PMVCW PMV Consumer Acquisition Corporation (PK)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended September 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number: 001-39534

PMV Consumer Acquisition Corp.

(Exact Name of Registrant as Specified in Its Charter)

249 Royal Palm Way, Suite 503

Palm Beach, FL 33480

(Address of principal executive offices)

(561) 318-3766

(Issuer’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

As of November 8, 2024, there were 73,169 shares of Class A common stock, par value $0.0001 per share, and 26,831 shares of Class B convertible common stock, par value $0.0001 per share.

PMV CONSUMER ACQUISITION CORP.

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2024

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

PMV CONSUMER ACQUISITION CORP.

CONDENSED BALANCE SHEETS

The accompanying notes are an integral part of the unaudited condensed financial statements. 

PMV CONSUMER ACQUISITION CORP.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

The accompanying notes are an integral part of the unaudited condensed financial statements.

PMV CONSUMER ACQUISITION CORP.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024

(Unaudited)

The accompanying notes are an integral part of the unaudited condensed financial statements.

PMV CONSUMER ACQUISITION CORP.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023
(Unaudited)

The accompanying notes are an integral part of the unaudited condensed financial statements.

PMV CONSUMER ACQUISITION CORP.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

The accompanying notes are an integral part of the unaudited condensed financial statements.

PMV CONSUMER ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Unaudited)

PMV CONSUMER ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Unaudited)

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (CONT.)

PMV CONSUMER ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Unaudited)

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (CONT.)

PMV CONSUMER ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Unaudited)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

PMV CONSUMER ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Unaudited)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

PMV CONSUMER ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Unaudited)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

PMV CONSUMER ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Unaudited)

NOTE 3. RELATED PARTY TRANSACTIONS (CONT.)

PMV CONSUMER ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Unaudited)

PMV CONSUMER ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Unaudited)

NOTE 5. STOCKHOLDER’S EQUITY (CONT.)

PMV CONSUMER ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Unaudited)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to PMV Consumer Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to PMV Consumer Acquisition Holdings Company, LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact, included in this Form 10-Q, including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s final prospectus for its Initial Public Offering and/or the Company’s Form 10-K for the year ended December 31, 2023, filed on March 28, 2024, with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Overview

We are a shell company formed under the laws of the State of Delaware on March 18, 2020, for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business opportunity with one or more businesses or entities. Our efforts to identify a prospective business opportunity will not be limited to a particular industry or geographic location, although we are currently focusing our search for a business opportunity in the consumer industry. We intend to effectuate a business opportunity using cash, our capital stock, debt or a combination of cash, stock and debt.

The issuance of additional shares of our stock in a transaction:

Similarly, if we issue debt securities or otherwise incur significant indebtedness, it could result in:

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities through September 30, 2024, were organizational activities, those necessary to prepare for the IPO, described below, and searching for a business opportunity with which to complete a transaction. We do not expect to generate any operating revenues until after the completion of a transaction. We generate non-operating income in the form of interest income on marketable securities held. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the three and nine months ended September 30, 2024, we had a net loss of $45,555 and $151,294, respectively, which consists of interest income of $14,480 and $42,075, respectively, offset by general and administrative expenses of $50,395 and $148,092, respectively, franchise tax expense of $8,000 and $23,286, respectively, and provision for income taxes of $1,640 and $21,991, respectively.

For the three and nine months ended September 30, 2023, we had a net loss of $67,262 and $207,287, respectively, which consists of interest income of $14,132 and $36,981, respectively, offset by general and administrative expenses of $57,670 and $201,842, respectively, franchise tax expense of $2,700 and $10,200, respectively, and provision for income taxes of $21,024 and $32,226, respectively.

Liquidity and Capital Resources

On September 24, 2020, we consummated the IPO of 17,500,000 Units at a price of $10.00 per Unit, generating gross proceeds of $175,000,000. Following the IPO, a total of $175,000,000 was placed in the Trust Account. As of December 31, 2022, the Trust Account was fully redeemed.

To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete a transaction, the remaining cash will be used as working capital to finance operations, make other acquisitions and pursue our growth strategies.

As of September 30, 2024, we had cash and cash equivalents of $1,130,295. We intend to use these funds primarily to identify and evaluate potential business opportunities, perform business due diligence on prospective business opportunities, travel to and from the offices, plants or similar locations associated with prospective business opportunities, review corporate documents and material agreements related to business opportunities, and structure, negotiate and complete a transaction.

For the nine months ended September 30, 2024, cash provided by operating activities was $57,665. Net loss of $151,294 was affected by net increase of changes in operating assets and liabilities of $208,959.

For the nine months ended September 30, 2023, cash used in operating activities was $50,314. Net loss of $207,287 was affected by net increase of changes in operating assets and liabilities of $156,973.

In order to fund working capital deficiencies or finance transaction costs in connection with a business opportunity, the Sponsor, or certain of our officers and directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete a transaction, we would repay such loaned amounts. In the event that a transaction does not close, we may use a portion of the working capital to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants identical to the Private Warrants, at a price of $1.00 per warrant, at the option of the lender.

We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a business opportunity, undertaking in-depth due diligence and negotiating a transaction are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to a transaction. Moreover, we may need to obtain additional financing to complete a transaction, in which case we may issue additional equity securities or incur debt in connection with such transaction. In addition, following a transaction, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of September 30, 2024.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of the Sponsor a monthly fee of $10,000 for office space, utilities and secretarial and administrative support. We began incurring these fees on September 24, 2020, and will continue to incur these fees monthly for the foreseeable future.

On August 22, 2022, UBS agreed to waive its entitlement to the deferred underwriting commission of $4,593,750 to which it became entitled upon completion of the Company’s Initial Public Offering, subject to the consummation of a transaction. Thereafter, on December 27, 2022, in accordance with the provisions of its charter, the Company announced the completion of the redemption of its outstanding shares of Class A convertible common stock subject to redemption (the “Class A IPO Shares”), which resulted in the forfeiture of the remaining $1,531,250 of deferred underwriting fees. Following the completion of the redemption of the Class A IPO Shares, the IPO Trust Account was terminated in complete liquidation of the assets held in trust, and the relevant provisions of the Company’s charter, including with respect to any business combination and the IPO Trust Account, were extinguished and are of no further legal force and effect. As a result, the Company derecognized the entire deferred underwriting fee payable of $6,125,000 and recorded $5,815,688 of the forgiveness of the deferred underwriting fee allocated to Public Shares to accumulated earnings (deficit) and the remaining balance of $309,312 was as a gain from extinguishment of liability allocated to warrant liabilities. As of September 30, 2024 and December 31, 2023, the deferred underwriting fee payable is $0.

Critical Accounting Policies and Estimates

The preparation of the unaudited condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. There have been no material changes to the critical accounting estimates during the quarter ended September 30, 2024.

We have identified the following critical accounting policies and estimates:

Warrant Liability

We account for the warrants issued in connection with our IPO in accordance with the guidance contained in ASC 815 under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the warrants as liabilities at their fair value and adjust the warrants to fair value at each reporting period. The Company’s accounting policy and estimate surrounding the warrant liability is deemed to be critical since it is an equity linked instrument, and the accounting pronouncement that determines the initial classification at issuance is considered a complex topic. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statements of operations. Any changes in the value could have a significant impact on the results of operations.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Through September 30, 2024, our efforts were limited to organizational activities, activities relating to our initial public offering and, since the initial public offering, the search for a business opportunity for which to consummate a transaction. We have engaged in limited operations and have not generated any revenues. We have not engaged in any hedging activities since our inception on March 18, 2020. We do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.

As of September 30, 2024, we were not subject to any market or interest rate risk. The Company’s cash was invested in U.S. government treasury bills with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there was no associated material exposure to interest rate risk.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Co-Principal Executive Officers and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

As of September 30, 2024, as required by Rules 13a-15 and 15d-15 under the Exchange Act, our principal executive officers and principal financial and accounting officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon their evaluation, our Co-Chief Executive Officers and Chief Accounting Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective.

Changes in Internal Control over Financial Reporting

There were no changes during the quarter ended September 30, 2024, in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risks discussed in Part I, Item 1A “Risk Factors” in our Form 10-K filed with the SEC on March 28, 2024, for the year ended December 31, 2023.

You should understand that an investment in our securities involves a high degree of risk. The occurrence of one or more of the events or circumstances described in this section “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. The following is a summary of some of the risks and uncertainties that could materially adversely affect our business, financial condition and results of operations. You should read this summary together with the more detailed description of each risk factor incorporated by reference or contained herein below.

Summary of Risk Factors

The risk factors set forth below provide more detailed disclosure of the risks relating to our operations.

We are a recently 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 recently formed company with no operating results. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objectives. We have no plans, arrangements or understandings with respect to any business opportunity and may be unable to complete a transaction. If we fail to complete a transaction, we may never generate any operating revenues.

If we elect to take advantage of the controlled company standards, we would be exempt from various corporate governance requirements.

Certain listing rules generally define a “Controlled Company” as any company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company. Only holders of the Founder Shares will have the right to vote on the election of directors. More than 50% of the Founder Shares are held by our Sponsor. Accordingly, we satisfy the definition of being a controlled company. We may in the future elect to take advantage of the controlled company standards, pursuant to which we would be exempt from various corporate governance requirements, such as the requirement to have a majority of independent directors and to have nominating/corporate governance and compensation committees comprised entirely of independent directors.

Because of our limited resources and the significant competition for business opportunities, it may be more difficult for us to complete a transaction and our warrants may 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), blank check companies and other entities, domestic and international, competing for the types of business opportunities we intend to pursue. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, such business opportunities and/or operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more 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 business opportunities we could potentially pursue, our ability to compete for such business opportunities will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain business opportunities.

Holders of Class A common stock (fka Class C common stock) will not be entitled to vote on any election of directors we hold.

Only holders of our Founder Shares will have the right to vote on the election of directors. Holders of our public shares will not be entitled to vote on the election of directors. Accordingly, you may not have any say in the management of our company.

Holders of Class B common stock will be entitled to ten (10) votes for each such share.

Holders of Class B common stock will be entitled to ten (10) votes for each such share at any annual or special meeting of stockholders or in the case of any written consent of stockholders in lieu of a meeting and for all purposes. Holders of our public shares will be entitled to one vote for each such share held. Accordingly, holders of Founder Shares may exert an outsized influence on each matter properly submitted to the stockholders on which holders of the common stock are entitled to vote.

Because we are neither limited to evaluating a business opportunity in a particular industry sector nor have we selected any specific business opportunities with which to pursue a transaction, you are unable to currently ascertain the merits or risks of any particular business opportunity.

Although we initially intended to focus our search for a business opportunity in the consumer products industry, we are not limited to evaluating a business opportunity in any particular industry sector. As a result, there is no current basis to evaluate the possible merits or risks of any particular business opportunity. To the extent we complete a transaction, we may be affected by numerous risks inherent in the business opportunity. For example, if we pursue a business opportunity with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular business opportunity, 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 business opportunity. We also cannot assure you that an investment in our securities will ultimately prove to be more favorable to you than a direct investment, if such opportunity were available, in a business opportunity.

Our success largely depends on the ability of our management team to operate and execute effectively.

Our success largely depends on the ability of our management team to effectively organize and consummate a business opportunity. Our management team is critical to the execution of our strategic direction and implementation of a business opportunity. It is difficult to predict with any certainty that we will be able to replace these individuals with persons of equivalent experience and capabilities should one or more members no longer be able to serve in their current capacity. If we are unable to find adequate replacements or to attract, retain and incentivize senior executives, other key advisors or new qualified personnel, such inability could have a material adverse effect on our ability to effect a business opportunity and final results of operations.

Past performance by our management team, our special advisors and their respective affiliates may not be indicative of future performance of an investment in us.

Information regarding performance by, or businesses associated with, our management team, our special advisors and their respective affiliates is presented for informational purposes only. Past performance by them is not a guarantee either (i) of success with respect to any business opportunity we may consummate, or (ii) that we will be able to locate a suitable business opportunity. You should not rely on the historical record of the performance of our management team, our special advisors and their respective affiliates or businesses associated with them as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward.

Any future involvement of our Sponsor and its affiliates, members of our management and companies with which they are affiliated in governmental investigations or civil litigation unrelated to our business affairs could materially impact our ability to consummate a business opportunity.

Our Sponsor and its affiliates, members of our management team and companies with which they are affiliated may become involved in governmental investigations and civil litigation relating to their business affairs unrelated to our Company in the United States or in other jurisdictions. Such matters, should they arise in the future, risk distracting them from attention to our affairs and may negatively impact our ability to attract suitable business opportunities and may ultimately impede our ability to consummate a transaction.

We may seek business opportunities in any industry our management chooses (which industries may be outside of our management’s areas of expertise).

We may consider a business opportunity in any industry our management chooses. Although our management will endeavor to evaluate the risks inherent in any particular business opportunity, we cannot assure you that we will adequately ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our securities will not ultimately prove to be less favorable to investors in this offering than a direct investment, if an opportunity were available, in a business opportunity. In the event we elect to pursue a business opportunity 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 prospectus regarding the areas of our management’s expertise would not be relevant to an understanding of the business that we elect to pursue. As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors.

We may seek business opportunities with a financially unstable business or an entity lacking an established record of revenue, cash flow or earnings, which could subject us to volatile revenues, cash flows or earnings or difficulty in retaining key personnel.

To the extent we effect a transaction with a financially unstable business or an entity lacking an established record of revenues or earnings, we may be affected by numerous risks inherent in the operations of that business opportunity. These risks include volatile revenues or earnings and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent in a particular business opportunity, we may not be able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a business opportunity.

We are not required to obtain an opinion from an independent investment banking firm, or another valuation or appraisal firm that commonly renders fairness opinions, and consequently you may have no assurance from an independent source that the price we are paying in a transaction is fair to our stockholders from a financial point of view.

Unless we complete a transaction with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm, or another valuation or appraisal firm that commonly renders fairness opinions, that the price we are paying is fair to our stockholders 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.

Resources could be wasted in researching business opportunities that are not completed, which could materially adversely affect subsequent attempts to identify and effect a business opportunity. If we are unable to complete a transaction, our warrants may expire worthless.

We anticipate that the investigation of each specific business opportunity 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 business opportunity, 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 business opportunity, we may fail to complete the transaction 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 identify and effect another business opportunity.

We may reincorporate in another jurisdiction and such reincorporation may result in taxes imposed on stockholders.

We may, subject to requisite stockholder approval under the DGCL, reincorporate in another jurisdiction. The transaction may require a stockholder to recognize taxable income in the jurisdiction in which the stockholder is a tax resident or in which its members are resident if it is a tax transparent entity. We do not intend to make any cash distributions to stockholders to pay such taxes. Stockholders may be subject to withholding taxes or other taxes with respect to their ownership of us after the reincorporation.

Our ability to successfully effect a business opportunity and to be successful thereafter will be totally dependent upon the efforts of our key personnel. The loss of key personnel could negatively impact the operations and profitability of a business opportunity.

Prior to the completion of a transaction, our operations will be dependent upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the continued service of our officers and directors, at least until we have completed a business opportunity. 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 their time among various business activities, including identifying potential business opportunities 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.

The role of key personnel in a business opportunity, however, cannot presently be ascertained. Although some key personnel may remain in senior management or advisory positions following a transaction, it is equally likely that some or all may be replaced. While we intend to closely scrutinize any individuals we engage in relation to a particular business opportunity, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements. In addition, certain officers and directors may resign upon completion of a transaction. The departure of key personnel could negatively impact our operations and profitability. The role of key personnel cannot be ascertained at this time. Although we contemplate that certain members of the management team will remain post-transaction, it is possible that members of management will not wish to remain. The loss of key personnel could negatively impact the operations and profitability of our post-transaction business.

Our key personnel may negotiate employment or consulting agreements in connection with a particular business opportunity, and a particular business opportunity may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to receive compensation following a transaction and, as a result, may cause them to have conflicts of interest in determining whether a particular business opportunity is the most advantageous.

Our key personnel may be able to remain with our company post-transaction only if they are able to negotiate employment or consulting agreements. Such negotiations would take place simultaneously with the negotiation of the transaction 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 with respect to such business opportunity. Such negotiations also could make such key personnel’s retention or resignation a condition to a transaction. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a business opportunity, subject to their fiduciary duties under Delaware law.

We may have a limited ability to assess a prospective business opportunity and, as a result, may identify and effect a business opportunity whose management may not have the skills, qualifications or abilities to manage a public company, which could, in turn, negatively impact the value of our stockholder’s investment in us.

When evaluating the desirability of effecting a business opportunity, our ability to assess management may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the management team, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-transaction business may be negatively impacted.

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 effect a business opportunity.

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 opportunity and their other businesses. We do not intend to have any full-time employees prior to the completion of a transaction. Each of our executive officers is engaged in several other business endeavors for which they 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. 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 effect a business opportunity.

Our officers and directors presently have fiduciary or contractual obligations to other entities and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.

We intend to engage in the business of identifying and effecting one or more business opportunities. 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 business opportunities to such entity. Accordingly, our officers and directors 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 business opportunity may be presented to another entity prior to its presentation to us, subject to their fiduciary duties under Delaware law.

Our officers and directors may in the future become affiliated with entities engaged in business activities similar to those intended to be conducted by us, and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.

We intend to engage in the business of identifying and effecting one or more business opportunities. 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 business opportunities to such entities. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to other entities prior to its presentation to us, subject to our officers’ and directors’ fiduciary duties under Delaware law.

In addition, our Sponsor and our officers and directors may sponsor or form other companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking business opportunities. Any such companies, businesses or investments may present additional conflicts of interest in pursuing business opportunities. However, we do not believe that any such potential conflicts would materially affect our ability to effect a business opportunity.

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 directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may effect a business opportunity with an entity that is affiliated with our Sponsor, our directors or executive officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.

The personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a business opportunity and completing a transaction. Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable business opportunity may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business opportunity are appropriate and in our stockholder’s best interest. If this were the case, it would be a breach of their fiduciary duties to us as a matter of Delaware law, and we or our stockholders might have a claim against such individuals for infringing on our stockholder’s rights. However, we might not ultimately be successful in any claim we may make against them for such reason.

We may effect a business opportunity with one or more entities that have relationships with entities that may be affiliated with our Sponsor, executive officers, directors or existing holders, 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 effect one or more business opportunities that are affiliated with our Sponsor, executive officers, directors or existing holders. Our directors also serve as officers and board members for other entities. Such entities may compete with us for business opportunities. Our Sponsor, officers and directors are not currently aware of any specific business opportunities involving any entities with which they are affiliated, and there have been no substantive discussions concerning a business opportunity with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business opportunity, and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement to obtain an opinion regarding the fairness to our company from a financial point of view of a business opportunity with one or more businesses affiliated with our Sponsor, executive officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the business opportunity may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.

We may issue notes or other debt securities, or otherwise incur substantial debt, to effect a business opportunity, which may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholder’s investment in us.

Although we have no current commitments to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to effect a business opportunity. The incurrence of debt could have a variety of negative effects, including:

We may only be able to effect one business opportunity, 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 only be able to effect one business opportunity. By effecting a business opportunity with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to effect several business opportunities in different industries or different areas of a single industry. Accordingly, the prospects for our success may be:

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.

We may attempt to simultaneously effect multiple business opportunities, which may hinder our ability to complete a business opportunity and give rise to increased costs and risks that could negatively impact our operations and profitability.

If we determine to simultaneously effect several business opportunities, we may need for each to agree that effecting one business opportunity is contingent on the other business opportunities, which may make it more difficult for us, and delay our ability, to effect a business opportunity. With multiple business opportunities, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence and the additional risks associated with the subsequent assimilation of different business opportunities. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.

We may attempt to effect a business opportunity with a private company about which little information is available, which may result in a transaction that is not as profitable as we suspected, if at all.

We may seek to effect a business opportunity with a privately held company. By definition, very little public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential business opportunity on the basis of limited information, which may result in a transaction that is not as profitable as we suspected, if at all.

We may be unable to obtain additional financing to effect a business opportunity or to fund our operations and growth, which could compel us to restructure or abandon a particular business opportunity. If we are unable to effect a business opportunity, our warrants may expire worthless.

As we have not yet selected any prospective business opportunity, we cannot ascertain the capital requirements for any particular transaction; however, it is likely that we will require additional financing to effect a business opportunity. We cannot assure you that such financing will be available on acceptable terms, if at all. The current economic environment has made it especially difficult for companies to obtain such financing. To the extent that additional financing proves to be unavailable when needed to effect a business opportunity, we would be compelled to either restructure the transaction or abandon that particular business opportunity and seek an alternative business opportunity. If we are unable to effect a business opportunity, our warrants may expire worthless. In addition, even if we do not need additional financing to effect a business opportunity, we may require such financing to fund our operations or growth. The failure to secure additional financing could have a material adverse effect on our continued development or growth. None of our officers, directors or stockholders is required to provide any financing.

Our Sponsor controls 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.

Given that it controls a substantial interest in us, our Sponsor may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our certificate of incorporation.

Further, holders of our Founder Shares will be entitled to ten (10) votes for each Founder Share held at any annual or special meeting of stockholders or in the case of any written consent of stockholders in lieu of a meeting and for all purposes. Holders of our public shares will be entitled to one vote for each such share. Additionally, only holders of our Founder Shares will have the right to vote on the election of directors. Holders of our public shares will not be entitled to vote on the election of directors.

We may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then outstanding public warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of shares of our Class A common stock purchasable upon exercise of a warrant could be decreased, all without your approval.

Our warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% 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 50% of the then outstanding public warrants approve of such amendment (which would include any public warrants purchased by our Sponsor or any of our officers or directors).

Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise period or decrease the number of shares of Class A common stock purchasable upon exercise of a warrant.

We are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and 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 shares of Class A common stock held by non-affiliates exceeds $700 million as of any September 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Additionally, we are a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million as of the prior September 30^th, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior September 30^th. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effect a business opportunity, require substantial financial and management resources, and increase the time and costs of completing a transaction.

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. Only in the event we are deemed to be a large accelerated filer or an accelerated filer and no longer an emerging growth company will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The development and maintenance of internal control to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to effect a business opportunity.

Provisions in our certificate of incorporation and bylaws 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 certificate of incorporation and bylaws contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. Holders of our Founder Shares will be entitled to ten (10) votes for each Founder Share held at any annual or special meeting of stockholders or in the case of any written consent of stockholders in lieu of a meeting and for all purposes. Holders of our public shares will be entitled to one vote for each such share. Additionally, only holders of our Founder Shares will have the right to vote on the election of directors. Holders of our public shares will not be entitled to vote on the election of directors. This may entrench management and discourage unsolicited stockholder proposals that may be in the best interest of stockholders. Moreover, our board of directors has the ability to designate the terms of and issue new series of preferred stock.

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.

Our certificate of incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholder’s ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.

Our certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors, officers and employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel except any action (A) as to which the Court of Chancery in 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. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in our certificate of incorporation.

This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers or employees, which may discourage lawsuits with respect to such claims, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder and may therefore bring a claim in another appropriate forum. We cannot be certain that a court will decide that this provision is either applicable or enforceable, and if a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.

Our certificate of incorporation provides that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law. 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. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.

Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.

We will likely 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 or inability to effect a business opportunity.

There may be tax consequences that may adversely affect us.

While we expect to undertake any business opportunity so as to minimize taxes, a particular transaction could result in the imposition of substantial taxes. Additionally, depending on the date and size of our initial business combination, it is possible that at least 60% of our adjusted ordinary gross income may consist of personal holding company income. 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, it is possible that more than 50% of our stock will be owned or deemed owned (pursuant to the constructive ownership rules) by such persons during the last half of a taxable year. Thus, no assurance can be given that we will not become a personal holding company following this offering or in the future. If we are or were to become a personal holding company in a given taxable year, we would be subject to an additional personal holding company tax, currently 20%, on our undistributed taxable income, subject to certain adjustments.

There may be uncertain or adverse U.S. federal income tax consequences.

There may be uncertain U.S. federal income tax consequences pertaining to certain transactions. For instance, the U.S. federal income tax consequences of a cashless exercise of warrants is unclear under current law. Prospective investors are urged to consult their tax advisors with respect to these and other tax consequences when purchasing, holding or disposing of our securities.

If we pursue a business opportunity outside of the United States, we may face additional burdens in connection with investigating, agreeing to and effecting such business opportunity, and if we effect such business opportunity, we would be subject to a variety of additional risks that may negatively impact our operations.

If we pursue a business opportunity outside of the United States, we would be subject to risks associated with a variety of cross-border issues, including in connection with investigating, agreeing to and effecting a business opportunity, conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.

If we effect a business opportunity outside of the United States, we would be subject to any special considerations or risks associated with operating in an international setting, including any of the following:

We may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to effect such business opportunity, or, if we do effect such business opportunity, our operations might suffer, either of which may adversely impact our business, financial condition and results of operations.

If a change in management occurs, and new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues.

Our management may resign from their positions as officers or directors of the company and new management may take their place. New management may not be familiar with United States securities laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.

If we effect a business opportunity outside of the United States, substantially all of our assets could be located in a foreign country and substantially all of our revenue could be derived from our operations in such country. Accordingly, our results of operations and prospects could be subject, to a significant extent, to the economic, political and legal policies, developments and conditions in the country in which we operate.

The economic, political and social conditions, as well as government policies, of the country in which our operations are ultimately located could affect our business. Economic growth could be uneven, both geographically and among various sectors of the economy, and such growth may not be sustained in the future. If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find and/or effect an attractive business opportunity.

Exchange rate fluctuations and currency policies may cause our ability to succeed in the international markets to be diminished.

In the event we effect a business opportunity outside of the United States, all revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency. The value of currencies fluctuates and is affected by, among other things, changes in political and economic conditions. Any change in the relative value of such currency against our reporting currency may affect the attractiveness of any business opportunity and/or our financial condition and results of operations. Additionally, if a currency appreciates in value against the dollar prior to the consummation of a transaction, the cost of a transaction as measured in dollars will increase, which may make it less likely that we are able to consummate such transaction.

We may face risks related to consumer and consumer-related products and services industries.

Business opportunities within the consumer and consumer-related products and services industries entail special considerations and risks. If we are successful in effecting a business opportunity within such industries, we may be subject to, and possibly adversely affected by, the following risks:

Any of the foregoing could have an adverse impact on our operations. However, our efforts in identifying prospective businesses opportunities will not be limited to consumer and consumer-related products and services industries. Accordingly, if we effect a business opportunity in another industry, these risks will likely not affect us and we will be subject to other risks attendant with the specific industry in which we operate, none of which can be presently ascertained.

Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could have a material adverse effect on our business.

As a public company, we are required to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. Internal control over financial reporting is complex and may be revised over time to adapt to changes in our business, or changes in applicable accounting rules. We cannot assure you that our internal control over financial reporting will be effective in the future or that a material weakness will not be discovered with respect to a prior period for which we had previously believed that our internal control over financial reporting was effective. Matters impacting our internal control over financial reporting may cause us to be unable to report our financial information on a timely basis, or may cause us to restate previously issued financial information, and thereby subject us to adverse regulatory consequences, including sanctions or investigations by the SEC, or violations of applicable stock exchange listing rules. There could also be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements. Confidence in the reliability of our financial statements is also likely to suffer if we report a material weakness in the effectiveness of our internal control over financial reporting. This could materially adversely affect us by, for example, leading to a decline in the price of our shares/warrants and impairing our ability to attract a business opportunity and/or consummate a transaction.

Our warrants are accounted for as liabilities and changes in the value of our warrants could have a material effect on our financial results.

On April 12, 2021, the SEC Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities instead of equity on the SPAC’s balance sheet. As a result of the SEC Staff Statement, we re-evaluated the accounting treatment of our warrants, and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value reported in our statement of operations for each reporting period.

As a result, included on our balance sheets as of September 30, 2024 and December 31, 2023, and contained elsewhere in this report, are derivative liabilities related to embedded features contained within our warrants. ASC 815-40 provides for the re-measurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly based on factors which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to identify a potential business opportunity and/or negotiate and complete a transaction, and results of operations.

We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to identify a potential business opportunity and/or negotiate and complete a transaction, and results of operations.

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 a transaction or conduct other business activities.

If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:

In addition, we may have imposed upon us burdensome requirements, including:

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 for purposes of Section (3)(a)(1)(A) thereof 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 for purposes of Section (3)(a)(1)(C) thereof. Our business is to identify a potential business opportunity and complete a transaction.

We do not believe that our principal ongoing activities centered on identifying a potential business opportunity and completing a transaction will subject us to the Investment Company Act under the definition of “investment company” contained in Section (3)(a)(1)(A) thereof. By having a business plan targeted at identifying a potential business opportunity and completing a transaction, we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act.

However, we are aware of litigation against certain entities asserting that, notwithstanding the foregoing, those entities should be considered investment companies and the SEC has suggested that the extended period of investment of assets by similar such entities raise questions about their status as investment companies under Section 3(a)(1)(A) of the Investment Company Act.

A new 1% U.S. federal excise tax could be imposed on the Company in connection with redemptions.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was signed into federal law. The IRA provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases (including redemptions as defined in the Internal Revenue Code) of stock by publicly traded U.S. corporations and certain U.S. subsidiaries of publicly traded non-U.S. corporations (each, a “covered corporation”). Because our securities are publicly trading in the over-the-counter market, we may be deemed a “covered corporation” for this purpose. The excise tax is imposed on the repurchasing corporation itself, not its shareholders 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 U.S. Department of Treasury has been given authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of, the excise tax. The IRA applies only to repurchases that occur after December 31, 2022.

Therefore, any redemption or other repurchase that occurs after December 31, 2022, may be subject to the excise tax. Whether and to what extent we would be subject to the excise tax would depend on a number of factors, including (i) the fair market value of the redemptions and, (ii) the nature and amount of the equity, and (iii) the content of regulations and other guidance from the U.S. Department of 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 identify a potential business opportunity and/or complete a transaction.

We filed a Form 25 with the SEC which became effective October 21, 2022, to voluntarily delist our common stock and public warrants from the NYSE and our securities are now available for limited quotation in the over-the-counter market and it is expected that any trading will be limited and sporadic.

Our delisting from the NYSE took effect on October 21, 2022; initially our shares of common stock and public warrants were trading on the NYSE and thereafter became eligible for quotation on the Pink tier of OTC Markets Group, if market makers commit to making a market in the securities. We can provide no assurance that trading in our securities will continue on the OTC Markets Group or otherwise. As a result of the delisting, we could face significant material adverse consequences, including:

Currently our securities are not eligible for proprietary broker-dealer quotations. All quotes will reflect unsolicited customer orders and, as a result, we expect any trading to involve a higher risk of wider spreads, increased volatility, and price dislocations and a general illiquid trading environment. Proprietary broker-dealer quotations may not commence until an initial review by a broker-dealer under the SEC’s Rule 15c2-11 which would enable brokers to publish competing quotes and provide continuous market making. No assurance can be provided that a liquid trading market will develop even if market makers begin proprietary quotations and thus we expect investors will experience difficulty in trading our securities.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because they have been delisted, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities. This state level regulation introduces additional compliance requirements for brokers to consider making markets in our securities and will further negatively impact any trading liquidity in our securities.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On March 20, 2020, the Sponsor purchased 3,593,750 shares of Class B convertible common stock, the “Founder Shares”, for an aggregate purchase price of $25,000, or approximately $0.007 per share. On August 3, 2020, the Company effected a 1.4-for-1 forward stock split of its issued and outstanding shares of Class B convertible common stock, resulting in an aggregate of 5,031,250 Founder Shares being issued and outstanding. The Underwriters’ over-allotment option expired unutilized resulting in 656,250 shares of Founder Shares being forfeited. As of September 30, 2024 and December 31, 2023, 26,831 (restated for reverse stock split) Founder Shares were issued and outstanding. The foregoing issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

On September 24, 2020, we consummated the Initial Public Offering of 17,500,000 Units, which did not include the full or partial exercise by the underwriters of the over-allotment option to purchase an additional 2,625,000 Units, at $10.00 per Unit. The securities in the offering were registered under the Securities Act on registration statements on Form S-1 (No. 333-241670). The Securities and Exchange Commission declared the registration statements effective on September 21, 2020.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 6,150,000 warrants at a price of $1.00 per Private Warrant in a private placement to PMV Consumer Acquisition Holdings Company, LLC, generating gross proceeds of $6,150,000. The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

The Private Warrants are identical to the warrants underlying the Units sold in the Initial Public Offering, except that the Private Warrants are not transferable, assignable or saleable, subject to certain limited exceptions.

Of the gross proceeds received from the Initial Public Offering and the sale of the Private Warrants, $175,000,000 was placed in the Trust Account. The Trust Account was terminated following the redemption of the outstanding shares of Class A convertible common stock subject to redemption, which was completed on December 27, 2022, in accordance with the provisions of our charter, and all cash and stock held therein was released to holders of Class A IPO Shares in complete liquidation of the assets held in trust.

We paid a total of $3,500,000 in underwriting discounts and commissions and $332,390 for other costs and expenses related to the Initial Public Offering, net of a $175,000 credit paid by the Underwriter.

Item 3. Defaults upon Senior Securities.

None

Item 4. Mine Safety Disclosures.

Not applicable

Item 5. Other Information.

None

Item 6. Exhibits

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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