which are not purchased by our initial stockholders, which number will be based on the requirement that we may not redeem public
shares in an amount that would cause our net tangible assets to be less than $5,000,001 both immediately before and after the consummation
of our initial business combination (so that we are not subject to the SEC’s “penny stock” rules) or any greater net
tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders
tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
If, however, stockholder approval
of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder approval for business
or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:
| ● | conduct the redemptions in conjunction with a proxy solicitation
pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender
offer rules, and |
| ● | file proxy materials with the SEC. |
In the event that we seek stockholder
approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public stockholders
with the redemption rights described above upon completion of the initial business combination.
If we seek stockholder approval,
we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor
of the business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding
capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled
to vote at such meeting. Our sponsor, executive officers and directors will count toward this quorum and have agreed to vote their founder
shares and any public shares purchased during or after our initial public offering in favor of our initial business combination. These
quorum and voting thresholds, and the voting agreements of our sponsor, executive officers and directors may make it more likely that
we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares irrespective of whether
they vote for or against the proposed transaction. In addition, 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 public shares in
connection with the completion of a business combination.
Our amended and restated certificate
of incorporation 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 both immediately before and after the consummation of our initial business combination (so that we are not subject
to the SEC’s “penny stock” rules). Redemptions of our public shares may also be subject to a higher net tangible asset
test or cash requirement pursuant to an agreement relating to our initial business combination. For example, the proposed business combination
may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working
capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms
of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all shares of common
stock 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, and all shares of common stock submitted for redemption will be returned to the holders thereof.
Limitation on redemption upon completion of
our initial business combination if we seek stockholder approval
Notwithstanding the foregoing,
if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business
combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder,
together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group”
(as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to Excess
Shares. We believe this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by
such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us,
our initial stockholders or our management to purchase their shares at a significant premium to the then-current market price or
on other undesirable terms. Absent this provision, a public stockholder holding an aggregate of 15% or more of the shares sold in our
initial public offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us, our initial
stockholders or our management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’
ability to redeem to less than 15% of the shares sold in our initial public offering, we believe we will limit the ability of a small
group of stockholders to unreasonably attempt to block our ability to complete our 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 stockholders’ ability to vote all of their shares (including Excess Shares) for or against
our business combination.
Tendering stock certificates in connection
with a tender offer or redemption rights
We may require our public stockholders
seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either
tender their certificates to our transfer agent prior to the date set forth in the tender offer documents mailed to such holders, or up
to two business days prior to the vote on the proposal to approve the business combination in the event we distribute proxy materials,
or to deliver their shares to the transfer agent electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian)
System, at the holder’s option. The tender offer or proxy materials, 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 stockholders to satisfy such
delivery requirements. Accordingly, a public stockholder would have from the time we send out our tender offer materials until the close
of the tender offer period, or up to two business days prior to the vote on the business combination if we distribute proxy materials,
as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short exercise period,
it is advisable for stockholders to use electronic delivery of their public shares.
There is a nominal cost associated
with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The
transfer agent will typically charge the tendering broker and it would be up to the broker whether or not to pass the cost on to the redeeming
holder. However, the fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender
their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery
must be effectuated.
The foregoing is different
from the procedures used by some blank check companies. In order to perfect redemption rights in connection with their business combinations,
many blank check companies would distribute proxy materials for the stockholders’ vote on an initial business combination, and a
holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking
to exercise his or her redemption rights. After the business combination was approved, the company would contact such stockholder to arrange
for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder then had an “option window”
after the completion of the business combination during which he or she could monitor the price of the company’s stock in the market.
If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his
or her shares to the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit
before the stockholder meeting, would become “option” rights surviving past the completion of the business combination until
the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that
a redeeming holder’s election to redeem is irrevocable once the business combination is approved.
Any request to redeem such
shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials or the date of the stockholder
meeting set forth in our proxy materials, as applicable. Furthermore, if a holder of a public share delivered its certificate in connection
with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such
holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds
to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of
our initial business combination.
If our initial business combination
is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be
entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates
delivered by public holders who elected to redeem their shares.
If our initial business combination
is not completed, we may continue to try to complete a business combination with a different target until the end of the combination period.
Redemption of public shares and liquidation
if no initial business combination
We will have only until the
end of the combination period to complete our initial business combination. If we are unable to complete our initial business combination
within such combination period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as
reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay
dissolution expenses, which interest shall be net of taxes payable) divided by the number of then outstanding public shares, which redemption
will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval
of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware
law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating
distributions with respect to our rights and warrants, which will expire worthless if we fail to complete our initial business combination
within the combination period.
Our initial stockholders have
agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete
our initial business combination within the combination period. However, if our initial stockholders acquire public shares in or after
our initial public offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares
if we fail to complete our initial business combination within the allotted combination period.
Our sponsor, officers and directors
have agreed, pursuant to a written letter agreement with us, that they will not propose any amendment to our amended and restated certificate
of incorporation that would affect (i) the substance or timing of our obligation to redeem 100% of our public shares if we do not
complete our initial business combination within the combination period or (ii) with respect to any other provision relating to stockholders’
rights or pre-business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares
of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on
deposit in the trust account, including interest (which interest shall be net of taxes payable) divided by the number of then outstanding
public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001
both immediately before and after the consummation of our initial business combination (so that we are not subject to the SEC’s
“penny stock” rules). If this optional redemption right is exercised with respect to an excessive number of public shares
such that we cannot satisfy the net tangible asset requirement (described above), we would not proceed with the amendment or the related
redemption of our public shares at such time.
We expect that all costs and
expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining
out of the proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose.
However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the
extent that there is any interest accrued in the trust account not required to pay taxes, we may request the trustee to release to us
an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of
the net proceeds of our initial public offering and the private placement, other than the proceeds deposited in the trust account, and
without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by stockholders
upon our dissolution would be approximately $10.15. The proceeds deposited in the trust account could, however, become subject to the
claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual
per-share redemption amount received by stockholders will not be substantially less than $10.15. Under Section 281(b) of
the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made
in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our
remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient
to pay or provide for all creditors’ claims.
Although we will seek to have
all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements with us waiving
any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders,
there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from
bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other
similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect
to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving
such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will
only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement
would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that
refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management
to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable
to find a service provider willing to execute a waiver. 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. In order to protect the amounts held in the trust account, our sponsor has agreed that
it will be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target
business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below
(i) $10.15 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation
of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn
to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account
and except as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including
liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, then our
sponsor will not be responsible to the extent of any liability for such third-party claims. We have not asked our sponsor to reserve
for such indemnification obligations, and 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. We believe the likelihood of our sponsor having to indemnify the trust account
is limited because we will endeavor to have all vendors and prospective target businesses as well as other entities execute agreements
with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account.
In the event that the proceeds
in the trust account are reduced below (i) $10.15 per public share or (ii) such lesser amount per public share held in the trust
account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the
amount of interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its indemnification obligations
or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take
legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors
would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent
directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you
that due to claims of creditors the actual value of the per-share redemption price will not be substantially less than $10.15 per
share.
We will seek to reduce the
possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service
providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title,
interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims under our
indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act.
We will not have significant funds remaining from the proceeds of our initial public offering with which to pay any such potential claims
(including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000).
In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders
who received funds from our trust account could be liable for claims made by creditors.
Under the DGCL, stockholders
may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution.
The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event
we do not complete our initial business combination within the combination period may be considered a liquidation distribution under Delaware
law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable
provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against
the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting
period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution
is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any
liability of the stockholder would be barred after the third anniversary of the dissolution.
Furthermore, if the pro rata
portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete
our initial business combination within the combination period, is not considered a liquidation distribution under Delaware law and such
redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due
to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims
of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a
liquidation distribution. If we are unable to complete our initial business combination within the combination 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 (net of the amount of interest which may be withdrawn to pay taxes, and less up to $100,000 of interest
to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public
stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable
law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders
and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of
creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably
possible following the end of the combination period and, therefore, we do not intend to comply with those procedures. As such, our stockholders
could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders
may extend well beyond the third anniversary of such date.
Because we will not be complying
with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that
will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent
10 years. However, because we are a blank check company, rather than an operating company, and our operations will be limited to
searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment
bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement,
we will seek to have all vendors, service providers, prospective target businesses or other entities with which we do business execute
agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account.
As a result of this obligation,
the claims that could be made against us are significantly limited and the likelihood that any claim that would result in any liability
extending to the trust account is remote. Further, our sponsor may be liable only to the extent necessary to ensure that the amounts in
the trust account are not reduced below (i) $10.15 per public share or (ii) such lesser amount per public share held in the
trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net
of the amount of interest withdrawn to pay taxes, and will not be liable as to any claims under our indemnity of the underwriters of our
initial public offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver
is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims.
If we file a bankruptcy petition
or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject
to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over
the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to
return $10.15 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition
is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor
and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy
court could seek to recover some or all amounts received by our stockholders. Furthermore, our board may be viewed as having breached
its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive
damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims
will not be brought against us for these reasons.
Our public stockholders will
be entitled to receive funds from the trust account only upon the earliest to occur of: (i) the completion of our initial business
combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended
and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares
if we do not complete our initial business combination within the combination period or (B) with respect to any other provision relating
to stockholders’ rights or pre-business combination activity, and (iii) the redemption of all of our public shares if
we are unable to complete our initial business combination within the combination period, subject to applicable law. In no other circumstances
will a stockholder have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval in connection
with our initial business combination, a stockholder’s voting in connection with the business combination alone will not result
in a stockholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such stockholder must have
also exercised its redemption rights described above.
Employees
We currently have two executive
officers. Members of our management team are not obligated to devote any specific number of hours to our matters but they intend
to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount
of time that any member of our management team will devote in any time period will vary based on whether a target business has been selected
for our initial business combination and the current stage of the business combination process.
Periodic Reporting and Financial Information
We have registered our common
stock, rights, and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual,
quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will
contain financial statements audited and reported on by our independent registered public auditors.
We will provide stockholders
with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials
sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared
in accordance with GAAP. We cannot assure you that any particular target business identified by us as a potential acquisition candidate
will have financial statements prepared in accordance with GAAP or that the potential target business will be able to prepare its financial
statements in accordance with GAAP. To the extent that this requirement cannot be met, we may not be able to acquire the proposed
target business. While this may limit the pool of potential acquisition candidates, we do not believe that this limitation will be material.
We will be required to evaluate
our internal control procedures for the fiscal year ending December 31, 2022 as required by the Sarbanes-Oxley Act. Only in
the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to have our internal control procedures
audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal
controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase
the time and costs necessary to complete any such acquisition.
We are an “emerging growth
company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take
advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging
growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404
of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,
and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of
any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be
a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107
of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided
in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging
growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion
of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which
we are deemed to be a large accelerated filer, which means the market value of our common stock 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 $1.00 billion
in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company”
shall have the meaning associated with it in the JOBS Act.
ITEM 1A. RISK FACTORS
Summary of Risk Factors
An investment in our securities
involves a high degree of risk. The occurrence of one or more of the events or circumstances described in the section titled “Risk
Factors,” alone or in combination with other events or circumstances, may materially adversely affect our business, financial condition
and operating results. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.
Such risks include, but are not limited to:
| ● | We may not be able to complete
the Business Combination pursuant to the Merger Agreement. If we are unable to do so, we will incur substantial costs associated with
withdrawing from the transaction and may not be able to find additional sources of financing to cover those costs |
| ● | Our public stockholders 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
stockholders do not support such a combination. |
| |
● |
Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a going concern, since we will cease all operations except for the purpose of liquidating if we are unable to complete an initial business combination by Extension Date; |
| ● | If we seek stockholder approval
of our initial business combination, our sponsor, officers and directors have agreed to vote in favor of such initial business combination,
regardless of how our public stockholders vote. |
| ● | Your only opportunity to affect
the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares
from us for cash, unless we seek stockholder approval of the business combination. |
| ● | The ability of our public stockholders
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. |
| ● | The ability of our public stockholders
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. |
| ● | The ability of our public stockholders
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 stock. |
| ● | The requirement that we complete
our initial business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating
a business combination and may decrease our ability to conduct due diligence on potential business combination targets as we approach
our dissolution deadline, which could undermine our ability to complete our business combination on terms that would optimize value for
our stockholders. |
| ● | We may not be able to complete
our initial business combination within the prescribed time frame, in which case we would cease all operations except for the purpose
of winding up and we would redeem our public shares and liquidate. |
| ● | If a stockholder fails to receive
notice of our offer to redeem our public shares in connection with our business combination, or fails to comply with the procedures for
tendering its shares, such shares may not be redeemed. |
| ● | If we seek stockholder 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 stockholders are deemed to hold 15% or more of our common stock, you will lose the ability to redeem all such shares equal to or in
excess of 15% of our common stock. |
| |
● |
We are
exposed to volatility in the banking market. At various times, we could have deposits with certain U.S. banks in excess of the maximum
amounts insured by the U.S. Federal Deposit Insurance Corporation (“FDIC”). As of December 31, 2022, we held no cash
with Silicon Valley Bank. |
| ● | We are not required to obtain
an opinion from an independent investment banking firm or from an independent accounting 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 company from a financial point of view. |
| ● | 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, executive
officers and directors which may raise potential conflicts of interest. |
| ● | We will likely only be able
to complete one business combination with the proceeds of our initial public offering and the sale of the private placement warrants,
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. |
| ● | As the number of special purpose
acquisition companies evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive
target businesses. This could increase the cost of our initial business combination and could even result in our inability to find a
suitable target business or to consummate an initial business combination. |
| ● | Changes in the market for directors
and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business
combination. |
| ● | We may issue our shares to investors
in connection with our initial business combination at a price that is less than the prevailing market price of our shares at that time. |
| ● | Our executive 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. |
| ● | Certain of our executive officers
and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those
intended to be conducted by us following our initial business combination and, accordingly, may have conflicts of interest in determining
to which entity a particular business opportunity should be presented. |
| ● | Since our initial stockholders,
including our sponsor, executive 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. |
| ● | Because each unit contains one
right and one-half of one redeemable warrant, and only a whole warrant may be exercised, the units may be worth less than units
of other blank check companies. |
| ● | We are not registering the shares
of common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration
may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants
except on a cashless basis and potentially causing such warrants to expire worthless. |
| ● | Our initial stockholders paid
an aggregate of $25,000, or approximately $0.005 per founder share, and, accordingly, you will experience immediate and substantial dilution
from the purchase of our common stock. |
| ● | Provisions in our amended and
restated certificate of incorporation and Delaware law may have the effect of discouraging lawsuits against our directors and officers. |
Risks Relating to Our Search For, Consummation
of, or Inability to Consummate, a Business Combination
As the number of special purpose acquisition
companies evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive target
businesses. This could increase the cost of our initial business combination and could even result in our inability to find a suitable
target business or to consummate an initial business combination.
In recent years, the number
of special purpose acquisition companies that have been formed has increased substantially. Many potential target businesses for blank
check companies have already entered into an initial business combination, and there are still many blank check companies preparing and
seeking target businesses for an initial public offering, as well as many such companies currently in registration. As a result, at times,
fewer attractive targets may be available, and it may require more time, more effort and more resources to identify a suitable target
and to consummate an initial business combination.
In addition, because there
are more blank check companies seeking to enter into an initial business combination with available targets businesses, the competition
for available target businesses with attractive fundamentals or business models may increase, which could cause targets businesses to
demand improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns,
geopolitical tensions, or increases in the cost of additional capital needed to close business combinations or operate target businesses
post-business combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find and consummate
an initial business combination, and may result in our inability to consummate an initial business combination on terms favorable to our
investors altogether.
We would be subject to a second level of U.S. federal
income tax on a portion of our income if we are determined to be a personal holding company (a “PHC”) for U.S. federal
income tax purposes.
A U.S. corporation generally
will be classified as a PHC for U.S. federal income tax purposes in a given taxable year if (i) at any time during the last
half of such taxable year, five or fewer individuals (without regard to their citizenship or residency and including as individuals for
this purpose certain entities such as certain tax exempt organizations, pension funds and charitable trusts) own or are deemed to own
(pursuant to certain constructive ownership rules) more than 50% of the stock of the corporation by value and (ii) at least 60% of
the corporation’s adjusted ordinary gross income, as determined for U.S. federal income tax purposes, for such taxable year
consists of PHC income (which includes, among other things, dividends, interest, certain royalties, annuities and, under certain circumstances,
rents).
Depending on the date and size
of our initial business combination, at least 60% of our adjusted ordinary gross income may consist of PHC income as discussed above.
In addition, depending on the concentration of our stock in the hands of individuals, including the members of our sponsor and certain
tax-exempt organizations, pension funds and charitable trusts, more than 50% of our stock may be owned or deemed owned (pursuant
to the constructive ownership rules) by five or fewer such persons during the last half of a taxable year. Thus, no assurance can be given
that we will not become a PHC following our initial public offering or in the future. If we are or were to become a PHC in a given taxable
year, we would be subject to an additional PHC tax, currently 20%, on our undistributed PHC income, subject to certain adjustments.
Changes in the market for directors and officers
liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination.
In recent months, the
market for directors and officers liability insurance for blank check companies has changed in ways adverse to us and our officers and
directors. Fewer insurance companies are offering quotes for directors and officers liability coverage, the premiums charged for such
policies have generally increased and the terms of such policies have generally become less favorable. These trends may continue into
the future.
The increased cost and decreased
availability of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and consummate
an initial business combination. In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming
a public company, the post-business combination entity might need to incur greater expense, accept less favorable terms or both.
However, any failure to obtain adequate directors and officers liability insurance could have an adverse impact on the post-business combination
entity’s ability to attract and retain qualified officers and directors.
In addition, even after we
were to complete an initial business combination, our directors and officers could still be subject to potential liability from claims
arising from conduct alleged to have occurred prior to the initial business combination. As a result, in order to protect our directors
and officers, the post-business combination entity may need to purchase additional insurance with respect to any such claims (“run-off insurance”).
The need for run off insurance would be an added expense for the post-business combination entity, and could interfere with or frustrate
our ability to consummate an initial business combination on terms favorable to our stockholders.
We may issue our shares to investors in connection
with our initial business combination at a price that is less than the prevailing market price of our shares at that time.
In connection with our initial
business combination, we may issue shares to investors in private placement transactions (so-called PIPE transactions) at a price
of $10.15 per share or which approximates the per-share amounts in our trust account at such time, which is generally approximately
$10.15. The purpose of such issuances will be to enable us to provide sufficient liquidity to the post-business combination entity.
The price of the shares we issue may therefore be less, and potentially significantly less, than the market price for our shares at such
time.
Our public stockholders 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 stockholders do not support
such a combination.
We may not hold a stockholder
vote to approve our initial business combination unless the business combination would require stockholder approval under applicable state
law or the rules of Nasdaq or if we decide to hold a stockholder vote for business or other reasons. For instance, the Nasdaq rules currently
allow us to engage in a tender offer in lieu of a stockholder meeting but would still require us to obtain stockholder approval if we
were seeking to issue more than 20% of our outstanding shares to a target business as consideration in any business combination. Therefore,
if we were structuring a business combination that required us to issue more than 20% of our outstanding shares, we would seek stockholder
approval of such business combination. However, except for as required by law, the decision as to whether we will seek stockholder approval
of a proposed business combination or will allow stockholders 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 stockholder approval. Even if we seek stockholder approval, the holders of our founder shares will
participate in the vote on such approval. Accordingly, we may consummate our initial business combination even if holders of a majority
of the outstanding shares of our common stock do not approve of the business combination we consummate.
If we seek stockholder approval of our initial
business combination, our sponsor, officers and directors have agreed to vote in favor of such initial business combination, regardless
of how our public stockholders vote.
Unlike many other blank check
companies, in which the initial stockholders agree to vote their founder shares in accordance with the majority of the votes cast by the
public stockholders in connection with an initial business combination, our sponsor, officers and directors have agreed to vote their
founder shares, as well as any public shares purchased during or after our initial public offering (including in open market and privately
negotiated transactions), in favor of our initial business combination. Our sponsor owns 19.6% of our outstanding shares of common stock.
As a result, in addition to the founder shares, we would need only 6,693,751, or 38.8%, of the 17,250,000 public shares sold in our initial
public offering to be voted in favor of a transaction (assuming all outstanding shares are voted) in order to have our initial business
combination approved. Furthermore, assuming only the minimum number of stockholders required to be present at the stockholders’
meeting held to approve our initial business combination are present at such meeting, we would need only 1,190,627 of the 17,250,000 public
shares, or approximately 6.9% of the shares sold as part of the units in our initial public offering, to be voted in favor of our initial
business combination in order to have such transaction approved. In addition, in the event that our board of directors amends our bylaws
to reduce the number of shares required to be present at a meeting of our stockholders, we would need even fewer public shares to be voted
in favor of our initial business combination to have such transaction approved.
Accordingly, if we seek stockholder
approval of our initial business combination, it is more likely that the necessary stockholder approval will be received than would be
the case if our initial stockholders agreed to vote their shares in accordance with the majority of the votes cast by our public stockholders.
Your only opportunity to affect the investment
decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash,
unless we seek stockholder approval of the business combination.
At the time of your investment
in us, you may not be provided with an opportunity to evaluate the specific merits or risks of one or more target businesses. Since our
board of directors may complete a business combination without seeking stockholder approval, public stockholders may not have the right
or opportunity to vote on the business combination, unless we seek such stockholder vote. Accordingly, if we do not seek stockholder approval,
your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption
rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our
public stockholders in which we describe our initial business combination.
The ability of our public stockholders to redeem
their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult
for us to enter into a business combination with a target.
We may seek to enter into a
business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth
or a certain amount of cash 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) retention of cash to satisfy other obligations. If too many public stockholders 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. The amount of the business combination marketing fee payable to I-Bankers and Dawson James will not be adjusted for
any shares that are redeemed in connection with a business combination and such amount of business combination marketing fee is not available
for us to use as consideration in an initial 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 both immediately before and after the consummation of our initial
business combination (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset
or cash requirement which may be contained in the agreement relating to our initial business combination. Consequently, if accepting all
properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 both immediately before and after
the consummation of our initial business combination or such greater amount necessary to satisfy a closing 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.
If we are able to consummate an initial business combination, the per-share value of shares held by non-redeeming stockholders
will reflect our obligation to pay the business combination marketing fee.
Our sponsor may decide not to extend the term
we have to consummate our initial business combination, in which case we would cease all operations except for the purpose of winding
up and we would redeem our public shares and liquidate, and the rights will be worthless.
We will have until the end
of the combination period to consummate an initial business combination. However, if we anticipate that we may not be able to consummate
our initial business combination within the combination period, we may extend the period of time to consummate a business combination
up to two times, each by an additional three months (for a total of up to 21 months to complete a business combination). Pursuant
to the terms of our amended and restated certificate of incorporation and the trust agreement entered into between us and Continental
Stock Transfer & Trust Company on the date of our IPO, in order to extend the time available for us to consummate our initial business
combination, our sponsor or its affiliates or designees, upon five days advance notice prior to the applicable deadline, must deposit
into the trust account $1,725,000 ($0.10 per share) on or prior to the date of the applicable deadline, for each three month extension
(or up to an aggregate of $3,450,000, or $0.20 per share, if we extend for the full six months). Any such payments would be made in the
form of a loan. Any such loans will be non-interest bearing and payable upon the consummation of our initial business combination.
If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account released
to us. If we do not complete a business combination, we will not repay such loans. Furthermore, the letter agreement with our initial
stockholders contains a provision pursuant to which our sponsor has agreed to waive its right to be repaid for such loans out of the funds
held in the trust account in the event that we do not complete a business combination.
Our sponsor and its affiliates
or designees are not obligated to fund the trust account to extend the time for us to complete our initial business combination. If we
are unable to consummate our initial business combination within the applicable time period, we will, as promptly as reasonably possible
but not more than ten business days thereafter, redeem the public shares for a pro rata portion of the funds held in the trust account
and as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board
of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and
the requirements of other applicable law. In such event, the rights will be worthless.
The ability of our public stockholders 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 stockholders 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 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 is submitted for redemption than we initially expected,
we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third party financing.
Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable
levels. The amount of the business combination marketing fee payable to I-Bankers and Dawson James will not be adjusted for
any shares that are redeemed in connection with an initial business combination. The above considerations may limit our ability to complete
the most desirable business combination available to us or optimize our capital structure, or may incentivize us to structure a transaction
whereby we issue shares to new investors and not to sellers of target businesses.
The ability of our public stockholders 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 stock.
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 stock in the open market; however, at such time our stock may trade
at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment
or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your stock in the open
market.
The requirement that we complete our initial
business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating a business
combination and may decrease our ability to conduct due diligence on potential business combination targets as we approach our dissolution
deadline, which could undermine our ability to complete our business combination on terms that would optimize value for our stockholders.
Any potential target business
with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination
within the combination period. 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 the prescribed time frame, in which case we would cease all operations except for the purpose of winding up
and we would redeem our public shares and liquidate.
We must complete our initial
business combination within the combination period. Our ability to complete our initial business combination may be negatively impacted
by general market conditions, volatility in the capital and debt markets and the other risks described herein. For example, the conflict
between Ukraine and Russia continues to grow and, while the extent of the impact of the conflict 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.
We may not be able to find a suitable target business and complete our initial business combination within such time period. 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
(which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses) divided by the number
of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including
the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject
in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
If we seek stockholder approval of our initial
business combination, our initial stockholders, directors, executive officers, advisors and their affiliates may elect to purchase shares
from public stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of our
common stock.
If we seek stockholder approval
of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender
offer rules, our initial stockholders, directors, executive officers, advisors or their affiliates may purchase shares in privately negotiated
transactions or in the open market either prior to or following the completion of our initial business combination, although they are
under no obligation to do so. 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
rights in such transactions. Such a purchase may include a contractual acknowledgement that such stockholder, 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 initial stockholders, directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions
from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to
revoke their prior elections to redeem their shares. The purpose of such purchases could be to vote such shares in favor of the business
combination and thereby increase the likelihood of obtaining stockholder 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
business combination, where it appears that such requirement would otherwise not be met. This may result in the completion of a business
combination that may not otherwise have been possible. 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 common stock and the number of beneficial holders of our securities may be reduced, possibly
making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
If a stockholder fails to receive notice of
our offer to redeem our public shares in connection with our business combination, or fails to comply with the procedures for tendering
its shares, such shares may not be redeemed.
We will comply with the tender
offer rules or proxy rules, as applicable, when conducting redemptions in connection with our business combination. Despite our compliance
with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not become
aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that we will
furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that
must be complied with in order to validly tender or redeem public shares. In the event that a stockholder fails to comply with these procedures,
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 our
initial public offering and the sale of the private placement warrants are intended to be used to complete an initial business combination
with a target business that has not been identified, we may be deemed to be a “blank check” company under the United States
securities laws. However, because we have net tangible assets in excess of $5,000,000 and have 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, we will have a longer period of time to complete our business combination than do companies subject to Rule 419. Moreover,
if our initial public offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held
in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an
initial business combination.
If we seek stockholder 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 stockholders
are deemed to hold 15% or more of our common stock, you will lose the ability to redeem all such shares equal to or in excess of 15% of
our common stock.
If we seek stockholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate
of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under
Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to an aggregate of 15% or more
of the shares sold in our initial public offering, which we refer to as the “Excess Shares.” However, we would not be restricting
our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our business combination. Your inability
to redeem the Excess Shares will reduce your influence over our ability to complete our 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 business combination. And as a result, you will continue to hold that number of shares
equal to or exceeding 15% and, in order to dispose of such shares, would be required to sell your stock 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 stockholders may receive only approximately $10.15 per share, on our
redemption, and our rights and warrants will expire worthless.
We expect to encounter intense
competition from other entities having a business objective similar to ours, including private investors (which may be individuals or
investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses
we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and
effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors
possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively
limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially
acquire with the net proceeds of our initial public offering and the sale of the private placement warrants, our ability to compete with
respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent
competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, if we are obligated
to pay cash for the shares of common stock redeemed and, in the event we seek stockholder approval of our business combination, we make
purchases of our common stock, the resources available to us for our initial business combination will potentially be reduced. 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 stockholders may receive only approximately $10.15 per share on the liquidation of our trust
account and our rights and warrants will expire worthless.
If the net proceeds of our initial public offering
and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for at least
the duration of the combination period, we may be unable to complete our initial business combination.
The funds available to us outside
of the trust account may not be sufficient to allow us to operate for at least the duration of the combination period, assuming that our
initial business combination is not completed during that time. We believe that the funds available to us outside of the trust account
will be sufficient to allow us to operate for at least the duration of the combination period; 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 designed to keep target businesses from “shopping” around for transactions with
other companies on terms more favorable to such target businesses) with respect to a particular proposed business combination, although
we do not have any current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity
from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might
not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business. If we are unable to
complete our initial business combination, our public stockholders may receive only approximately $10.15 per share on the liquidation
of our trust account and our rights and warrants will expire worthless.
If the net proceeds of our initial public offering
and the sale of the private placement warrants not being held in the trust account are insufficient, 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 initial stockholders or management team to fund our search, to pay our taxes and to complete our business combination.
Of the net proceeds of our
initial public offering and the sale of the private placement warrants, only approximately $765,243 is available to us outside the trust
account to fund our working capital requirements. If we are required to seek additional capital, we would need to borrow funds from our
initial stockholders, management team or other third parties to operate or may be forced to liquidate. None of our initial stockholders,
members of our management team or 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 working capital loans may be convertible into private placement-equivalent warrants at a price
of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants, including as to
exercise price, exercisability and exercise period of the underlying warrants. We do not expect to seek loans from parties other than
our initial stockholders or an affiliate of our initial stockholders 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 stockholders may only receive approximately $10.15 per share on our redemption of our public shares,
and our rights and warrants will expire worthless.
We may seek acquisition opportunities in companies
that may be outside of our management’s areas of expertise.
Although we intend to focus
our search within the blockchain industry, we will consider a business combination outside of our management’s areas of expertise
if a business combination candidate is presented to us and we determine that such candidate offers an attractive acquisition opportunity
for our company or we are unable to identify a suitable candidate in this sector after having expended a reasonable amount of time and
effort in an attempt to do so. In the event we elect to pursue an acquisition outside of the areas of our management’s expertise,
our management’s expertise may not be directly applicable to its evaluation or operation, and the information contained in this
Report regarding the areas of our management’s expertise would not be relevant to an understanding of the business that we elect
to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors. Accordingly,
any stockholders who choose to remain stockholders following our business combination could suffer a reduction in the value of their shares.
Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction
was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully
bring a private claim under securities laws that the tender offer materials or proxy statement relating to the business combination contained
an actionable material misstatement or material omission.
Although we have identified general criteria
and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination
with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial
business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified
general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter
into our initial business combination will not have all of these positive attributes. If we complete our initial business combination
with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business
that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target
that does not meet our general criteria and guidelines, a greater number of stockholders 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 stockholder approval of the transaction is required by law, or we decide to obtain stockholder approval
for business or other legal reasons, it may be more difficult for us to attain stockholder 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 stockholders may receive only approximately $10.15 per share on the liquidation of our trust account and our rights and warrants
will expire worthless.
We are not required to obtain an opinion from
an independent investment banking firm or from an independent accounting 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 company from a financial point of view.
Unless we complete our business
combination with an affiliated entity, or our board cannot independently determine the fair market value of the target business or businesses,
we are not required to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent
accounting firm that the price we are paying for a target is fair to our company from a financial point of view. If no opinion is obtained,
our stockholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally
accepted by the financial community. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials,
as applicable, related to our initial business combination.
Resources could be wasted in researching acquisitions
that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.
If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.15 per share
on the liquidation of our trust account and our rights and warrants will expire worthless.
We anticipate that the investigation
of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments
will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to
complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be
recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business
combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs
incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable
to complete our initial business combination, our public stockholders may receive only approximately $10.15 per share on the liquidation
of our trust account and our rights and warrants will expire worthless.
We may have a limited ability to assess the
management of a prospective target business and, as a result, may affect 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’ management
may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management, therefore,
may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s
management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability
of the post-combination business may be negatively impacted. Accordingly, any stockholders who choose to remain stockholders following
the business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such
reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of
a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that
the tender offer materials or proxy statement relating to the business combination contained an actionable material misstatement or material
omission.
The officers and directors
of an acquisition candidate may resign upon completion of our initial business combination. The departure of a business combination target’s
key personnel could negatively impact the operations and profitability of our post-combination business. The role of an acquisition
candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we
contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate
following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to
remain in place.
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, executive officers and directors
which may raise potential conflicts of interest.
In light of the involvement
of our sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated with
our sponsor, executive officers and directors. Our directors also serve as officers and board members for other entities, including, without
limitation, those described under “Management — Conflicts of Interest.” Such entities may compete with us
for business combination opportunities. 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 disinterested
directors. Despite our agreement to obtain an opinion from an independent investment banking firm, or from an independent accounting 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 executive officers or directors, 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 stockholders as they would be absent any conflicts of interest.
We will likely only be able to complete one
business combination with the proceeds of our initial public offering and the sale of the private placement warrants, 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.
We may effectuate our initial
business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However,
we may not be able to effectuate our initial business combination with more than one target business because of various factors, including
the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that
present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By
completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic,
competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit from the possible spreading of
risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different
industries or different areas of a single industry. Accordingly, the prospects for our success may be:
| ● | solely dependent upon the performance of a single business,
property or asset, or |
| ● | dependent upon the development or market acceptance of a single
or limited number of products, processes or services. |
This lack of diversification
may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon
the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business
combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise
to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously
acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its
business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay
our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including
additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers)
and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies
in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results
of operations.
We may attempt to complete our initial business
combination with a private company about which little information is available, which may result in a business combination with a company
that is not as profitable as we suspected, if at all.
In pursuing our acquisition
strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public information generally
exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination
on the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected,
if at all.
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 stockholders 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
stockholders prior to the business combination may collectively own a minority interest in the post business combination company, depending
on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which
we issue a substantial number of new shares of common stock in exchange for all of the outstanding capital stock 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 shares of common
stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of common stock
subsequent to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single
person or group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may make it more likely
that our management will not be able to maintain our control of the target business. 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 seek business combination opportunities with a high degree
of complexity that require significant operational improvements, which could delay or prevent us from achieving our desired results.
We may seek business combination
opportunities with large, highly complex companies that we believe would benefit from operational improvements. While we intend to implement
such improvements, to the extent that our efforts are delayed or we are unable to achieve the desired improvements, the initial business
combination may not be as successful as we anticipate.
To the extent we complete
our initial business combination with a large complex business or entity with a complex operating structure, we may also be affected by
numerous risks inherent in the operations of the business with which we combine, which could delay or prevent us from implementing our
strategy. Although our management team will endeavor to evaluate the risks inherent in a particular target business and its operations,
we may not be able to properly ascertain or assess all of the significant risk factors until we complete our initial business combination.
If we are not able to achieve our desired operational improvements, or the improvements take longer to implement than anticipated, we
may not achieve the gains that we anticipate. Furthermore, some of these risks and complexities may be outside of our control and leave
us with no ability to control or reduce the chances that those risks and complexities will adversely impact a target business. Such combination
may not be as successful as a combination with a smaller, less complex organization.
We do not have a specified maximum redemption
threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than
$5,000,001 both immediately before and after the consummation of our initial business combination. 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 stockholders do not
agree.
Our amended and restated certificate
of incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in
an amount that would cause our net tangible assets to be less than $5,000,001 both immediately before and after the consummation of our
initial business combination (such that we become subject to the SEC’s “penny stock” rules) or any greater net tangible
asset or cash requirement which may be contained in the agreement relating to our initial business combination. As a result, we may be
able to complete our initial business combination even though a substantial majority of our public stockholders do not agree with the
transaction and have redeemed their shares or, if we seek stockholder 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 initial stockholders, including our officers or directors, or their advisors or their affiliates.
In the event the aggregate cash consideration we would be required to pay for all shares of common stock 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 shares of common stock submitted
for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
We may be unable to obtain additional financing
to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure
or abandon a particular business combination.
Although we believe that the
net proceeds of our initial public offering and the sale of the private placement warrants will be sufficient to allow us to complete
our initial business combination, because we have not yet identified any prospective target business we cannot ascertain the capital requirements
for any particular transaction. If the net proceeds of our initial public offering and the sale of the private placement warrants prove
to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search
of a target business, the obligation to repurchase for cash a significant number of shares from stockholders who elect redemption in connection
with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business
combination, we may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you that
such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when
needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular
business combination and seek an alternative target business candidate. In addition, even if we do not need additional financing to complete
our 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 stockholders is required to provide any financing to us in connection with or after our business combination. If we are unable
to complete our initial business combination, our public stockholders may only receive approximately $10.15 per share on the liquidation
of our trust account, and our rights and warrants will expire worthless.
Because we must furnish our stockholders with
target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with
some prospective target businesses.
The federal proxy rules require
that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical
and/or pro forma financial statement disclosure. We will include the same financial statement disclosure in connection with our tender
offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared
in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international
financial reporting standards depending on the circumstances and the historical financial statements may be required to be audited in
accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement
requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial
statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business
combination within the prescribed time frame.
Our search for a business combination, and
any target business with which we ultimately consummate our initial business combination, may be materially adversely affected by the
coronavirus (COVID-19) pandemic, and the status of debt and equity markets.
The COVID-19 pandemic
resulted in a widespread health crisis that adversely affected the economies and financial markets in the U.S. and worldwide, and
could adversely affect the business of any potential target company with which we consummate a business combination. The extent to which
COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot
be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or
treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive
period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate
a business combination, may be materially adversely affected. In addition, our ability to complete a transaction may be dependent on the
ability to raise equity and debt financing which may be impacted by COVID-19 and other events, 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.
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, 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. Finally, the outbreak of COVID-19 may also have the effect of heightening many of the other
risks described in this “Risk Factors” section, such as those related to the market for our securities and cross-border transactions.
Risks Relating to the Post-Business Combination
Company
Subsequent to the completion of our initial
business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges
that could have a significant negative effect on our financial condition, results of operations and our stock price, which could cause
you to lose some or all of your investment.
Even if we conduct extensive
due diligence on a target business with which we combine, we cannot assure you that this diligence will surface all material issues that
may be present inside a particular target business, that it would be possible to uncover all material issues through a customary amount
of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these
factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other
charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may
arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges
may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute
to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other
covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining
post-combination debt financing. Accordingly, any stockholders who choose to remain stockholders following the business combination
could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless
they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary
duty owed to them, or if they are able to successfully bring a private claim under securities laws that the tender offer materials or
proxy statement relating to the business combination contained an actionable material misstatement or material omission.
Because we are not limited to a particular
industry or any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the
merits or risks of any particular target business’ operations.
Although we expect to focus
our search for a target business on entities in the blockchain industry, we may seek to complete a business combination with an operating
company in any industry or sector. However, we are not, under our amended and restated certificate of incorporation, be permitted to effectuate
our business combination with another blank check company or similar company with nominal operations. Because we have not yet signed an
agreement with 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’ operations, results of operations, cash flows, liquidity, financial condition or prospects.
To the extent we complete our business combination, we may be affected by numerous risks inherent in the business operations with which
we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings,
we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. These
risks include investing in a business without a proven business model and with limited historical financial data, volatile revenues or
earnings, intense competition and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor
to evaluate the risks inherent in a particular target business, we 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 stockholders who choose to remain stockholders
following the business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy
for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors
of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws
that the tender offer materials or proxy statement relating to the business combination contained an actionable material misstatement
or material omission.
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 stockholders’ investment in us.
Although we have no commitments
as of the date of this Report to issue any notes or other debt securities, or to otherwise incur outstanding debt following our initial
public offering, we may choose to incur substantial debt to complete our initial business combination. We have agreed that we will not
incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the
monies held in the trust account. As such, no issuance of debt will affect the per-share amount available for redemption from the
trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
| ● | default and foreclosure on our assets if our operating revenues
after an initial business combination are insufficient to repay our debt obligations; |
| ● | acceleration of our obligations to repay the indebtedness
even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial
ratios or reserves without a waiver or renegotiation of that covenant; |
| ● | our immediate payment of all principal and accrued interest,
if any, if the debt security is payable on demand; |
| ● | our inability to obtain necessary additional financing if
the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
| ● | our inability to pay dividends on our common stock; |
| ● | 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 common stock if declared, expenses, capital expenditures,
acquisitions and other general corporate purposes; |
| ● | limitations on our flexibility in planning for and reacting
to changes in our business and in the industry in which we operate; |
| ● | increased vulnerability to adverse changes in general economic,
industry and competitive conditions and adverse changes in government regulation; |
| ● | 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; and |
| ● | other disadvantages compared to our competitors who have less
debt. |
If we effect our initial business combination
with a company with operations or opportunities outside of the United States, we would be subject to a variety of additional risks
that may negatively impact our operations.
If we effect our initial business
combination with a company with operations or opportunities outside of the United States, we would be subject to any special considerations
or risks associated with companies operating in an international setting, including any of the following:
| ● | higher costs and difficulties inherent in managing cross-border business
operations and complying with different commercial and legal requirements of overseas markets; |
| ● | rules and regulations regarding currency redemption; |
| ● | laws governing the manner in which future business combinations
may be effected; |
| ● | tariffs and trade barriers; |
| ● | regulations related to customs and import/export matters; |
| ● | local or regional economic policies and market conditions; |
| ● | unexpected changes in regulatory requirements; |
| ● | tax issues, such as tax law changes and variations in tax
laws as compared to the United States; |
| ● | currency fluctuations and exchange controls; |
| ● | challenges in collecting accounts receivable; |
| ● | cultural and language differences; |
| ● | underdeveloped or unpredictable legal or regulatory systems; |
| ● | protection of intellectual property; |
| ● | social unrest, crime, strikes, riots, civil disturbances,
regime changes, political upheaval, terrorist attacks, natural disasters and wars; |
| ● | deterioration of political relations with the United States;
and |
| ● | government appropriation of assets. |
We may not be able to adequately
address these additional risks. If we were unable to do so, our operations might suffer, which may adversely impact our results of operations
and financial condition.
If our management following our initial business
combination is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws,
which could lead to various regulatory issues.
Following our initial business
combination, any or all of our management could resign from their positions as officers of the Company, and the management of the target
business at the time of the business combination could remain in place. Management of the target business may not be familiar with U.S. securities
laws. If new management is unfamiliar with U.S. 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.
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.
Risks Relating to our Management and Directors
Past performance by our management team, including
investments and transactions which they have participated in and businesses with which they have been associated, may not be indicative
of future performance of an investment in us.
Information regarding performance
by, or businesses associated with, our management team is presented for informational purposes only. Any past experience and performance
of our management team is not a guarantee either: (a) that we will be able to successfully identify a suitable candidate for our
initial business combination; or (b) of any results with respect to any initial business combination we may consummate. You should
not rely on the historical record of our management team’s performance as indicative of the future performance of an investment
in us or the returns we will, or are likely to, generate going forward. The market price of our securities may be influenced by numerous
factors, many of which are beyond our control, and our stockholders may experience losses on their investment in our securities.
We are dependent upon our executive officers
and directors and their departure could adversely affect our ability to operate.
Our operations are dependent
upon a relatively small group of individuals. We believe that our success depends on the continued service of our executive officers and
directors, at least until we have completed our business combination. In addition, our executive officers and directors are not required
to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time
among various business activities, including identifying potential business combinations and monitoring the related due diligence. We
do not have an employment agreement with, or key-man insurance on the life of, any of our directors or executive officers. The unexpected
loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.
Our ability to successfully effect our initial
business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may
join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability
of our post-combination business.
Our ability to successfully
effect our initial business combination is dependent upon the efforts of our key personnel. 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. These agreements may provide for
them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest
in determining whether a particular business combination is the most advantageous.
Our key personnel may be able
to remain with the company after the completion of our initial business combination only if they are able to negotiate employment or consulting
agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the
business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities
for services they would render to us after the completion of the business combination. The personal and financial interests of such individuals
may influence their motivation in identifying and selecting a target business. However, we believe the ability of such individuals to
remain with us after the completion of our initial business combination will not be the determining factor in our decision as to whether
or not we will proceed with any potential business combination. There is no certainty, however, that any of our key personnel will remain
with us after the completion of our business combination. We cannot assure you that any of our key personnel will remain in senior management
or advisory positions with us. The determination as to whether any of our key personnel will remain with us will be made at the time of
our initial business combination.
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 executive 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 executive 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 executive officers is engaged in several other business endeavors
for which he may be entitled to substantial compensation and our executive 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. For example,
several members of our management team and board are affiliated with the GBV. Certain of these individuals have indicated that they plan
to devote a portion of their time sourcing blockchain technology investments for GBV’s private equity funds. If our executive officers’
and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current
commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete
our initial business combination.
Certain of our executive officers and directors
are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to
be conducted by us following our initial business combination and, accordingly, may have conflicts of interest in determining to which
entity a particular business opportunity should be presented.
Following the completion of
our initial public offering and until we consummate our initial business combination, we intend to engage in the business of identifying
and combining with one or more businesses. Our executive officers and directors are, or may in the future become, affiliated with entities
that are engaged in business activities similar to those intended to be conducted by us following our initial business combination.
Our officers and directors
also may become aware of business opportunities which may be appropriate for presentation to us and the other entities to which they owe
certain fiduciary or contractual duties. Accordingly, they may have conflicts of interest in determining to which entity a particular
business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented
to another entity prior to its presentation to us. Our amended and restated certificate of incorporation provides that we renounce our
interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely
in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted
to undertake and would otherwise be reasonable for us to pursue.
For a complete discussion of
our executive officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware
of, please see “Management — Directors and Executive Officers,” “Management — Conflicts
of Interest” and “Certain Relationships and Related Party Transactions.”
Our executive 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 executive officers, directors, security holders and their respective 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 directors or executive
officers, although we do not currently 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.
Since our initial stockholders, including our
sponsor, executive 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.
Our sponsor holds 4,312,500
founder shares for an aggregate purchase price of $25,000, or approximately $0.006 per share. Certain members of our management team also
have a financial interest in our sponsor. The founder shares held by our sponsor will be worthless if we do not complete an initial business
combination. In addition, our sponsor purchased 6,812,500 private placement warrants, for an aggregate purchase price of $6,812,500. All
of the foregoing private placement warrants will also be worthless if we do not consummate our initial business combination. The personal
and financial interests of our sponsor, executive officers and directors may influence their motivation in identifying and selecting a
target business combination, completing an initial business combination and influencing the operation of the business following the initial
business combination. This risk may become more acute as the end of the combination period nears, which is the deadline for our completion
of an initial business combination.
Since our sponsor, executive officers and directors
will not be eligible to be reimbursed for their out-of-pocket expenses if our business combination is not completed, a conflict of
interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
At the closing of our initial
business combination, our sponsor, executive officers and directors, or any of their respective affiliates, will be reimbursed for any
out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing
due diligence on suitable business combinations. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred
in connection with activities on our behalf. These financial interests of our sponsor, executive officers and directors, may influence
their motivation in identifying and selecting a target business combination and completing an initial business combination.
Risks Relating to Our Securities
You will not have any rights or interests in
funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to
sell your public shares, rights, or warrants, potentially at a loss.
Our public stockholders will
be entitled to receive funds from the trust account only upon the earliest to occur of: (i) the completion of our initial business
combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended
and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares
if we do not complete our initial business combination within the combination period or (B) with respect to any other provision relating
to stockholders’ rights or pre-business combination activity and (iii) the redemption of all of our public shares if we
are unable to complete our business combination within the combination period, subject to applicable law and as further described herein.
Stockholders who do not exercise their rights to the funds in connection with an amendment to our certificate of incorporation would still
have rights to the funds in connection with a subsequent business combination. In no other circumstances will a public stockholder have
any right or interest of any kind in the trust account. Accordingly, to liquidate your investment, you may be forced to sell your public
shares, rights, 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 common stock, rights, and
warrants are listed on Nasdaq. 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 stock price levels. 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. We cannot assure you that we
will be able to meet those initial listing requirements at that time.
If Nasdaq delists our securities
from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities
could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
| ● | a limited availability of market quotations for our securities; |
| ● | reduced liquidity for our securities; |
| ● | a determination that our common stock is a “penny stock”
which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading
activity in the secondary trading market for our securities; |
| ● | a limited amount of news and analyst coverage; and |
| ● | a decreased ability to issue additional securities or obtain
additional financing in the future. |
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 stockholders may be less
than $10.15 per share.
Our placing of funds in the
trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service
providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title,
interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may
not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust
account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as
claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets,
including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held
in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement
with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly
more beneficial to us than any alternative. We are not aware of any product or service providers who have not or will not provide such
waiver other than the underwriters of our initial public offering.
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 business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection
with our 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 stockholders
could be less than the $10.15 per share initially held in the trust account, due to claims of such creditors. Our sponsor has agreed that
it will be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target
business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below
(i) $10.15 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation
of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay
taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except
as to any claims under indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities
under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor
will not be responsible to the extent of any liability for such third party claims. We have not asked our sponsor to reserve for such
indemnification obligations, and 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.
A provision of our warrant agreement may make
it more difficult for us to consummate an initial business combination.
If (x) we issue additional
shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business
combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective
issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor or its affiliates,
without taking into account any founder shares held by our sponsor or its affiliates, as applicable, prior to such issuance) (the “newly
issued price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds,
and interest thereon, available for the funding of our initial business combination on the date of the completion of our initial business
combination (net of redemptions), and (z) the volume weighted average trading price of our common stock during the 20 trading
day period starting on the trading day prior to the day on which we complete our initial business combination (such price, the
“Market Value”) is below $9.20 per share, 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, and the $18.00 per share redemption trigger price will be
adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the newly issued price. This may make it more
difficult for us to consummate an initial business combination with a target business.
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 stockholders.
In the event that the proceeds
in the trust account are reduced below the lesser of (i) $10.15 per share or (ii) other than due to the failure to obtain a
waiver from a vendor waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit
of our public stockholders, such lesser amount per share held in the trust account as of the date of the liquidation of the trust account
due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and our sponsor
asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our
independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While
we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any
particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the
trust account available for distribution to our public stockholders may be reduced below $10.15 per share.
If, after we distribute the proceeds in the
trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that
is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having
breached their fiduciary duties 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 stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed
against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy
laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek
to recover all amounts received by our stockholders. 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
stockholders from the trust account prior to addressing the claims of creditors.
If, before distributing the proceeds in the
trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that
is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount
that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
If, before distributing the
proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed
against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included
in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any
bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our stockholders in connection
with our liquidation may be reduced.
Our stockholders may be held liable for claims
by third parties against us to the extent of distributions received by them upon redemption of their shares.
Under the DGCL, stockholders
may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution.
The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event
we do not complete our initial business combination within the combination period may be considered a liquidation distribution under Delaware
law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable
provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against
the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting
period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution
is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any
liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our
public shares as soon as reasonably possible following the end of the combination period in the event we do not complete our business
combination and, therefore, we do not intend to comply with those procedures.
Because we will not be complying
with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that
will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years
following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be
limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as
lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of
the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s
pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred
after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought
against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but
no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion
of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our
initial business combination within the combination period is not considered a liquidation distribution under Delaware law and such redemption
distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances
that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then
be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidation distribution.
We may not hold an annual meeting of stockholders
until after our consummation of a business combination and you will not be entitled to any of the corporate protections provided by such
a meeting.
In accordance with the Nasdaq
corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following
our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders
for the purposes of electing directors in accordance with a company’s bylaws unless such election is made by written consent in
lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial
business combination, and thus, we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting.
Therefore, if our stockholders want us to hold an annual meeting prior to our consummation of a business combination, they may attempt
to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of
the DGCL. Until we hold an annual meeting of stockholders, public stockholders may not be afforded the opportunity to discuss company
affairs with management. Accordingly, you may not have any say in the management of our company prior to the completion of an initial
business combination.
We registered the shares of common stock underlying
the warrants under the Securities Act and applicable state securities laws.
While we have registered the
common stock issuable upon exercise of the warrants under the Securities Act at the time of our IPO, we do not plan on keeping a prospectus
current until required to pursuant to the warrant agreement. Pursuant to the terms of the warrant agreement, we have agreed, as soon as
practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our reasonable
best efforts to file, and within 60 business days after the closing of our initial business combination, to have declared effective,
a registration statement relating to the common stock issuable upon exercise of the warrants, and to maintain a current prospectus relating
to such shares of common stock 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 shares issuable upon exercise of the warrants are not registered under the Securities
Act, we will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will 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 is available. Notwithstanding the above, if our common stock is at the time of any exercise of a warrant
not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of
the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless
basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required
to file or maintain in effect a registration statement, but we will use our best efforts to register or qualify the shares under applicable
blue sky 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
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 applicable state securities laws. If the issuance of the shares upon exercise of the warrants is not so registered or qualified
or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant
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 shares of common stock included in the units. We may not redeem the warrants when a holder
may not exercise such warrants. However, there may be instances in which holders of our public warrants may be unable to exercise such
public warrants but holders of our private placement warrants may be able to exercise such private placement warrants.
The grant of registration rights to our initial
stockholders 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 common stock.
Pursuant to an agreement to
be entered into concurrently with the issuance and sale of the securities in our initial public offering, our initial stockholders and
their permitted transferees can demand that we register their shares of our common stock at the time of our initial business combination.
In addition, holders of our private placement warrants and their permitted transferees can demand that we register the private placement
warrants and the shares of common stock 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 warrants or the common stock 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 common stock. In addition, the existence
of the registration rights may make our initial business combination more costly or difficult to conclude. This is because the stockholders
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 common stock that is expected when the common stock owned by our initial stockholders, holders
of our private placement warrants or holders of our working capital loans or their respective permitted transferees are registered.
We may issue additional shares of common stock
or preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business
combination, and any such issuances would dilute the interest of our stockholders and likely present other risks.
Our amended and restated certificate
of incorporation authorizes the issuance of up to 100,000,000 shares of common stock, par value $0.0001 per share, and 1,000,000 shares
of undesignated preferred stock, par value $0.0001 per share.
We may issue a substantial
number of additional shares of common stock, and may issue shares of preferred stock, in order to complete our initial business combination
or under an employee incentive plan after completion of our initial business combination (although our amended and restated certificate
of incorporation provides that we may not issue securities that can vote with common stockholders on matters related to our pre-business combination
activity). However, our amended and restated certificate of incorporation provides, among other things, that prior to our initial business
combination, we may not issue additional shares of capital stock 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 certificate of incorporation,
like all provisions of our amended and restated certificate of incorporation, may be amended with a stockholder vote. However, our sponsor,
executive officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our
amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public
shares if we do not complete our initial business combination within the combination period or (B) with respect to any other provision
relating to stockholders’ rights or pre-business combination activity, unless we provide our public stockholders with the opportunity
to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number
of then outstanding public shares. The issuance of additional shares of common or preferred stock:
| ● | may significantly dilute the equity interest of investors
in our initial public offering; |
| ● | may subordinate the rights of holders of common stock if preferred
stock is issued with rights senior to those afforded our common stock; |
| ● | could cause a change in control if a substantial number of
common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could
result in the resignation or removal of our present officers and directors; and |
| ● | may adversely affect prevailing market prices for our units,
common stock, rights, and/or warrants. |
In order to effectuate an initial business
combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments.
We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing instruments in
a manner that will make it easier for us to complete our initial business combination that our stockholders may not support.
In order to effectuate a business
combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments.
For example, blank check companies have amended the definition of business combination, increased redemption thresholds and extended the
time period in which the company must consummate its initial business combination. We cannot assure you that we will not seek to amend
our charter or governing instruments in order to effectuate our initial business combination.
Certain agreements related to our initial public
offering may be amended without stockholder approval.
Certain agreements, including
the underwriting agreement relating to our initial public offering, the investment management trust agreement between us and Continental
Stock Transfer & Trust Company, the letter agreements and the registration rights agreement among us and our sponsor, executive
officers and directors, and the administrative services agreement between us and an affiliate of our officers may be amended without stockholder
approval. These agreements contain various provisions that our public stockholders might deem to be material. While we do not expect our
board of directors to approve any amendment to any of these agreements prior to our initial business combination, it may be possible that
our board of directors, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments
to any such agreement in connection with the consummation of our initial business combination. Any such amendment may have an adverse
effect on the value of an investment in our securities.
Our initial stockholders control a substantial
interest in us and thus may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do
not support.
Our initial stockholders own
19.6% of our issued and outstanding shares of common stock. Accordingly, they may exert a substantial influence on actions requiring a
stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation
and approval of major corporate transactions. If our initial stockholders purchase any units in our initial public offering or additional
shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their influence.
We may amend the terms of the rights in a manner
that may be adverse to holders of public rights with the approval by the holders of at least 65% of the then outstanding public rights.
Our rights will be issued in
registered form under a rights agreement between Continental Stock Transfer & Trust Company, as rights agent, and us. The rights
agreement provides that the terms of the rights may be amended without the consent of any holder to cure any ambiguity or correct any
defective provision, but requires the approval by the holders of at least 65% of the then outstanding public rights to make any change
that adversely affects the interests of the registered holders of public rights. Accordingly, we may amend the terms of the public rights
in a manner adverse to a holder if holders of at least 65% of the then outstanding public rights approve of such amendment.
Although our ability to amend the terms of the
public rights with the consent of at least 65% of the then outstanding public rights is unlimited, examples of such amendments could be
amendments to, among other things, adjust the conversion ratio of the rights.
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 65% of the then outstanding public
warrants.
Our warrants will be issued
in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The
warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct
any defective provision, but requires the approval by the holders of at least 65% of the then outstanding public warrants to make any
change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public
warrants in a manner adverse to a holder if holders of at least 65% 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 65% of the then outstanding public warrants
is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten
the exercise period or decrease the number of shares of our common stock purchasable upon exercise of a warrant.
We may redeem your unexpired warrants prior
to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem
outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided
that the last reported sales price of our common stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading-day period
ending on the third trading day prior to the date we send the notice of redemption to the warrant holders. We may not redeem the
warrants when a holder may not exercise such warrants. Redemption of the outstanding warrants could force you (i) to exercise your
warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants
at the then-current market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption
price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value
of your warrants. None of the private placement warrants will be redeemable by us so long as they are held by their initial purchasers
or their permitted transferees.
Our rights and warrants may have an adverse
effect on the market price of our common stock and make it more difficult to effectuate our initial business combination.
We issued rights that convert
into 1,725,000 shares of our common stock and warrants to purchase 17,250,000 shares of our common stock as part of the units
offered in our initial public offering and, simultaneously with the closing of our initial public offering, we issued an aggregate of
8,537,500 warrants at a price of $1.00 per warrant in a private placement to our sponsor, I-Bankers and Dawson James. In
addition, if our initial stockholders make any working capital loans, up to $1,500,000 of such loans may be convertible, at the option
of the lender, into private placement warrants at a price of $1.00 per warrant of the post business combination entity. To the extent
we issue shares of common stock to effectuate a business combination, the potential for the issuance of a substantial number of additional
shares of common stock upon conversion of the rights or exercise of the warrants could make us a less attractive acquisition vehicle to
a target business. Such rights and warrants, if and when exercised, would increase the number of issued and outstanding shares of our
common stock and reduce the value of the shares of common stock issued to complete the business combination. Therefore, our rights and
warrants may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business.
Provisions in our amended and restated certificate
of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future
for our common stock and could entrench management.
Our amended and restated certificate
of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their
best interests. These provisions include the ability of the board of directors to designate the terms of and issue new series of preferred
stock, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of
a premium over prevailing market prices for our securities.
We are also subject to anti-takeover provisions
under Delaware law, which could delay or prevent a change of control. Together these provisions may make more difficult the removal of
management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
Provisions in our amended and restated certificate
of incorporation and Delaware law may have the effect of discouraging lawsuits against our directors and officers.
Our amended and restated certificate
of incorporation requires, unless we consent in writing to the selection of an alternative forum, that (i) any derivative action
or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer
or other employee to us or our stockholders, (iii) any action asserting a claim against us, our directors, officers or employees
arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or bylaws, or (iv) any action
asserting a claim against us, our directors, officers or employees governed by the internal affairs doctrine may be brought only in the
Court of Chancery in the State of Delaware, except any claim (A) as to which the Court of Chancery of the State of Delaware determines
that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent
to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in
the exclusive jurisdiction of a court or forum other than the Court of Chancery, (C) for which the Court of Chancery does not have
subject matter jurisdiction, or (D) any action arising under the Securities Act, as to which the Court of Chancery and the federal
district court for the District of Delaware shall have concurrent jurisdiction. If an action is brought outside of Delaware, the stockholder
bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. Although we believe this
provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies,
a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of
discouraging lawsuits against our directors and officers, although our stockholders will not be deemed to have waived our compliance with
federal securities laws and the rules and regulations thereunder.
Notwithstanding the foregoing,
our amended and restated certificate of incorporation provides that the exclusive forum provision will not apply to suits brought to enforce
a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 27
of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the
Exchange Act or the rules and regulations thereunder. Although we believe this provision benefits us by providing increased consistency
in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits
against our directors and officers.
General Risks
We are a newly formed 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 newly formed company
with no operating results, and did not commence operations until obtaining funding through our initial public offering. 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 with one or more target businesses. We have no plans, arrangements or understandings with any prospective target
business concerning a business combination and may be unable to complete our initial business combination. If we fail to complete our
initial business combination, we will never generate any operating revenues.
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 business combination.
If we are deemed to be an investment
company under the Investment Company Act, our activities may be restricted, including, without limitation, restrictions on the nature
of our investments, and restrictions on the issuance of our securities, each of which may make it difficult for us to complete our business
combination. In addition, we may have imposed upon us burdensome requirements, including, without limitation, registration as an investment
company; adoption of a specific form of corporate structure; and reporting, record keeping, voting, proxy and disclosure requirements
and other rules and regulations to which we are not currently subject.
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 in securities and that our activities do not include investing, reinvesting,
owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S. government
securities and cash items) on an unconsolidated basis. Our business will be 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
anticipated principal activities will subject us to the Investment Company Act. The proceeds held in the trust account may be invested
by the trustee only in United States government treasury bills with a maturity of 185 days or less or in money market funds
investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company
Act. Because the investment of the proceeds will be restricted to these instruments, we believe we will meet the requirements for the
exemption provided in Rule 3a-1 promulgated under the Investment Company Act.
On March 30, 2022, the
SEC issued proposed rules relating to, among other matters, the extent to which SPACs could become subject to regulation under the Investment
Company Act. The SEC’s proposed rule under the Investment Company Act would provide a safe harbor for SPACs from the definition
of “investment company” under Section 3(a)(1)(A) of the Investment Company Act, provided that they satisfy certain conditions
that limit a SPAC’s duration, asset composition, business purpose and activities. The duration component of the proposed safe harbor
rule would require a SPAC to file a report on Form 8-K with the Commission announcing that it has entered into an agreement with
the target company (or companies) to engage in an initial business combination no later than 18 months after the effective date of
the SPAC’s registration statement for its initial public offering. The SPAC would then be required to complete its initial business
combination no later than 24 months after the effective date of its registration statement for its initial public offering. Although
that proposed safe harbor rule has not yet been adopted, the SEC has indicated that there are serious questions concerning the applicability
of the Investment Company Act to a SPAC that does not complete its initial business combination within the proposed time frame set forth
in the proposed safe harbor rule.
Although we intend to comply
with the terms of the proposed safe harbor rule, if we were deemed to be an investment company for purposes of the Investment Company
Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and could
increase the costs and time needed to complete a business combination or impair our ability to consummate a business combination. If we
have not completed our initial business combination within the combination period, our public stockholders may receive only approximately
$10.15 per share, or less in certain circumstances, on the liquidation of our trust account and our rights and warrants will expire worthless.
Changes in laws or regulations, or a failure
to comply with any laws and regulations, may adversely affect our business, investments 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 and results of operations.
On March 30, 2022, the
SEC issued proposed rules relating to, among other items, enhancing disclosures in business combination transactions involving SPACs and
private operating companies; amending the financial statement requirements applicable to transactions involving shell companies; effectively
limiting the use of projections in SEC filings in connection with proposed business combination transactions; increasing the potential
liability of certain participants in proposed business combination transactions; and the extent to which SPACs could become subject to
regulation under the Investment Company Act of 1940. These rules, if adopted, whether in the form proposed or in revised form, may materially
adversely affect our ability to negotiate and complete our initial business combination and may increase the costs and time related thereto.
A market for our securities may not develop,
which would adversely affect the liquidity and price of our securities.
The price of our securities
may vary significantly due to one or more potential business combinations and general market or economic conditions, including as a result
of the COVID-19 pandemic. 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.
We are an emerging growth company within the
meaning of the Securities Act, and we are taking advantage of certain exemptions from disclosure requirements available to emerging growth
companies, which could make our securities less attractive to investors and may make it more difficult to compare our performance with
other public companies.
We are an “emerging growth
company” within the meaning of the Securities Act, as modified by the JOBS Act, and we are taking advantage of certain exemptions
from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but
not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act,
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the
requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments
not previously approved. As a result, our stockholders 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 common stock 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.
Compliance obligations under the Sarbanes-Oxley Act
may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources,
and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act
requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the
year ending December 31, 2022. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be
required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial
reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered
public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company
makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies
because a target company with which we seek to complete our initial business combination may not be in compliance with the provisions
of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity
to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
A new 1% U.S. federal excise tax could
be imposed on the Company in connection with redemptions by the Company of its shares in connection with a business combination or other
stockholder vote pursuant to which stockholders would have a right to submit their shares for redemption (a “Redemption Event”).
On August 16, 2022, the Inflation Reduction
Act of 2022 (“IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal
1% excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations and
certain domestic subsidiaries of publicly traded foreign corporations.
The excise tax is imposed on the repurchasing
corporation itself, not its stockholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market
value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations
are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the
same taxable year. In addition, certain exceptions apply to the excise tax. The Treasury has been given authority to provide regulations
and other guidance to carry out, and prevent the abuse or avoidance of, the excise tax. In this regard, on December 27, 2022, the
Treasury and the Internal Revenue Service issued a notice announcing their intent to issue proposed regulations addressing the application
of the excise tax, and describing certain rules on which taxpayers may rely prior to the issuance of such proposed regulations (the “Notice”).
Any redemption or other repurchase that occurs
after December 31, 2022, in connection with a Redemption Event may be subject to the excise tax. Pursuant to the rules set forth
in the Notice, however, redemptions in connection with a liquidation of the Company are generally not subject to the excise tax. Whether
and to what extent the Company would be subject to the excise tax in connection with a Redemption Event would depend on a number of factors,
including (i) the fair market value of the redemptions and repurchases in connection with the Redemption Event, (ii) the structure
of the business combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with the
business combination (or otherwise issued not in connection with the Redemption Event but issued within the same taxable year of the business
combination), and (iv) the content of regulations and other future guidance from the Treasury. In addition, because the excise tax
would be payable by the Company, and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been
determined. The foregoing could cause a reduction in the cash available on hand to complete a business combination and in the Company’s
ability to complete a business combination.