Item 1. Business.
General
We are a blank check company
incorporated on September 24, 2020 as a Cayman Islands exempted company for the purpose of effecting an initial business combination.
To date, our efforts have been limited to organizational activities as well as activities related to our initial public offering.
Although we may pursue acquisitions
in any sector or industry, since our initial public offering, we have focused our search for opportunities to create value in the sectors
where we have leading edge expertise, specifically in the sports, media and entertainment sectors, including traditional and emerging
sports as well as film and television production and infrastructure.
Initial Public Offering
On January 8, 2021, we consummated
our initial public offering of 23,000,000 public units. Each unit consists of one Class A ordinary share, and one-third warrant, with
each whole warrant entitling the holder thereof to purchase one Class A ordinary share for $11.50 per whole share. The public units were
sold at a price of $10.00 per unit, generating gross proceeds to our company of $230,000,000.
Simultaneously with the closing
of the initial public offering, we completed the private sale of an aggregate of 660,000 placement units to our sponsor at a purchase
price of $10.00 per placement unit, generating gross proceeds of $6,600,000.
A total of $230,000,000,
comprised of $225,400,000 of the proceeds from the initial public offering and $4,600,000 of the proceeds of the sale of the placement
units was placed in the trust account maintained by Continental, acting as trustee.
It is the job of our sponsor
and management team to complete our initial business combination. We must complete our initial business combination by January 8, 2023.
If our initial business combination is not consummated by January 8, 2023, then our existence will terminate, and we will distribute all
amounts in the trust account.
Prime Focus Business Combination Agreement
On
January 25, 2022, we entered into the Prime Focus Business Combination Agreement with Prime Focus World, PF Overseas, Prime Focus 3D and
our sponsor.
The Prime Focus
Business Combination Agreement Transactions
The
Prime Focus Business Combination Agreement provides that, upon the terms and subject to the conditions thereof, the following transactions
will occur as part of the Prime Focus Business Combination: (i) the Company and the stockholders of Prime Focus World will consummate
the Prime Focus Company Exchange, pursuant to which the Company will acquire from the stockholders of Prime Focus World, and the stockholders
of Prime Focus World will transfer, convey and deliver to the Company, all of the ordinary and preferred shares of Prime Focus World issued
and outstanding as of the time immediately prior to the Prime Focus Company Exchange, and each Prime Focus World stockholder shall receive,
in consideration for such transfer, conveyance and delivery of each Prime Focus World share, a number of Class A ordinary shares equal
to such Prime Focus World stockholder’s portion of the consideration to which such Prime Focus World stockholder is entitled in
accordance with the Business Combination Agreement and (ii) effective as of the time of the Prime Focus Company Exchange (the “Prime
Focus Exchange Effective Time”), any outstanding options to purchase Prime Focus World shares shall be exchanged for options to
purchase Class A ordinary shares of the Company, as further described in the Prime Focus Business Combination Agreement or redeemed to
the extent that the Company has sufficient Available Cash following for such redemptions consistent with the terms of the Business Combination
Agreement.
Our
board of directors has unanimously (i) approved and declared advisable the Prime Focus Business Combination Agreement and the Prime Focus Business Combination and (ii) resolved to recommend approval of the Prime Focus Business Combination
Agreement and related matters by our shareholders.
Conditions to Closing
The
Prime Focus Business Combination Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including,
among others, (i) approval of the Prime Focus Business Combination and related agreements and transactions by our shareholders and the
stockholders of Prime Focus World, (ii) the filing by the Company of a proxy statement in connection with the Prime Focus Business Combination,
(iii) expiration or termination of any waiting period under applicable regulatory laws, (iv) the absence of any law or order enjoining
or prohibiting the Prime Focus Business Combination, (v) the absence of any event or circumstance having a material adverse effect, as
defined in the Prime Focus Business Combination Agreement, (vi) that the Company has at least $5,000,001 of net tangible assets upon Closing
(as defined below), (vii) receipt of approval for listing on Nasdaq the shares of Class A ordinary shares to be issued in connection with
the Prime Focus Business Combination, and (viii) the satisfaction and bring down of representations, warranties and covenants of the other
party, subject to certain materiality qualifiers.
Other
conditions to Prime Focus World’s obligations to consummate the Prime Focus Business Combination include, among others, that as
of the closing of the Prime Focus Business Combination (the “Closing”), (i) our Company shall have available cash equal or
greater to $350,000,000 and (ii) any transactions required by the Prime Focus Backstop Agreement shall have been consummated pursuant
to its terms.
Upon
the Closing, Prime Focus World equity holders are expected to receive approximately 71% ownership in us.
Covenants
The
Prime Focus Business Combination Agreement contains additional covenants, including, among others, providing for (i) the parties to conduct
their respective businesses in the ordinary course through the Closing, (ii) the parties to not initiate any negotiations or enter into
any agreements for certain alternative transactions, (iii) the Company to use its commercially reasonable efforts to comply with its obligations
under the Prime Focus Subscription Agreements, (iv) the Company to prepare and file a proxy statement and take certain other actions to
obtain the requisite approval of our shareholders of certain proposals regarding the Prime Focus Business Combination, (v) the Company
to keep its Class A ordinary shares listed on Nasdaq and to cause the Class A ordinary shares issued in connection with the Prime Focus
Business Combination to be listed on Nasdaq, and (vi) the Company to remain compliant with SEC reporting requirements.
Representations
and Warranties
The
Prime Focus Business Combination Agreement contains customary representations and warranties by the Company, our sponsor and Prime Focus
World. The representations and warranties of the respective parties to the Prime Focus Business Combination Agreement generally will not
survive the Closing.
Termination
The
Prime Focus Business Combination Agreement may be terminated at any time prior to the Closing (i) by mutual written consent of the Company
and Prime Focus World, and (ii) by either the Company or Prime Focus World in certain other circumstances set forth in the Prime Focus
Business Combination Agreement, including (a) if certain approvals of our shareholders are not obtained as set forth in the Prime Focus
Business Combination Agreement, (b) if the consummation of the Prime Focus Business Combination (or any transaction contemplated by the
Prime Focus Business Combination Agreement) is permanently enjoined or prohibited by the terms of a final, non-appealable Governmental
Order (as defined in the Prime Focus Business Combination Agreement) or applicable Law (as defined in the Prime Focus Business Combination
Agreement), (c) in the event of certain uncured breaches by a party, or (d) if the Closing has not occurred on or before August 31, 2022.
Certain Related Agreements
Prime Focus A&R
Registration Rights Agreement
The
Prime Focus Business Combination Agreement contemplates that, at the Closing, we and the holders set forth on Exhibit A thereto will enter
into an Amended and Restated Registration Rights Agreement that will amend and restate the registration rights agreement dated January
5, 2021 among the Company and the other parties thereto (as so amended and restated, the “Prime Focus A&R Registration
Rights Agreement”), pursuant to which we will agree to register for resale, pursuant to Rule 415 under the Securities Act certain
Class A ordinary shares and other equity securities that are held by the parties thereto from time to time. Additionally, the Prime Focus
A&R Registration Rights Agreement will (a) modify the up-to-one year lock-up previously set forth in the side letter dated January
5, 2021 between the Company and our sponsor to provide that 3,004,375 Class A ordinary shares issuable upon the conversion of the Founder
Shares (as defined in the Prime Focus A&R Registration Rights Agreement) shall be released at the Company Exchange Effective Time,
(b) provide for a lock-up of the Class A ordinary shares issuable to certain principal Company shareholders (as defined in the Prime Focus
A&R Registration Rights Agreement) in the Prime Focus Company Exchange ending on the earlier of (i) six months from the closing date
of the business combination, (ii) the first date that the closing price of the Class A ordinary shares equals or exceeds $12.00 per share
for any 20 trading days within any 30-trading-day period commencing at least 90 days after the closing date of the Prime Focus Business
Combination and (iii) the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction,
provided, that half of the shares issued to one principal Prime Focus World stockholder will be released at the Company Exchange Effective
Time and (c) provide for a lock-up of the Class A ordinary shares issuable to certain parties affiliated with Prime Focus World ending
on the earliest of (i) with respect to 25% of the Class A ordinary shares held by such parties, six months from the closing date of the
Prime Focus Business Combination, (ii) with respect to the remaining 75% of the Class A ordinary shares held by such parties, two years
from the Closing date of the Prime Focus Business Combination and (iii) the date on which the Company completes a liquidation, merger,
capital stock exchange, reorganization or other similar transaction.
Prime Focus Sponsor
Support Agreement
On
January 25, 2022, Prime Focus World and our sponsor entered into the Prime Focus Sponsor Support Agreement, pursuant to which, among other
things, our sponsor agreed to (i) vote in favor of the Prime Focus Business Combination Agreement and the transactions contemplated thereby,
(ii) retain and not redeem its holdings in the Company prior to the Closing, (iii) waive its anti-dilution rights, and (iv) deliver the
Prime Focus A&R Registration Rights Agreement as outlined above in connection with the Closing, but conditioned upon Closing, in each
case, on the terms and subject to the conditions set forth in the Prime Focus Sponsor Support Agreement.
Prime Focus Backstop
Agreement
On
January 25, 2022, the Company, Prime Focus World and our sponsor entered into the Prime Focus Backstop Agreement, pursuant to which, among
other things, our sponsor has committed to utilize its reasonable commercial efforts to consummate the Common Equity Financing (as defined
in the Prime Focus Business Combination Agreement) by purchasing additional Class A ordinary shares pursuant to the Backstop Subscription
(as defined in the Prime Focus Business Combination Agreement) at the Closing Stock Price (as defined in the Business Combination Agreement)
solely for purposes of consummating the transactions contemplated hereby in an aggregate amount up to $350,000,000 less the commitments
received from Prime Focus PIPE Investors in connection with the Common Equity Financing, which additional investment commitment is conditioned
upon and subject to the conditions set forth in the Prime Focus Backstop Agreement.
PFL Agreement
As contemplated by the Business
Combination Agreement, Prime Focus World and Prime Focus Limited entered into the PFL Agreement dated as of January 25, 2022 (the “PFL
Agreement”), pursuant to which, among other things, provides for four-year non-competition and non-solicitation restrictions on
Prime Focus Limited and certain affiliates with respect to Prime Focus World following the Closing.
Stockholder Support Agreements
As contemplated by the Business
Combination Agreement, we entered into three Stockholder Support Agreements, each dated as of January 25, 2022 (together the “Stockholder
Support Agreements” and each a “Stockholder Support Agreement”) with Prime Focus World and each of Novator Capital Limited,
A2R Holdings Limited, and Prime Focus Limited (together the “Prime Focus World Key Stockholders”). Pursuant to the Stockholder
Support Agreements, among other things, the Prime Focus World Key Stockholders have agreed (i) retain and not redeem its holdings in Prime
Focus World prior to the Closing, (ii) waive their anti-dilution rights, (iii) execute and deliver the A&R Registration Rights Agreement
in the form agreed upon by the parties in connection with the Closing and (iv) to effectuate the transactions contemplated by the Business
Combination Agreement, conditioned upon the terms and subject to the conditions set forth in its Stockholder Support Agreement. The Stockholders
Support Agreements will terminate in their entirety, and be of no further force or effect, upon the earliest to occur of (i) the
Company Exchange Effective Time; (ii) such date as the Business Combination Agreement shall be validly terminated in accordance with
Article IX thereof; and (iii) the effective date of a written agreement of the parties thereto terminating such Stockholder Support Agreement;
provided, however, that the termination of any Stockholder Support Agreement will not relieve any party thereto from liability arising
in respect of any willful material breach of such Stockholders Support Agreement or fraud prior to such termination.
Prime Focus Subscription
Agreements
On
January 25, 2022, concurrently with the execution of the Prime Focus Business Combination Agreement, the Company entered into subscription
agreements on substantially two forms with the Prime Focus PIPE Investors, pursuant to, and on the terms and subject to the conditions
of which, the Prime Focus PIPE Investors have collectively subscribed at a purchase price of $10.00 per share and $168,000,000 million
in the aggregate for 16,800,000 million shares of our Class A ordinary shares (the “Prime Focus PIPE Investment”). In addition
the Company is continuing discussions with certain other potential private investors to participate in the Prime Focus PIPE Investment.
The Prime Focus PIPE Investment will be consummated substantially concurrently with the Closing.
The
Prime Focus Subscription Agreements for the Prime Focus PIPE Investors provide for certain registration rights. In particular, the Company
is required to file a re-sale registration statement no later than 30 calendar days following the Closing. Additionally, the Company is
required to use its commercially reasonable efforts to have the registration statement declared effective as of the 90th calendar
day following the Closing after the filing thereof, but no later than the earlier of (i) the 135th calendar day following the Closing
if the SEC notifies the Company that it will “review” the registration statement and (ii) the 10th business day
after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that the registration statement will not
be “reviewed” or will not be subject to further review. The Company must use commercially reasonable efforts to keep the registration
statement effective until the earliest of: (i) the date that such Prime Focus PIPE Investor ceases to hold any Registrable Securities
(as defined in the Prime Focus Subscription Agreements), (ii) the date all Registrable Securities held by such Prime Focus PIPE Investor
may be sold without restriction under Rule 144, including without limitation, any volume and manner of sale restrictions which may be
applicable to affiliates under Rule 144 and without the requirement for the Company to be in compliance with the current public information
required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable), (iii) the date that all Registrable Securities held by such Prime Focus
PIPE Investor may be sold pursuant to another exemption from registration and (iv) two years from the effective date of the registration
statement.
The Prime Focus Subscription
Agreements will terminate with no further force and effect upon the earliest to occur of: (i) such date and time as the Prime Focus
Business Combination Agreement is terminated in accordance with its terms, (ii) the mutual written agreement of the parties to such Prime
Focus Subscription Agreement and Prime Focus World, and (iii) at Prime Focus PIPE Investor’s election, on August 31, 2022, if the
Closing has not occurred on or before such date.
The
foregoing descriptions of the Prime Focus Business Combination Agreement, form of the Prime Focus A&R Registration Rights Agreement,
the Prime Focus Sponsor Support Agreement, the Prime Focus Backstop Agreement, the Prime Focus Stockholder Support Agreements, the Prime
Focus PFL Agreement and the Prime Focus Subscription Agreements, and the transactions and documents contemplated thereby, is not complete
and is subject to and qualified in their entirety by reference to the Prime Focus Business Combination Agreement and all exhibits thereto,
the Prime Focus Sponsor Support Agreement, the Prime Focus Backstop Agreement, and the Prime Focus Subscription Agreements, copies of
which are filed with our current report on Form 8-K filed with the SEC on January 25, 2022, and the terms of which are incorporated by
reference herein.
Business Strategy
Our strategy has been and
continues to be to leverage our management’s expertise, network and operational experience to identify, acquire and grow a company
or companies in the sports, media and entertainment sectors on a global basis, such as Prime Focus World. Our management team has extensive
relationships and significant experience, having executed over $20 billion of transactions which provide us with unique access to
proprietary transaction sources and opportunities through which we will be able to maximize value for our shareholders. The management
team has an exceptional track record of sourcing and executing transactions across the global sports, media and entertainment sectors.
We have utilized and will continue to utilize the network and industry experience of our management team in seeking an initial business
combination and executing our acquisition strategy, if the Prime Focus Business Combination is not consummated. Over the course of their
careers, the members of our management team and their affiliates have developed a broad network of relationships with commissioners, team
owners, professional athletes, media and entertainment executives that will further complement our sourcing pipeline of acquisition opportunities
providing us with an inimitable advantage.
In the event that the Prime
Focus Business Combination is not consummated, the management team will capitalize on opportunities presented by the changing sports,
media and entertainment industry dynamics by seeking a market-leading, growth-oriented company that is benefitting from the following
trends:
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Rising consumer media consumption, together with the proliferation of subscription video on-demand services both domestically and globally, underpinning a surge in overall content spend from all players fueling the unprecedented production demand; |
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Iconic value of sports franchises bolstered by a deeply dedicated and increasingly global fan base where digital has created more avenues to engage with fans and monetize across new and alternative platforms; |
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Increase in sports-related media rights valuations driven by heightened user engagement, fueled by technology and regulatory developments including online platforms among other trends; |
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Robust growth in esports, propelled by strong industry tailwinds and growth of media rights, providing a unique opportunity to engage with a fast growing, young global gamer base fueling a rapidly expanding market opportunity; and |
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Massive influx in revenue from broadcasting opportunities, including associated advertising rates, leading to revenue growth. |
Within the sports industry,
we focus on teams, operators, agencies, esports and technology related businesses including those in data analytics, SaaS, ticketing and
fan engagement. Over the past few years, valuations of teams and supporting industries have soared due to new media deals, new arenas,
digital expansion and dedicated international fan-bases. The iconic value of sports, and sports-related assets, remains robust as
sports remain one of the last forms of “appointment viewing.” Within the media sectors, we focus on media and digital rights
and platforms. Disruption in the media industry, in addition to heightened competition and new entrants, reinforce the need to differentiate
one’s platform. To remain competitive, the industry will look to bolster their platforms with key rights and IP, fueling valuations.
Within entertainment, we evaluate opportunities in content creation including the development and production of film and television assets,
catalogs and libraries, and distribution. Record levels of consumption and content creation, supported by the capability to consume media,
anywhere, anytime are backing unprecedented growth in the industry. The disruption stemming from the ongoing global pandemic also presents
a unique opportunity in the target sectors, given the impact that it has had on the companies operating performance.
Members of our management
team have communicated with their industry relationships to announce the formation of the company and its purpose, to articulate the parameters
for our search for a target company and a potential business combination, and to pursue and review target companies as they present themselves.
In addition, in the event the Prime Focus Business Combination is not consummated, we anticipate that target business candidates will
be brought to our attention from various unaffiliated sources, which may include investment market participants, private equity groups,
investment banking firms, consultants, accounting firms, executive search firms, management consulting practices, agencies and large business
enterprises. While the management team is proactive in identifying these opportunities and timely in reviewing them, they will only execute
the appropriate opportunity based on the team’s target criteria and will not feel compelled to execute a transaction unless accretive
for all stakeholders.
Robert Tilliss, our President
and Chief Financial Officer, is the founder, CEO and Managing Member of Inner Circle Sports LLC, a leading global sports investment bank
in the industry. As a leader in finance for 19 years, Inner Circle Sports is a key strategic ally for our company in identifying
an initial business combination.
Acquisition Criteria
Consistent with our business
strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target
businesses. We use these criteria and guidelines in evaluating initial business combination opportunities, but we may decide to enter
into our initial business combination with a target business that does not meet any or all of these criteria and guidelines. Our initial
business combination criteria are not limited by sector or geographic scope, but given the experience and background of the management
team, our focus is on the sports, media and entertainment sectors. We are focused on acquiring a company with a defensible market position,
exhibiting unrecognized value and set to benefit from being a public company with broader access to capital, such as Prime Focus World.
The intended combination targets include but are not limited to:
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Sports assets, including professional U.S.-based sports teams, European soccer clubs, teams in cricket, and rugby, esports teams; and other sports IP and related assets including fan engagement, agencies, data, analytics and ticketing; |
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Media rights and content platforms, including sports media rights, content platforms, regional sports networks and esports; and |
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Entertainment studios and production services, including film studios and venues, agencies and other entertainment related companies. |
These criteria are evaluative
and not exhaustive in nature. Management is opportunistic in identifying opportunities to execute combinations to increase shareholder
value. Any combinations will be executed based on the management team’s knowledge of market conditions and the specific opportunity,
evaluated against key considerations, factors and criteria. Should an opportunity for combination arise that does not fit within the areas
outlined above that the management team deems more compelling, we would pursue the opportunity.
Competitive Strengths
We believe we have the following
competitive strengths uniquely position us to identify and execute a successful business combination:
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Deep network of industry relationships; |
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Relevant experience and domain expertise to assist in sourcing opportunities; |
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Management team’s experience and reputation in sourcing opportunities and creating significant shareholder value; |
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Public markets experience, operating listed companies, including a special purpose acquisition company in the past; and |
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Track record of operational excellence. |
Effecting Our Initial Business Combination
General
We are presently engaged in no operations other than consummating the
Prime Focus Business Combination and, if the Prime Focus Business Combination is not completed, searching for our initial business combination.
Notwithstanding the disclosures in this Report with respect to our general acquisition process, we are currently seeking to complete the
transaction to acquire Prime Focus World and are not currently seeking to find or to pursue another or alternative transaction. We would
not pursue another transaction until after the completion of the Prime Focus Business Combination or unless the Prime Focus Business Combination
fails to be completed. We intend to effectuate our initial business combination using cash from the proceeds of our initial offering and
the private placement, our equity, debt or a combination of these as the consideration to be paid in our initial business combination.
For more information on the Prime Focus Business Combination and the consideration to be used, see “Item 1. Business – Prime
Focus Business Combination Agreement.”
If we pay for our initial
business combination using shares or debt securities, or we do not use all of the funds released from the trust account for payment of
the purchase price in connection with our business combination or for redemptions or purchases of our ordinary shares, we may apply the
balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations
of acquired businesses, the payment of principal or interest due on indebtedness incurred in consummating our initial business combination,
to fund the purchase of other companies or for working capital.
Nasdaq rules require that
our initial business combination be with one or more target businesses that together have a fair market value equal to at least 80% of
the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of our
signing a definitive agreement in connection with our initial business combination. However, if our securities are not listed on Nasdaq
or another securities exchange, we will no longer be subject to that requirement.
We may seek to raise additional
funds through a private offering of debt or equity securities to finance our initial business combination, and we may effectuate an initial
business combination using the proceeds of such offering rather than using the amounts held in the trust account. Subject to compliance
with applicable securities laws, we would consummate such financing only simultaneously with the consummation of our business combination.
In the case of an initial business combination funded with assets other than the trust account assets, our tender offer documents or proxy
materials disclosing the business combination would disclose the terms of the financing and, only if required by law or Nasdaq, we would
seek shareholder approval of such financing. There are no prohibitions on our ability to raise funds privately or through
loans in connection with our initial business combination.
For more information
on debt and equity funding commitments in connection with the Prime Focus Business Combination, see “Item 1. Business – Prime
Focus Business Combination Agreement - Certain Related Agreements,” above.
Sources of Acquisition Candidates
We anticipate that target
business candidates will be brought to our attention from various unaffiliated sources, including investment bankers, attorneys, accountants,
venture capital funds, private equity funds, leveraged buyout funds, management buyout funds, brokers and other members of the financial
community and corporate executives. These target candidates may present solicited or unsolicited proposals. We expect such sources to
become aware that we are seeking a business combination candidate by a variety of means, including publicly available information relating
to our initial public offering, public relations and marketing efforts or direct contact by management following the completion of our
initial offering.
Our officers and directors,
as well as their affiliates, may also bring to our attention target business candidates of which they become aware through their contacts.
While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions
on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting
fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage
a finder only if our management determines that the use of a finder may bring opportunities to us that may not otherwise be available
to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest
to pursue. Payment of finder’s fees is customarily tied to completion of a transaction, in which case any such fee will be paid
out of the funds held in the trust account. In no event, however, will we pay our sponsor, officers or directors, or any entities with
which they are affiliated, any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order
to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is), other than repayment
of loans that our sponsor, members of our management team, board or any of their respective affiliates or other third parties may make
to finance transaction costs in connection with an intended initial business combination (provided that if we do not consummate an initial
business combination, we may use working capital held outside the trust account to repay such loaned amounts, but no proceeds from our
trust account would be used for such repayment), payments to our sponsor or its affiliate of a total of $10,000 per month for office
space, administrative and shared personnel support services, and reimbursements for any out-of-pocket expenses related to identifying,
investigation and completing an initial business combination. Although some of our officers and directors may enter into employment or
consulting agreements with the acquired business following our initial business combination, such as the Prime Focus Business Combination,
the presence or absence of any such arrangements will not be used as a criterion in our selection process of an acquisition candidate.
We are not prohibited from pursuing an initial business combination
with a company that is affiliated with our sponsor, officers, directors or their affiliates. Additionally, we are not prohibited from
partnering, submitting joint bids, or entering into any similar transaction with such persons in the pursuit of an initial business combination.
While Prime Focus World is not affiliated with our sponsor, officers or directors, in the event the Prime Focus Business Combination is
not consummated, if we seek to complete an initial business combination with such a company or we partner with such persons in our pursuit
of an initial business combination, we, or a committee of independent directors, would obtain an opinion from an independent investment
banking firm or an independent accounting firm, that such an initial business combination is fair to our shareholders from a financial
point of view. Generally, such opinion is rendered to a company’s board of directors and investment banking firms may take the view
that shareholders may not rely on the opinion. Such view will not impact our decision on which investment banking firm to hire.
Unless we consummate our
initial business combination with an affiliated entity, we are not required to obtain a financial fairness opinion from an independent
investment banking firm. If we do not obtain such an opinion, our shareholders will be relying on the judgment of our board of directors,
who will determine fair market value and fairness based on standards generally accepted by the financial community. The application of
such standards would involve a comparison, from a valuation standpoint, of our business combination target to comparable public companies,
as applicable, and a comparison of our contemplated transaction with such business combination target to other then-recently announced
comparable private and public company transactions, as applicable. The application of such standards and the basis of our board of directors’
determination will be discussed and disclosed in our proxy solicitation materials, as applicable, related to our initial business combination.
Other Acquisition Considerations
We are not prohibited from pursuing an initial business combination
with a company that is affiliated with our sponsor, officers or directors. While Prime Focus World is not affiliated with our sponsor,
officers or directors, in the event the Prime Focus Business Combination is not consummated, if we seek to complete our initial business
combination with a company that is affiliated with our officers or directors, we, or a committee of independent directors, will obtain
an opinion from an independent investment banking firm or another independent firm that commonly renders valuation opinions for the type
of company we are seeking to acquire or an independent accounting firm that our initial business combination is fair to our company from
a financial point of view.
Unless we complete our initial
business combination with an affiliated entity, or our board of directors cannot independently determine the fair market value of the
target business or businesses, we are not required to obtain an opinion from an independent investment banking firm, another independent
firm that commonly renders valuation opinions for the type of company we are seeking to acquire 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 shareholders
will be relying on the business judgment of our board of directors, which will have significant discretion in choosing the standard used
to establish the fair market value of the target or targets, and different methods of valuation may vary greatly in outcome from one another.
Such standards used will be disclosed in our proxy solicitation materials, as applicable, related to our initial business combination.
Members of our management
team directly or indirectly own our ordinary shares and/or placement units, and, accordingly, may have a conflict of interest in determining
whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each
of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention
or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our
initial business combination.
Each of our directors and
officers presently has, and in the future any of our directors and our officers may have additional, fiduciary or contractual obligations
to other entities pursuant to which such officer or director is or will be required to present acquisition opportunities to such entity.
Accordingly, subject to his or her fiduciary duties under Cayman Islands law, if any of our officers or directors becomes aware of an
acquisition opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or
she will need to honor his or her fiduciary or contractual obligations to present such acquisition opportunity to such entity, and only
present it to us if such entity rejects the opportunity. Our amended and restated memorandum and articles of association provide that,
subject to his or her fiduciary duties under Cayman Islands law, we renounce our interest in any corporate opportunity offered to any
officer or director 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. We do not believe, however, that any fiduciary duties or contractual obligations of our directors or officers would materially
undermine our ability to complete our business combination.
In addition, our sponsor,
officers and directors may participate in the formation of, or become an officer or director of, any other blank check company prior to
completion of our initial business combination. As a result, our sponsor, officers or directors could have conflicts of interest in determining
whether to present business combination opportunities to us or to any other blank check company with which they may become involved. Although
we have no formal policy in place for vetting potential conflicts of interest, our board of directors will review any potential conflicts
of interest on a case-by-case basis.
Initial Business Combination
The Nasdaq rules require
that 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 balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned)
at the time of our signing a definitive agreement in connection with our initial business combination. If our board of directors is not
able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent
investment banking firm or another independent firm that commonly renders valuation opinions for the type of company we are seeking to
acquire or an independent accounting firm with respect to the satisfaction of such criteria. We do not intend to purchase multiple
businesses in unrelated industries in conjunction with our initial business combination. Additionally, pursuant to Nasdaq rules, any initial
business combination must be approved by a majority of our independent directors.
We anticipate structuring
our initial business combination so that the post-transaction company in which our public shareholders own shares will own or acquire
100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination
such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order
to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business
combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise
acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment
Company Act 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 shareholders prior to the business combination may collectively own a minority interest in
the post-transaction company, depending on valuations ascribed to the target and us in the business combination 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,
shares or other equity interests of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a
result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could
own less than a majority of our 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 our initial 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.
We have filed a Registration
Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result,
we are subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15
to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
Status as a Public Company
We believe our structure makes us an attractive business combination
partner to target businesses such as Prime Focus World. As an existing public company, we offer a target business an alternative to the
traditional initial public offering through a merger or other business combination. In this situation, the owners of the target business
would exchange their shares of stock, shares or other equity interests in the target business for our shares or for a combination of our
shares and cash, allowing us to tailor the consideration to the specific needs of the sellers. For more information regarding debt and
equity financing in connection with the Prime Focus Business Combination, see “Item 1. Business – Prime Focus Business Combination
Agreement.” Although there are various costs and obligations associated with being a public company, we believe target businesses
such as Prime Focus World will find this method a more certain and cost effective method to becoming a public company than the typical
initial public offering. In a typical initial public offering, there are additional expenses incurred in marketing, road show and public
reporting efforts that may not be present to the same extent in connection with a business combination with us.
Furthermore, once a proposed
business combination, such as the Prime Focus Business Combination, is completed, the target business will have effectively become public,
whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market
conditions, which could delay or prevent the offering from occurring. Once public, we believe the target business would then have greater
access to capital and an additional means of providing management incentives consistent with shareholders’ interests. It can offer
further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
While we believe that our
structure and our management team’s backgrounds makes us an attractive business partner, some potential target businesses may have
a negative view of us since we are a blank check company, with no operating history, and there is uncertainty relating to our ability
to obtain shareholder approval of our proposed initial business combination and retain sufficient funds in our trust account in connection
therewith.
We are an “emerging
growth company,” as defined in the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day
of the fiscal year (a) following January 8, 2026, (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 ordinary shares that is held by
non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0billion
in non-convertible debt securities during the prior three-year period.
Additionally, we are a “smaller
reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain
reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain
a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds
$250 million as of the end of the prior June 30th, or (2) our annual revenues exceeded $100 million during such completed
fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30th.
Financial Position
With funds available
for a business combination in the amount of $230,026,609.12 (as of December 31, 2021) (assuming no redemptions), which amount includes
$8,050,000 of deferred underwriting fees, before fees and expenses associated with our initial business combination, we offer a target
business, such as Prime Focus World, a variety of options such as creating a liquidity event for its owners, providing capital for the
potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to
complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility
to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs
and desires. See “Item 1. Business – Prime Focus Business Combination Agreement - Certain Related Agreements,” above,
for more information on debt and equity funding commitments in connection with the Prime Focus Business Combination.
Effecting Our Initial Business Combination
We are not presently engaged
in, and we will not engage in, any operations other than searching for an initial business combination for an indefinite period of time.
We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the private placement
of the placement units, our shares, debt or a combination of these as the consideration to be paid in our initial business combination.
We may, although we do not currently intend to, seek to complete our initial business combination with a company or business that may
be financially unstable or in its early stages of development or growth, start-up companies or companies with speculative business
plans or excess leverage, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination
is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration
in connection with our initial business combination or used for redemptions of our Class A ordinary shares, we may apply the balance
of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations
of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business
combination, to fund the purchase of other companies or for working capital.
We may seek to raise additional
funds through a private offering of debt or equity securities in connection with the completion of our initial business combination, and
we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust
account.
In the case of an initial
business combination funded with assets other than the trust account assets, our tender offer documents or proxy materials disclosing
the business combination would disclose the terms of the financing and, only if required by law, we would seek shareholder approval of
such financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with our initial business
combination.
For more information regarding
debt and equity financing in connection with the Prime Focus Business Combination, see “Item 1. Business – Prime Focus Business
Combination Agreement.”
Selection of a target business and Structuring
of Our initial business combination
The Nasdaq rules require
that 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 balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned)
at the time of our signing a definitive agreement in connection with our initial business combination. The fair market value of the target
or targets will be determined by our board of directors based upon one or more standards generally accepted by the financial community,
such as discounted cash flow valuation or value of comparable businesses. Our shareholders will be relying on the business judgment of
our board of directors, which will have significant discretion in choosing the standard used to establish the fair market value of the
target or targets, and different methods of valuation may vary greatly in outcome from one another. Such standards used will be disclosed
in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination. Based on the
valuation analysis of our management and board of directors, we have determined that the fair market value of Prime Focus World was substantially
in excess of 80% of the funds in the trust account and that the 80% test was therefore satisfied.
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 or another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or
an independent accounting firm, with respect to the satisfaction of such criteria. We do not intend to purchase multiple businesses in
unrelated industries in conjunction with our initial business combination. Subject to this requirement, our management will have virtually
unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to
effectuate our initial business combination with another blank check company or a similar company with nominal operations.
In any case, in the event
the Prime Focus Business Combination is not consummated, we will only complete an initial business combination in which we own or acquire
50% or more of the outstanding voting securities of the target or otherwise acquire a controlling interest in the target sufficient for
it not to be required to register as an investment company under the Investment Company Act. If we own or acquire less than 100% of the
equity interests or assets of a target business or businesses, the portion of such business or businesses that are owned or acquired by
the post-transaction company is what will be valued for purposes of the 80% of net assets test.
To the extent we effect our
initial business combination with a company or business that may be financially unstable or in its early stages of development or growth
we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks
inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
In evaluating a prospective
target business, such as Prime Focus World, we will continue to conduct a thorough due diligence review which encompasses, among other
things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial,
operational, legal and other information which will be made available to us.
Any costs incurred with respect
to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately completed
will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Limited ability to evaluate the target’s
management team
Although we continue to closely
scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination
with that business, including the Prime Focus World management team, our assessment of the target business’s management may not
prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public
company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with
any certainty. While it is possible that one or more of our directors will remain associated in some capacity with us following our initial
business combination, including the Prime Focus Business Combination, it is unlikely that any of them will devote their full efforts to
our affairs subsequent to our initial business combination. Moreover, we cannot assure you that members of our management team will have
significant experience or knowledge relating to the operations of the particular target business.
We cannot assure you that
any of our key personnel will remain in senior management or advisory positions with the combined company, although one of our directors
may serve on the board of directors of the combined company upon the consummation of the Prime Focus Business Combination. 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 such additional managers will have the requisite skills, knowledge or experience
necessary to enhance the incumbent management.
Although the Prime Focus Business Combination
is expected to be subject to the approval by our shareholders, they may not have the ability to approve another initial business combination,
if the Prime Focus Business Combination is not consummated
In the case of the Prime
Focus Business Combination, we will seek shareholder approval if it is required by law or applicable stock exchange rule, or we may decide
to seek shareholder approval for business or other legal reasons. However, if the Prime Focus Business Combination is not closed, we may
conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our amended
and restated memorandum and articles of association.
Under the Nasdaq’s
listing rules, shareholder approval would be required for our initial business combination if, for example:
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we issue ordinary shares that will be equal to or in excess of 20% of the number of Class A ordinary shares then outstanding (other than in a public offering); |
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any of our directors, officers or substantial shareholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of ordinary shares could result in an increase in issued and outstanding ordinary shares or voting power of 5% or more; or |
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the issuance or potential issuance of ordinary shares will result in our undergoing a change of control. |
See “Item 1. Business
– Prime Focus Business Combination” above for more information regarding the requisite approval needed in the Prime Focus
Business Combination.
Permitted purchases of our securities
In the event that the Prime
Focus Business Combination is not consummated and we seek shareholder approval of another initial business combination and we do not conduct
redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers 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. There is no limit on the number of shares such persons may purchase. 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.
In the event our sponsor, directors, officers or their affiliates determine to make any such purchases at the time of a shareholder vote
relating to our initial business combination, such purchases could have the effect of influencing the vote necessary to approve such transaction.
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 shareholder, although still the record holder
of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. We have adopted an
insider trading policy which 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 sponsor,
directors, officers or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already
elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their
shares. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules
under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if
the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with
such rules.
The purpose of such purchases
would be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining shareholder
approval of the business combination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have
a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement
would otherwise not be met. This may result in the completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases
are made, the public “float” of our ordinary shares may be reduced and the number of beneficial holders of our securities
may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities
exchange.
Our sponsor, officers, directors
and/or their affiliates may identify the shareholders with whom our sponsor, officers, directors or their affiliates may pursue privately
negotiated purchases by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders
following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor, officers,
directors or their affiliates enter into a private purchase, they would identify and contact only potential selling shareholders who have
expressed their election to redeem their shares for a pro rata share of the trust account or vote against the business combination. Such
persons would select the shareholders from whom to acquire shares based on the number of shares available, the negotiated price per share
and such other factors as any such person may deem relevant at the time of purchase. The price per share paid in any such transaction
may be different than the amount per share a public shareholder would receive if it elected to redeem its shares in connection with our
initial business combination. Our sponsor, officers, directors or their affiliates will only purchase shares if such purchases comply
with Regulation M under the Exchange Act and the other federal securities laws.
Any purchases by our sponsor,
officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only
be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for
manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements
that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, officers, directors and/or their
affiliates will not make purchases of ordinary shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the
Exchange Act.
See “Item 1 Business
– Prime Focus Business Combination” above for more information regarding such purchase our sponsor, directors, officers or
their affiliates either prior to or following the completion of the Prime Focus Business Combination.
Redemption rights for public shareholders
upon completion of our initial business combination
We will provide our public
shareholders with the opportunity to redeem all or a portion of their ordinary shares upon the completion of our initial business combination
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days
prior to the consummation of the initial business combination, such as the Prime Focus 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 was anticipated to be approximately $10.00 per public share as of December 31, 2021. The per-share amount
we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will
pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to
validly redeem its shares. Our initial holders, sponsor, officers and directors have entered into a letter agreement with us, pursuant
to which they have agreed to waive their redemption rights with respect to their founder shares and any public shares they may hold in
connection with the completion of our initial business combination.
Manner of Conducting Redemptions
We will provide our public
shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial
business combination either (i) in connection with a general meeting called to approve the business combination, such as the Prime
Focus Business Combination or (ii) by means of a tender offer if the Prime Focus Business Combination is not consummated. The decision
as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely
in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction
would require us to seek shareholder approval under the law or stock exchange listing requirement. Under Nasdaq rules, asset acquisitions
and share purchases would not typically require shareholder approval while direct mergers with our company where we do not survive and
any transactions where we issue more than 20% of our issued and outstanding ordinary shares or seek to amend our amended and restated
memorandum and articles of association would require shareholder approval. We intend to conduct redemptions without a shareholder vote
pursuant to the tender offer rules of the SEC unless shareholder approval is required by law or stock exchange listing requirement or
we choose to seek shareholder approval for business or other legal reasons. So long as we obtain and maintain a listing for our securities
on the Nasdaq, we will be required to comply with Nasdaq rules.
If a shareholder vote is
not required and we do not decide to hold a shareholder vote for business or other legal reasons, we will, pursuant to our amended and
restated memorandum and articles of association:
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conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and |
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file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. |
Upon the public announcement
of our initial business combination, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to
purchase our Class A ordinary shares 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 shareholders not tendering more than a specified number of public
shares which are not purchased by our sponsor, which number will be based on the requirement that we will only redeem our public shares
so long as (after such redemption) our net tangible assets will be at least $5,000,001 either prior to or upon consummation of our initial
business combination, after payment of the deferred underwriting commission (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 shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and
not complete the initial business combination.
If, however, shareholder
approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain shareholder approval for
business or other legal reasons, we will, pursuant to our amended and restated memorandum and articles of association:
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and |
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file proxy materials with the SEC. |
We expect that a final proxy
statement would be mailed to public shareholders at least 10 days prior to the shareholder vote. However, we expect that a draft
proxy statement would be made available to such shareholders well in advance of such time, providing additional notice of redemption if
we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently intend to comply
with the substantive and procedural requirements of Regulation 14A in connection with any shareholder vote even if we are not able
to maintain our Nasdaq listing or Exchange Act registration.
In the event that we seek
shareholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our
public shareholders with the redemption rights described above upon completion of the initial business combination.
If we seek shareholder approval,
we will complete our initial business combination only if we receive the approval of an ordinary resolution under Cayman Islands law,
which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. In such
case, pursuant to the terms of a letter agreement entered into with us, our sponsor, officers and directors have agreed (and their permitted
transferees will agree) to vote any founder shares held by them and any public shares purchased during or after our initial public offering
in favor of our initial business combination. We expect that at the time of any shareholder vote relating to our initial business combination,
our sponsor and its permitted transferees will own approximately 21.8% of our issued and outstanding ordinary shares entitled to vote
thereon. Each public shareholder 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
memorandum and articles of association provide that we will only redeem our public shares so long as (after such redemption) our net tangible
assets will be at least $5,000,001 either prior to or upon consummation of our initial business combination, after payment of the deferred
underwriting commission (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 Class A ordinary shares that are validly submitted for redemption plus any amount required to
satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us,
we will not complete the business combination or redeem any shares, and all Class A ordinary shares submitted for redemption will
be returned to the holders thereof.
Limitation on redemption upon completion
of our initial business combination if we seek shareholder approval
Notwithstanding the foregoing,
if the Prime Focus Business Combination is not consummated and we seek shareholder approval of another initial business combination and
we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and
restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or
any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the
Exchange Act), will be restricted from seeking redemption of more than 3,450,000, which we refer to as “Excess Shares.” We
believe this restriction will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders
to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our sponsor
or its affiliates to purchase their shares at a significant premium to the then-current market price or on other undesirable terms.
Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in our initial public offering could
threaten to exercise its redemption rights if such holder’s shares are not purchased by us or our sponsor or its affiliates at a
premium to the then-current market price or on other undesirable terms. By limiting our shareholders’ ability to redeem no
more than 15% of the shares sold in our initial public offering, we believe we will limit the ability of a small group of shareholders
to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business
combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However,
our amended and restated memorandum and articles of association do not restrict our shareholders’ ability to vote all of their shares
(including Excess Shares) for or against our initial business combination. Our initial holders, sponsor, officers and directors have,
pursuant to a letter agreement entered into with us, waived their right to have any founder shares or public shares held by them redeemed
in connection with our initial business combination. Unless any of our other affiliates acquires founder shares through a permitted transfer
from an initial shareholder, and thereby becomes subject to the letter agreement, no such affiliate is subject to this waiver. However,
to the extent any such affiliate acquires public shares in our initial public offering or thereafter through open market purchases, it
would be a public shareholder and restricted from seeking redemption of any Excess Shares.
Tendering share certificates in connection
with a tender offer or redemption rights
We may require our public
shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”
to either tender their certificates (if any) to our transfer agent prior to the date set forth in the tender offer documents, 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 The Depository Trust Company’s DWAC System, rather than simply
voting against the initial business combination. 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 shareholders to satisfy
such delivery requirements, which will include the requirement that a beneficial holder must identify itself in order to validly redeem
its shares. Accordingly, a public shareholder would have from the time we send out our tender offer materials until the close of the tender
offer period, or up to two 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. Pursuant to the tender offer rules, the tender offer period will be
not less than 20 business days and, in the case of a shareholder vote, a final proxy statement would be mailed to public shareholders
at least 10 days prior to the shareholder vote. However, we expect that a draft proxy statement would be made available to such shareholders
well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation.
Given the relatively short exercise period, it is advisable for shareholders 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 $100.00 and it would be up to the broker whether or not to pass this cost on
to the redeeming holder. However, this 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.
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 general 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 shareholders 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 the Prime Focus Business
Combination is not completed, we may continue to try to complete a business combination with a different target until January 8, 2023.
Redemption of public shares and liquidation
if no initial business combination
Our sponsor, officers and
directors have agreed that we will have only until January 8, 2023, to complete our initial business combination. If we are unable to
complete our initial business combination within such 24-month 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 shareholders’ rights as shareholders (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 shareholders and our board of directors, liquidate and dissolve, subject in each
case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There
will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete
our initial business combination by January 8, 2023.
Our initial holders, sponsor,
officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions
from the trust account with respect to their founder shares if we fail to complete our initial business combination by January 8, 2023.
However, if our initial holders, sponsor, officers or directors acquire public shares after our initial public offering, they will be
entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business
combination by January 8, 2023.
Our initial holders, 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 memorandum and articles of association that would (i) modify the substance or timing of our obligation to provide holders
of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to
redeem 100% of our public shares if we do not complete our initial business combination by January 8, 2023 or (ii) with respect to
the other provisions relating to shareholders’ rights or pre-business combination activity, unless we provide our public shareholders
with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes
payable) divided by the number of then outstanding public shares. However, we will only redeem our public shares so long as (after such
redemption) our net tangible assets will be at least $5,000,001 either prior to or upon consummation of our initial business combination,
after payment of the deferred underwriting commission (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.
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 held
outside the trust account ($440.475 as of December 31, 2021), 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 sale of the placement units, other than the proceeds deposited in the trust
account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received
by shareholders upon our dissolution would be approximately $10.00. 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 shareholders. We cannot assure you
that the actual per-share redemption amount received by shareholders will not be substantially less than $10.00. 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 have sought and
will continue to seek to have all third parties (other than our independent registered public accounting firm), prospective target businesses
or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to
any monies held in the trust account for the benefit of our public shareholders, 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. Upon redemption
of our public shares, if we are unable to complete our initial business combination within the prescribed time frame, or upon the exercise
of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors
that were not waived that may be brought against us within the 10 years following redemption. Our sponsor has agreed that it will
be liable to us if and to the extent any claims by a third-party (other than our independent auditors) 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) $10.00 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 independently verified whether our sponsor has sufficient funds to satisfy their indemnity obligations and believe that our sponsor’s
only assets are securities of our company. None of our other officers will indemnify us for claims by third parties including, without
limitation, claims by vendors and prospective target businesses.
In the event that the proceeds
in the trust account are reduced below (i) $10.00 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 $10.00 per
share.
We have sought and will continue
to seek to reduce the possibility that our sponsor has to indemnify the trust account due to claims of creditors by endeavoring to have
all third parties (other than our independent registered accounting firm), prospective target businesses or other entities with which
we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account.
Our sponsor is also not be liable as to any claims under our indemnity of the underwriters of our initial public offering against certain
liabilities, including liabilities under the Securities Act. We may have access to use the amounts held outside the trust account ($440.475
as of December 31, 2021) 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, shareholders who received funds, from our trust account could be liable for claims made by
creditors.
If we file a bankruptcy or
insolvency petition or an involuntary bankruptcy insolvency 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 shareholders. To the extent any bankruptcy claims deplete the trust account, we
cannot assure you we will be able to return $10.00 per share to our public shareholders. Additionally, if we file a bankruptcy insolvency
petition or an involuntary bankruptcy insolvency petition is filed against us that is not dismissed, any distributions received by shareholders
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 insolvency court could seek to recover all amounts received by our shareholders. 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 shareholders from the trust account prior to addressing the claims
of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public shareholders are
entitled to receive funds from the trust account only upon the earlier of (i) the completion of our initial business combination,
(ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated
memorandum and articles of association to (A) modify the substance or timing of our obligation to provide holders of our Class A
ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public
shares if we do not complete our initial business combination by January 8, 2023, or (B) with respect to any other provision relating
to shareholders’ 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 by January 8, 2023, subject to applicable law. In no other circumstances will
a shareholder have any right or interest of any kind to or in the trust account. In the event we seek shareholder approval in connection
with our initial business combination, a shareholder’s voting in connection with the business combination alone will not result
in a shareholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such shareholder must have
also exercised its redemption rights described above.
Amended and Restated Memorandum and Articles
of Association
Our amended and restated
memorandum and articles of association contain certain requirements and restrictions that apply to us until the consummation of our initial
business combination. If we seek to amend any provisions of our amended and restated memorandum and articles of association relating to
shareholders’ rights or pre-business combination activity, we will provide dissenting public shareholders with the opportunity
to redeem their public shares in connection with any such vote. Our sponsor, officers and directors have agreed to waive any redemption
rights with respect to their founder shares and public shares in connection with the completion of our initial business combination. Specifically,
our amended and restated memorandum and articles of association provide, among other things, that:
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prior to the consummation of our initial business combination, we shall either (1) seek shareholder approval of our initial business combination at a general meeting called for such purpose at which shareholders may seek to redeem their shares, regardless of whether they vote for or against the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable) or (2) provide our public shareholders with the opportunity to tender their shares to us by means of a tender offer (and thereby avoid the need for a shareholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable) in each case subject to the limitations described herein; |
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we will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 either prior to or upon such consummation and, solely if we seek shareholder approval, we receive the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company; |
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if our initial business combination is not consummated by January 8, 2023, then our existence will terminate and we will distribute all amounts in the trust account; and |
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prior to our initial business combination, we may not issue additional ordinary shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination. |
These provisions cannot be
amended without the approval of a special resolution under Cayman Islands law, which requires the approval of holders of at least two-thirds of
our ordinary shares who attend and vote in a general meeting. In the event we seek shareholder approval in connection with our initial
business combination, our amended and restated memorandum and articles of association provide that we may consummate our initial business
combination only if approved by an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of
the shareholders who attend and vote at a general meeting of the company.
Competition
In identifying, evaluating
and selecting a target business for our initial business combination, we may encounter intense competition from other entities having
a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating
businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting
business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human
and other resources than us. Our ability to acquire larger target businesses will be limited by our available financial resources. This
inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash
in connection with our public shareholders who exercise their redemption rights may reduce the resources available to us for our initial
business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by
certain target businesses. This may make it more difficult for us to consummate an initial business combination with a target business.
Any of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Employees
We have three 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 our officers
or any other members of our management team devote in any time period varies based on the current stage of the business combination process.
Periodic Reporting and Financial Information
We registered our units,
Class A ordinary shares 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 shareholders
with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials
sent to shareholders to assist them in assessing the target business. These financial statements may be required to be prepared in accordance
with, or be reconciled to, U.S. GAAP, or IFRS, depending on the circumstances and the historical financial statements may be required
to be audited in accordance with the 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 statements in time for us to disclose such statements in accordance with
federal proxy rules and complete our initial business combination within the prescribed time frame. While this may limit the pool of potential
acquisition candidates, we do not believe that this limitation will be material.
We are required to evaluate
our internal control procedures for the fiscal year ending December 31, 2021 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 have filed a Registration
Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we are
subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend
our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
We 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 shareholder 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 January 8, 2026, (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 ordinary shares that is held by non-affiliates exceeds $700 million as of the prior June 30th,
and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.