Item 1. BUSINESS
Overview
We are a blank check company incorporated in November
2020 as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share
purchase, reorganization or other similar business combination, involving one or more businesses or assets, which we refer to as our initial
business combination. We have generated no operating revenues to date and we do not expect that we will generate operating revenues until
we consummate our initial business combination.
We have concentrated our efforts on identifying
technology and financial services technology, or fintech, companies that power transformation and innovation. Our expertise lends itself
well to pursuing platforms related to the financial services, real estate, insurance, ecommerce and related technology infrastructure
sectors, but we are not required to complete our initial business combination with a business in these industries and, as a result, we
may pursue a business combination outside of these industries. We expect to pursue global businesses but may also acquire a domestic company.
We do not intend to acquire companies that have speculative business plans or are excessively leveraged.
At December 31, 2021, we had not commenced any
operations. All activity through December 31, 2021 relates to the Company’s formation and its initial public offering, and identifying
a target company for our initial business combination.
The registration statement for our initial public
offering was declared effective on February 22, 2021. On February 25, 2021, we consummated the initial public offering of 25,000,000 units,
which included the partial exercise by the underwriter of its over-allotment option in the amount of 3,000,000 units, generating gross
proceeds of $250,000,000.
Simultaneously with the closing of the initial
public offering, we consummated the sale of 660,000 placement units at a price of $10.00 per unit in a private placement to our sponsor
and Cantor Fitzgerald, generating gross proceeds of $6,600,000.
Following the closing of the initial public offering
on February 25, 2021, an aggregate amount of $250,000,000 ($10.00 per unit) from the net proceeds of the sale of the units in the initial
public offering and the placement units was placed in a trust account and invested in U.S. government securities, within the meaning set
forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity
of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest
only in direct U.S. government treasury obligations, as determined by the Company, until the earlier of: (i) the consummation of a business
combination, (ii) the redemption of any public shares in connection with a shareholder vote to amend our amended and restated memorandum
and articles of association (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete
a business combination by February 25, 2023 or (B) with respect to any other provision relating to shareholders’ rights or pre-initial
business combination activity; or (iii) the distribution of the trust account, if we are unable to complete a business combination within
the combination period or upon any earlier liquidation of us.
Business Combination Agreement
As previously
announced, on August 3, 2021, we entered into a Business Combination Agreement (the “Business Combination Agreement”)
with Pico Quantitative Trading Holdings LLC (“Pico”).
On February
24, 2022, the Business Combination Agreement was terminated (the “Termination”).
As a result of the Termination, the
Business Combination Agreement will be of no further force and effect, and certain transaction agreements entered into in connection
with the Business Combination Agreement, including, but not limited to, (i) the Sponsor Share Restriction Agreement, dated as of August
3, 2021, by and among the Company, FTAC Athena Sponsor, LLC, and FTAC Athena Advisors, LLC, (ii) the Support Agreement, dated as of August
3, 2021, by and among the Company, FTAC Athena Sponsor, LLC, FTAC Athena Advisors, LLC, Pico and the members of Pico party thereto, and
(iii) the PIPE Subscription Agreements, each dated August 3, 2021, between the Company and certain investors, will automatically either
be terminated in accordance with their terms or be of no further force and effect. Neither party will be required to pay the other a
termination fee as a result of the Termination.
Business Combination Structure
We anticipate structuring our initial business
combination to acquire 100% of the equity interest or assets of the target business or businesses.
NASDAQ rules require that our initial business
combination must 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. Our board of directors will make the determination as to the fair market
value of our initial business combination. If our board of directors is not able to independently determine the fair market value of our
initial business combination, we will obtain an opinion from an independent investment banking firm or another independent entity that
commonly renders valuation opinions with respect to the satisfaction of such criteria. While we consider it unlikely that our board of
directors will not be able to make an independent determination of the fair market value of our initial business combination, it may be
unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of
uncertainty as to the value of a target’s assets or prospects.
Business Strategy
We will seek to capitalize on the significant technology,
financial services, financial technology and banking experience and contacts of Betsy Z. Cohen, our Chairman of the Board, and Amanda
J. Abrams, our President and Chief Executive Officer, and our board of directors, to identify, evaluate and acquire a technology or fintech
business, although we may pursue a business combination outside of those industries. If we elect to pursue an investment outside of those
industries, our management’s expertise related to those industries may not be directly applicable to its evaluation or operation,
and the information contained in this Annual Report regarding that industry might not be relevant to an understanding of the business
that we elect to acquire.
Members of our board of directors and management
team have also served as executive officers, directors and/or advisors of FinTech Acquisition Corp., or FinTech I, a former blank check
company which raised $100.0 million in its initial public offering in February 2015 and completed its initial business combination
when it acquired FTS Holding Corporation in July 2016, which we refer to as the FinTech I Acquisition, in connection with which
FinTech I changed its name to CardConnect Corp. The common stock of CardConnect Corp. was traded on NASDAQ under the symbol “CCN”
until CardConnect Corp. was acquired by First Data Corporation in July 2017. Members of our board of directors and management team
have also served as executive officers, directors and/or advisors of FinTech Acquisition Corp. II, or FinTech II, a blank check company
which raised $175.0 million in its initial public offering in January 2017 and completed its initial business combination when
it acquired Intermex Holdings II in July 2018, which we refer to as the FinTech II Acquisition, in connection with which FinTech
II changed its name to International Money Express, Inc. Members of our board of directors and management team have also served as executive
officers, directors and/or advisors of FinTech Acquisition Corp. III, or FinTech III, a blank check company which raised $345.0 million
in its initial public offering in November 2018 and completed its initial business combination with Paya, Inc. in October 2020,
which we refer to as the FinTech III Acquisition. Members of our board of directors and management team have also served as executive
officers, directors and/or advisorss of FinTech Acquisition Corp. IV, or FinTech IV, a blank check company which raised $230.0 million
in its initial public offering in September 2020 and completed its initial business combination with PWP Holdings LP, in June 2021,
which we refer to as the FinTech IV Acquisition. Members of our board of directors and management team also served as executive officers,
directors and/or advisors of FTAC Olympus Acquisition Corp., or FTAC Olympus, a blank check company which raised $754.7 million in
its initial public offering in August 2020 and completed its initial business combination with Payoneer Inc. in June 2021, which
we refer to as the FTAC Olympus Acquisition. Additionally, members of our board of directors and management team also currently serve
as executive officers, directors and/or advisors of: FinTech Acquisition Corp. V (NASDAQ: FTCV), or FinTech V, a blank check company which
raised $250.0 million in its initial public offering in December 2020; FinTech Acquisition Corp. VI (NASDAQ: FTVI), or FinTech VI, a blank
check company which raised $250.0 million in its initial public offering in June 2021; FTAC Hera Acquisition Corp. (NASDAQ:
HERA), or FTAC Hera, a blank check company which raised approximately $851 million in its initial public offering in March 2021;
and FTAC Emerald Acquisition Corp. (NASDAQ: EMLD), or FTAC Emerald, a blank check company which raised $220 million in its initial
public offering in December 2021. We believe that potential sellers of target businesses will view the fact that members of our board
of directors and management team have successfully closed multiple business combinations with vehicles similar to our company as a positive
factor in considering whether or not to enter into a business combination with us. However, past performance is not a guarantee of success
with respect to any business combination we may consummate.
Ms. Cohen, our Chairman, and Ms. Abrams,
our President and Chief Executive Officer, have extensive experience in the technology and financial services industries, generally, and
the financial technology industry, in particular, as well as extensive experience in operating technology and financial services companies
in a public company environment.
Ms. Cohen, with over 42 years of experience,
was a founder of Bancorp and served as Bancorp’s Chief Executive Officer from September 2000 through December 2014. Ms. Cohen
served as Chairman of the board of directors of FinTech IV until the FinTech IV Acquisition, as Chairman of the Board of Directors of
FTAC Olympus until the FTAC Olympus Acquisition, as Chairman of the board of directors of FinTech III until the FinTech III Acquisition,
as Chairman of the board of directors of FinTech II until the FinTech II Acquisition, and also served as the Chairman of the
board of directors of FinTech I until the Fintech I Acquisition and, following the FinTech I Acquisition, served on the
post-business combination board of directors until May 2017. She is currently the Chairman of the Board of FinTech V, FinTech
VI, FTAC Hera and FTAC Emerald. Ms. Cohen is also a founder of RAIT and was its Chairman until December 2010 and its Chief Executive
Officer until December 2006. She was also the founder and Chief Executive Officer of JeffBanks and its subsidiary banks from 1974
until the merger of JeffBanks into Hudson United Bancorp in 1999.
Ms. Abrams is currently the Chief Executive
Officer of FinTech Masala, LLC, the parent company of the sponsor of FinTech II, FinTech III, FinTech IV, FinTech V and FinTech VI. Ms. Abrams
also serves as a Managing Director of Cohen & Company, Inc. (NYSE American: COHN), a financial services company with approximately
$2.24 billion in assets under management as of September 30, 2021, whose subsidiaries sponsored Insurance Acquisition Corp.,
or INSU I, a blank check company that raised approximately $150.7 million in its initial public offering in March 2019 and completed
its initial business combination when it merged with affiliates of Shift Technologies, Inc. (NASDAQ: SFT) in October 2020; INSU Acquisition
Corp. II, a blank check company that raised $230 million in its initial public offering in September 2020 and completed its
initial business combination when it merged with Metromile, Inc. in February 2021 (NASDAQ: MILE), and INSU Acquisition Corp. III,
a blank check company that raised $250 million in its initial public offering in December 2020. Since October 2020, Ms. Abrams
has served as a board observer for Shift Technologies following the merger with INSU I. Previously, she served as the General Counsel
of CardConnect Corp., a provider of integrated payment processing solutions to merchants, following the company’s merger with FinTech
I, until CardConnect’s acquisition by First Data Corp. Prior to that Ms. Abrams was with Ledgewood, PC, where she advised public
and private companies in capital markets transactions, mergers and acquisitions and general corporate matters.
We have identified the following criteria that
we intend to use in evaluating business transaction opportunities. We expect that no individual criterion will entirely determine a decision
to pursue a particular opportunity. Further, any particular business transaction opportunity which we ultimately determine to pursue may
not meet one or more of these criteria:
|
● |
Recurring Revenue. We have sought to acquire one or more businesses or assets that have a history of, or potential for, strong, sustainable recurring and predictable revenue streams. |
|
|
|
|
● |
Strong management team. We have sought to acquire one or more businesses or assets that have strong, experienced management teams or those that provide a platform for us to assemble an effective and experienced management team. We have focused on management teams with a proven track record of driving revenue growth, enhancing profitability and creating value for their shareholders. |
|
|
|
|
● |
Opportunities for add-on acquisitions. We have sought to acquire one or more businesses or assets that we can grow both organically and through acquisitions. In addition, we believe that our ability to source proprietary opportunities and execute transactions will help the business we acquire grow through acquisition, and thus serve as a platform for further add-on acquisitions. |
|
|
|
|
● |
Differentiated business niche. We have sought to acquire one or more businesses or assets that have a leading or niche market position and that demonstrate advantages when compared to their competitors, which may help to create barriers to entry against new competitors. We anticipate that these barriers to entry will enhance the ability of these businesses or assets to generate strong profitability and free cash flow. |
|
|
|
|
● |
Diversified customer and supplier base. We have sought to acquire one or more businesses or assets that have a diversified customer and supplier base, which are generally better able to endure economic downturns, industry consolidation, changing business preferences and other factors that may negatively impact their customers, suppliers and competitors. |
Competitive Strengths
We believe we have the following competitive strengths:
|
● |
Management Operating and Investing Experience.
Our directors and executive officers have significant experience in the financial services and financial technology industries. Betsy
Z. Cohen has over 42 years’ experience in the financial services industry and is a founder of and, until her retirement in December
2014, served as chief executive officer of, The Bancorp, Inc., a financial holding company whose banking subsidiary, The Bancorp Bank,
provides banking services principally through the internet. Additionally, Ms. Cohen served as Chairman of the Board of FinTech I, FinTech
II, FinTech III, FinTech IV and FTAC Olympus and currently serves as Chairman of the Board of FinTech V, FinTech VI, FTAC Hera and FTAC
Emerald. Amanda J. Abrams is currently the Chief Executive Officer of FinTech Masala, LLC, the parent company of the sponsor of FinTech
II, FinTech III, FinTech IV, FinTech V and FinTech VI. Ms. Abrams also serves as a Managing Director of Cohen & Company,
Inc. (NYSE American: COHN), a financial services company whose subsidiaries sponsored INSU I, INSU II and INSU III. She is currently a
board observer for Shift Technologies following the merger with INSU I, and previously she served as the General Counsel of CardConnect
Corp., a provider of integrated payment processing solutions to merchants, following the company’s merger with FinTech I.
We believe that this breadth of experience provides us with a
competitive advantage in evaluating businesses and acquisition opportunities in our target industry. |
|
● |
Established Deal Sourcing Network. As a result of their extensive experience in the financial services and venture capital industries, our team has developed a broad array of contacts in these industries. We believe that these contacts will be important in generating acquisition opportunities for us. |
|
|
|
|
● |
Strong Financial Position and Flexibility. With a trust account initially in the amount of $250 million and a public market for our ordinary shares, we offer a target business a variety of options to facilitate a future business transaction and fund the growth and expansion of business operations. Because we are able to consummate an initial business transaction using our equity, debt, cash or a combination of the foregoing, we have the flexibility to design an acquisition structure to address the needs of the parties. We have not, however, taken any steps to secure third party financing and would only do so in connection with the consummation of our initial business transaction. Accordingly, our flexibility in structuring an initial business transaction may be constrained by our ability to arrange third-party financing, if required. |
|
|
|
|
● |
Status as a Public Company. We believe our structure makes us an attractive business transaction partner to prospective target businesses. As an existing public company, we offer a target business an alternative to the traditional initial public offering through a merger or other business transaction with us. In this situation, the owners of the target business would exchange their shares of stock or other equity interests in the target business for our shares. Once public, we believe the target business would have greater access to capital and additional means of creating management incentives that are better aligned with shareholders’ interests than it would as a private company. We believe that being a public company can also augment a company’s profile among potential new customers and vendors and aid it in attracting and retaining talented employees. |
Effecting Our Initial Business Combination
General
We are not presently engaged in, and we will not
engage in, any operations until our initial business combination. We intend to effectuate our initial business combination using cash
from the proceeds of the initial public offering and the private placement, our equity, debt or a combination of these as the consideration
to be paid in our initial business combination.
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.
While we have not contacted any of the prospective
target businesses that FinTech I, FinTech II, FinTech III, FinTech IV, FTAC Olympus, INSU I or INSU II had considered and rejected while
searching for target businesses to acquire, we may do so in the future if we become aware that the valuations, operations, profits or
prospects of such target business, or the benefits of any potential transaction with such target business, would be attractive. Accordingly,
there is no current basis for shareholders to evaluate the possible merits or risks of the target business with which we may ultimately
complete our initial business combination. Although our management will assess the risks inherent in a particular target business with
which we may combine, we cannot assure you that this assessment will result in our identifying all risks that a target business may encounter.
Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those
risks will adversely impact a target business.
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. Our initial business combination must also be approved by a majority of our independent
directors in accordance with NASDAQ rules. 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. At this time, we are not a party to any arrangement or understanding with any third party with respect to raising any additional
funds through the sale of securities or otherwise.
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. Such sources became aware that we were seeking a business
combination candidate by a variety of means, including publicly available information relating to the initial public offering, public
relations and marketing efforts or direct contact by management following the completion of the initial public 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 our sponsor, officers or directors, or any entities with which they are affiliated, be
paid 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 (i) repayment of loans
made to us prior to the date of the initial public offering by our sponsor and its affiliates to cover offering-relating and organization
expenses, (ii) repayment of incremental 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), (iii) payments to our sponsor or its affiliate
of a total of $32,500 per month for office space, administrative and shared personnel support services, (iv) payment of certain
consulting fees to persons engaged by an entity affiliated with certain of our directors and officers, (v) at the closing of our
initial business combination, a customary advisory fee to affiliates of our sponsor, in an amount that constitutes a market standard advisory
fee for comparable transactions and services provided, and (vi) reimbursements for any out-of-pocket expenses related to identifying,
investigation and completing an initial business combination. None of the initial holders, our officers, our directors or any entity with
which they are affiliated will be allowed to receive any compensation, finder’s fees or consulting fees from a prospective acquisition
target in connection with a contemplated acquisition of such target by us. Although some of our officers and directors may enter
into employment or consulting agreements with the acquired business following our initial 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. 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 that is a member of FINRA or an independent accounting firm, and reasonably acceptable to Cantor Fitzgerald, as
representative of the underwriters of the initial public offering, 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 tender offer or proxy solicitation materials, as applicable, related to our initial business combination.
Selection of a target business and structuring of our initial business
combination
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.
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. 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, 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 taken into account for purposes of NASDAQ’s
80% fair market value test. There is no basis for shareholders to evaluate the possible merits or risks of any target business with which
we may ultimately complete our initial business combination.
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, we
expect to conduct a thorough due diligence review, which may encompass, 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 that will be made
available to us.
The time required to select and evaluate a target
business and to structure and complete our initial business combination, and the costs associated with this process, are not currently
ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of 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.
Lack of business diversification
For an indefinite period of time after consummation
of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business.
Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it
is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business.
By consummating a business combination with only a single entity, our lack of diversification may:
|
● |
subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and |
|
|
|
|
● |
cause us to depend on the marketing and sale of a single product or limited number of products or services. |
Limited ability to evaluate the target’s management team
Although we closely scrutinize the management of
a prospective target business when evaluating a target business, our assessment of the target business’ management may not prove
to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company.
Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty.
While it is possible that one or more of our directors will remain associated in some capacity with us following our business combination,
it is unlikely that any of them will devote their full efforts to our affairs subsequent to our business combination. Moreover, we cannot
assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular
target business. We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined
company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our
initial business combination.
Following a business combination, we may seek to
recruit additional managers to supplement the incumbent management team of the target business. We cannot assure you that we will have
the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary
to enhance the incumbent management.
Shareholders may not have the ability to approve a business combination
We may conduct redemptions without a shareholder
vote pursuant to the tender offer rules of the SEC, subject to the provisions of our amended and restated memorandum and articles of association.
However, we will seek shareholder approval if it is required by law or applicable stock exchange rule, or we may decide to seek shareholder
approval for business or other legal reasons.
Under NASDAQ’s listing rules, shareholder
approval would be required for our initial business combination if, for example:
|
● |
we issue ordinary shares that will be equal to or in excess of 20% of the number of Class A ordinary shares then outstanding (other than in a public offering); |
|
● |
any of our directors, officers or substantial shareholders (as defined by NASDAQ rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of ordinary shares could result in an increase in outstanding ordinary shares or voting power of 5% or more; or |
|
● |
the issuance or potential issuance of ordinary shares will result in our undergoing a change of control. |
Permitted purchases of our securities
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions in connection with our 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 consummation of our initial business combination, although as of the date of this Annual Report they have no
commitments, plans or intentions to engage in 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.
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 the business combination, where it appears that such requirement would otherwise not be met. This may
result in the consummation of a business combination that may not otherwise have been possible.
As a consequence of any such purchases, 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
anticipate that they may identify the shareholders with whom they 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.
Redemption rights for public shareholders upon consummation of our
initial business combination
We will provide our shareholders with the opportunity
to redeem all or a portion of their ordinary shares upon the consummation of our initial business combination at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial
business combination, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding public
shares, subject to the limitations described herein. The amount in the trust account is approximately $10.00 per public share (based on
the trust account balance as of December 31, 2021). There will be no redemption rights upon the consummation of our initial business combination
with respect to our warrants. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced
by the deferred underwriting commissions we will pay to the underwriters. Our sponsor, officers and directors have entered into a letter
agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares, any placement
shares and any public shares they may hold in connection with the completion of our initial business combination. However, our sponsor,
officers and directors will be entitled to redemption rights with respect to any public shares held by them if we fail to consummate a
business combination or liquidate by February 25, 2023. Cantor Fitzgerald will have the same redemption rights as a public shareholder
with respect to any public shares it acquires.
Manner of Conducting Redemptions
We will provide our public shareholders with the
opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination either
(i) in connection with a general meeting called to approve the business combination or (ii) by means of a tender offer. The decision as
to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in
our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction
would require us to seek shareholder approval under 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 requirements 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 NASDAQ, we will be required to comply with such 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:
|
● |
conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and |
|
● |
file tender offer documents with the SEC prior to consummating our initial business combination that 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 and 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 consummate 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
our 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:
|
● |
conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and |
|
● |
file proxy materials with the SEC. |
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 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 and placement shares held by them and any public shares purchased during or after the 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 at least 26.6% 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 any founder shares, placement 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 consummation of our initial business
combination if we seek shareholder approval
Notwithstanding the foregoing, if we seek shareholder
approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to
the tender offer rules, our amended and restated memorandum and articles of association provides that a public shareholder, together with
any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as
defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to an more than aggregate
of 15.0% of the shares sold in the initial public offering without our prior consent. We believe the restriction described above 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 15.0% of the shares sold in the 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 15.0% of the shares sold in the 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, we would not restrict our shareholders’ ability
to vote all of their shares (including all shares held by those shareholders that hold more than 15.0% of the shares sold in the initial
public offering) for or against our business combination.
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 our initial 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 (Deposit/Withdrawal At Custodian) 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. 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.
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.
The foregoing is different from the procedures
used by many blank check companies. In order to perfect redemption rights in connection with their business combinations, many blank check
companies would distribute proxy materials for the shareholders’ vote on an initial business combination, and a holder could simply
vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his redemption
rights. After the business combination was approved, the company would contact such shareholder to arrange for him to deliver his certificate
to verify ownership. As a result, the shareholder then had an “option window” after the consummation of the business combination
during which he could monitor the price of the company’s stock in the market. If the price rose above the redemption price, he could
sell his shares in the open market before actually delivering his shares to the company for cancellation. As a result, the redemption
rights, to which shareholders were aware they needed to commit before the general meeting, would become “option” rights surviving
past the consummation of the business combination until the redeeming holder delivered its certificate. The requirement for physical or
electronic delivery prior to the general meeting ensures that a redeeming holder’s election to redeem is irrevocable once the business
combination is approved.
Any request to redeem such shares, once made, may
be withdrawn at any time up to the date set forth in the tender offer materials or the date of the general meeting set forth in our proxy
materials, as applicable. Furthermore, if a holder of a public share delivers 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 business combination.
If the 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 our initial business combination is not consummated,
we may continue to try to consummate a business combination with a different target until February 25, 2023.
Redemption of public shares and liquidation if no initial business
combination
Our amended and restated memorandum and articles
of association provides that we will have only until February 25, 2023 to complete our initial business combination. If we are unable
to consummate our initial business combination by February 25, 2023, we will: (i) cease all operations except for the purpose of winding
up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (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
liquidating 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, dissolve and liquidate, 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 within such completion window.
Our sponsor, our officers and directors and Cantor
Fitzgerald have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares and
placement shares held by them if we fail to complete our initial business combination by February 25, 2023. However, if our sponsor, officers
or directors acquire public shares in or after the 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 February 25, 2023. Cantor
Fitzgerald will have the same redemption rights as a public shareholder with respect to any public shares it acquires.
Our sponsor, executive officers and directors have
agreed, pursuant to a letter agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles
of association that (i) would modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete
our initial business combination by February 25, 2023 or (ii) with respect to the other provisions relating to shareholders’ rights
or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their Class
A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit
in the trust account, including interest (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 remaining out of the approximately
$1,200,000 of proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose.
However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the
extent that there is any interest accrued in the trust account not required to pay taxes, we may request the trustee to release to us
an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of the net proceeds of
the 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 will seek to have all third parties
(other than our independent auditors), 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. FTAC Athena Sponsor, LLC 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 the 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 FTAC
Athena Sponsor, LLC will not be responsible to the extent of any liability for such third-party claims. We have not independently
verified whether FTAC Athena Sponsor, LLC has sufficient funds to satisfy its indemnity obligations and believe that FTAC Athena Sponsor,
LLC’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 FTAC Athena Sponsor, LLC 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 FTAC Athena Sponsor, LLC to enforce its indemnification obligations. While we currently expect that our independent directors
would take legal action on our behalf against FTAC Athena Sponsor, LLC 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 will seek to reduce the possibility that FTAC
Athena Sponsor, LLC will have to indemnify the trust account due to claims of creditors by endeavoring to have all third parties (other
than our independent auditors), 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. FTAC Athena Sponsor, LLC will also not be liable
as to any claims under our indemnity of the underwriters of the initial public offering against certain liabilities, including liabilities
under the Securities Act. We will have access to up to $1,200,000 from the proceeds of the initial public offering and the sale of the
placement units, with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation,
currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that
the reserve for claims and liabilities is insufficient, shareholders who received funds from our trust account could be liable for claims
made by creditors.
If we file a bankruptcy or winding-up petition
or an involuntary bankruptcy winding-up 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 winding-up petition or an involuntary
bankruptcy winding-up petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under
applicable debtor/creditor and/or bankruptcy 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 will be 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 redeem 100% of our public shares if we do not complete our initial
business combination by February 25, 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 February
25, 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.
Competition
In identifying, evaluating and selecting a target
business for our business combination, we 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 we do. 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 to our public shareholders who
exercise their redemption rights will reduce the resources available to us for an initial business combination and our outstanding warrants,
and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors
may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Facilities
We currently maintain our executive offices at
2929 Arch Street, Suite 1703, Philadelphia, PA 19104-2870. The cost for our use of this space is included in the $32,500 per month fee
we pay to our sponsor or its affiliate for office space, administrative and shared personnel support services. We consider our current
office space adequate for our current operations.
Employees
We currently have two officers. Members of our
management team are not obligated to devote any specific number of hours to our matters but they 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 whether a target business has been selected for our initial business
combination and the current stage of the initial business combination process. We do not intend to have any full time employees prior
to the consummation of our initial business combination.
Periodic Reporting and Financial Information
We have 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 contain financial statements
audited and reported on by our independent registered public accountants. The SEC maintains an Internet site that contains reports, proxy
and information statements, and other information regarding issuers like us that file electronically with the SEC at http://www.sec.gov.
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 will be required to evaluate our internal control
procedures for the fiscal year ending December 31, 2022 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a
large accelerated filer or an accelerated filer will we be required to have our internal control procedures audited. A target company
may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development
of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary
to complete any such acquisition.
We are an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions
from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”
including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from
the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments
not previously approved. If some shareholders find our securities less attractive as a result, there may be a less active trading market
for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides
that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the
Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay
the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage
of the benefits of this extended transition period.
We will remain an emerging growth company until
the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of the initial public offering,
(b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer,
which means the market value of our Class A ordinary shares that is held by non-affiliates equals or 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.
Item 1A. RISK FACTORS
You should consider
carefully all of the risks described below, which we believe are the principal risks that we face and of which we are currently aware,
and all of the other information contained in this report. If any of the events or developments described below occur, our business, financial
condition or results of operations could be negatively affected.
Risks Relating to our
Search for, Consummation of, or Inability to Consummate, a Business Combination and Post-Business Combination Risks
Our public shareholders may not be afforded an opportunity to
vote on our proposed business combination, which means we may consummate our initial business combination even though a majority of our
public shareholders do not support such a combination.
We may not hold a shareholder vote to approve our
initial business combination unless the business combination would require shareholder approval under applicable Cayman Islands law or
the rules of NASDAQ or if we decide to hold a shareholder vote for business or other legal reasons. Examples of transactions that would
not ordinarily require shareholder approval include asset acquisitions and share purchases, while transactions such as direct mergers
with our company or transactions where we issue more than 20% of our outstanding shares would require shareholder approval. For instance,
the NASDAQ rules currently allow us to engage in a tender offer in lieu of a general meeting but would still require us to obtain shareholder
approval if we were seeking to issue more than 20% of our outstanding shares to a target business as consideration in any business
combination. Therefore, if we were structuring a business combination that required us to issue more than 20% of our outstanding shares,
we would seek shareholder approval of such business combination. Except as required by law or NASDAQ rules, the decision as to whether
we will seek shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender
offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and
whether the terms of the transaction would otherwise require us to seek shareholder approval. Accordingly, we may consummate our initial
business combination even if holders of a majority of the public shares do not approve of the business combination we consummate.
If we seek shareholder approval of our initial business combination,
our sponsor, directors and officers have agreed to vote in favor of such initial business combination, regardless of how our public shareholders
vote.
Unlike other blank check companies in which the
initial shareholders agree to vote their founder shares in accordance with the majority of the votes cast by the public shareholders in
connection with an initial business combination, our sponsor, officers and directors have agreed (and their permitted transferees will
agree), pursuant to a letter agreement entered into with us, to vote any founder shares and any placement shares, as well as any public
shares purchased during or after the initial public offering, in favor of our initial business combination. Our initial shareholders own
shares representing 26.6% of our issued and outstanding ordinary shares, including placement shares. Accordingly, if we seek shareholder
approval of our initial business combination, it is more likely that the necessary shareholder approval will be received than would be
the case if our sponsor, officers and directors agreed to vote their founder shares, placement shares and public shares in accordance
with the majority of the votes cast by our public shareholders.
Your only opportunity to affect the investment decision regarding
a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek
shareholder approval of the business combination.
At the time of your investment in us, you will
not be provided with an opportunity to evaluate the specific merits or risks of one or more target businesses. Since our board of directors
may consummate a business combination without seeking shareholder approval, public shareholders may not have the right or opportunity
to vote on the business combination, unless we seek such shareholder approval. Accordingly, if we do not seek shareholder approval, your
only opportunity to affect the investment decision regarding a potential business combination will be limited to exercising your redemption
rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public
shareholders in which we describe our initial business combination.
The ability of our public shareholders to redeem their shares
for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to
enter into a business combination with a target.
We may seek to enter into a business combination
transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount
of cash. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing condition and, as
a result, would not be able to proceed with the business combination. Furthermore, 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.
Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 either
prior to or upon consummation of our initial business combination or such greater amount necessary to satisfy a closing condition as described
above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business
combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction
with us.
The ability of our public shareholders to exercise redemption
rights with respect to a large amount of our shares may not allow us to consummate the most desirable business combination or optimize
our capital structure.
At the time we enter into an agreement for our
initial business combination, we will not know how many shareholders may exercise their redemption rights, and therefore we will need
to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our business
combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have
a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements, or
arrange for third party financing. In addition, if a larger number of shares are submitted for redemption than we initially expected,
we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third party financing.
Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable
levels. Furthermore, this dilution would increase to the extent that the anti-dilution provisions of the Class B ordinary shares
result in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B shares at the
time of the initial business combination. The above considerations may limit our ability to complete the most desirable business
combination available to us or optimize our capital structure.
The ability of our public shareholders to exercise redemption
rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful
and that you would have to wait for liquidation in order to redeem your shares.
If our business combination agreement requires
us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing,
the probability that our initial business combination would be unsuccessful is increased. If our initial business combination is unsuccessful,
you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate
liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to the pro
rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit
of funds expected in connection with our redemption until we liquidate or you are able to sell your shares in the open market.
The requirement that we consummate a business combination by
February 25, 2023 may give potential target businesses leverage over us in negotiating a business combination and may decrease our ability
to conduct due diligence on potential business combination targets as we approach our dissolution deadline, which could undermine our
ability to consummate a business combination on terms that would produce value for our shareholders.
Any potential target business with which we enter
into negotiations concerning a business combination will be aware that we must consummate our initial business combination by February
25, 2023. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do
not complete our initial business combination with that particular target business, we may be unable to complete our initial business
combination with any target business. This risk will increase as we get closer to February 25, 2023. In addition, we may have limited
time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive
investigation.
If the net proceeds from the initial public offering and the
sale of the placement units not being held in the trust account are insufficient, it could limit the amount available to fund our search
for a target business or businesses and complete our initial business combination and we will depend on loans from our sponsor or management
team to fund our search for a business combination, to pay our taxes and to complete our initial business combination.
Of the net proceeds of the initial public offering
and the sale of the placement units, only $271,045 was available to us as of December 31, 2021 outside the trust account to fund our working
capital requirements. If we are required to seek additional capital, we would need to borrow funds from our sponsor, management team or
other third parties to operate, or we may be forced to liquidate. Neither of our sponsor, members of our management team nor any of their
affiliates is under any obligation to advance funds to us in such circumstances. Any such advances would be repaid only from funds held
outside the trust account or from funds released to us upon completion of our initial business combination. If we are unable to complete
our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate
the trust account. Consequently, our public shareholders may receive only approximately $10.00 per share (or less in certain circumstances)
on our redemption of our public shares, and our warrants will expire worthless. In certain circumstances, our public shareholders may
receive less than $10.00 per share on the redemption of their shares. Please see “If third parties bring claims against us, the
proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00
per share” and other risk factors in this section.
Our search for a business combination, and any target business
with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19)
outbreak and the status of debt and equity markets.
The COVID-19 outbreak has and a significant
outbreak of other infectious diseases could result in a widespread health crisis that could adversely affect the economies and financial
markets worldwide, and the business of any potential target business with which we consummate a business combination could be materially
and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 continue
to restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services
providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our
search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new
information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among
others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability
to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination,
may be materially adversely affected. In addition, our ability to consummate a transaction may be dependent on the ability to raise equity
and debt financing which may be impacted by COVID-19 and other events, including as a result of increased market volatility, decreased
market liquidity and third-party financing being unavailable on terms acceptable to us or at all.
We may not be able to consummate our initial business combination
by February 25, 2023, in which case we would cease all operations except for the purpose of winding up and we would redeem our public
shares and liquidate, in which case our public shareholders may only receive $10.00 per share, or less than such amount in certain circumstances,
and our warrants will expire worthless.
Our amended and restated memorandum and articles
of association provide that we must complete our initial business combination by February 25, 2023. We may not be able to find a suitable
target business and complete our initial business combination by that date. If we have not completed our initial business combination
by February 25, 2023, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible
but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable, and less up to $100,000
of interest to pay dissolution expenses) divided by the number of then outstanding public shares, which redemption will completely extinguish
public 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. In such case, our public shareholders may only receive $10.00 per share, and
our warrants will expire worthless. In certain circumstances, our public shareholders may receive less than $10.00 per share on the redemption
of their shares.
If we are unable to consummate our initial business combination
by February 25, 2023, our public shareholders may be forced to wait beyond such date before redemption from our trust account.
If we are unable to consummate our initial business
combination by February 25, 2023, we will distribute the aggregate amount then on deposit in the trust account (less up to $100,000 of
the net interest earned thereon to pay dissolution expenses), pro rata to our public shareholders by way of redemption and cease all operations
except for the purposes of winding up of our affairs, as further described herein. Any redemption of public shareholders from the trust
account shall be effected automatically by function of our amended and restated memorandum and articles of association prior to any voluntary
winding up. If we are required to windup, liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders,
as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies
Law. In that case, investors may be forced to wait beyond February 25, 2023 before the redemption proceeds of our trust account become
available to them and they receive the return of their pro rata portion of the proceeds from our trust account. We have no obligation
to return funds to investors prior to the date of our redemption or liquidation unless we consummate our initial business combination
prior thereto and only then in cases where investors have sought to redeem their ordinary shares. Only upon our redemption or any liquidation
will public shareholders be entitled to distributions if we are unable to complete our initial business combination.
If we seek shareholder approval of our initial business combination,
our sponsor, directors, officers and their affiliates may elect to purchase shares from public shareholders, which may influence a vote
on a proposed business combination and reduce the public “float” f our Class A ordinary shares.
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules,
our sponsor, directors, officers or their affiliates may purchase shares in the open market or in privately negotiated transactions either
prior to or following the consummation of our initial business combination, although they are under no obligation to do so. 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. 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. 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. The purpose of such purchases could be to vote such shares in favor of the business
combination and thereby increase the likelihood of obtaining shareholder approval of the business combination, or to satisfy a closing
condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our
business combination, where it appears that such requirement would otherwise not be met. This may result in the completion of our business
combination that may not otherwise have been possible.
In addition, if such purchases are made, the public
“float” of our Class A ordinary shares and the number of beneficial holders of our securities may be reduced, possibly making
it difficult to obtain or maintain the quotation, listing or trading of our securities on a national securities exchange.
If a shareholder fails to receive notice of our offer to redeem
our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares,
such shares may not be redeemed.
We will comply with the tender offer rules or proxy
rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these
rules, if a shareholder fails to receive our tender offer or proxy materials, as applicable, such shareholder may not become aware of
the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that we will furnish
to holders of our public shares in connection with our initial business combination will describe the various procedures that must be
complied with in order to validly tender or redeem public shares. In the event that a shareholder fails to comply with these procedures,
its shares may not be redeemed. Please see “Business — Tendering share certificates in connection with attender offer or redemption
rights.”
You will not have any rights or interests in funds from the trust
account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares
or warrants, potentially at a loss.
Our public shareholders will be entitled to receive
funds from the trust account only upon the earlier to occur 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 redeem 100% of our public shares if we do not complete our initial
business combination by February 25, 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 February 25, 2023, subject to applicable law and as further described herein. In no other circumstances will a public shareholder have
any right or interest of any kind in the trust account. Accordingly, to liquidate your investment, you may be forced to sell your public
shares or warrants, potentially at a loss.
You will not be entitled to protections normally afforded to
investors of many other blank check companies.
Since the net proceeds of the initial public offering
and the sale of the placement units are intended to be used to complete an initial business combination with a target business that has
not been identified, we may be deemed to be a “blank check” company under the United States securities laws. However, because
we had net tangible assets in excess of $5.0 million upon the completion of the initial public offering and the sale of the placement
units and we filed a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules
promulgated by the SEC to protect investors in blank check companies, such as Rule 419 under the Securities Act. Accordingly, investors
will not be afforded the benefits or protections of those rules. Among other things, this means our units were immediately tradable and
we have a longer period of time to complete a business combination than would companies subject to Rule 419. Moreover, if the initial
public offering was subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account
to us unless and until the funds in the trust account were released to us in connection with our consummation of an initial business combination.
Because of our limited resources and the significant competition
for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are unable
to complete our initial business combination, our public shareholders may receive only approximately $10.00 per share, or less in certain
circumstances, on our redemption, and our warrants will expire worthless.
We expect to encounter intense competition from
other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships),
other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire.
Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly,
acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical,
human and other resources, or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted
with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire, our ability
to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources.
This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses.
Furthermore, if we are obligated to pay cash for
the Class A ordinary shares redeemed and, in the event we seek shareholder approval of our initial business combination, we make purchases
of our Class A ordinary shares, potentially reducing the resources available to us for our initial business combination. Any of these
obligations may place us at a competitive disadvantage in successfully negotiating a business combination. If we are unable to complete
our initial business combination, our public shareholders may receive only approximately $10.00 per share (or less in certain circumstances)
(based on the trust account balance as of December 31, 2021) on the liquidation of our trust account and our warrants will expire worthless.
In certain circumstances, our public shareholders may receive less than $10.00 per share on the redemption of their shares.
If the net proceeds of the initial public offering not being
held in the trust account are insufficient to allow us to operate until at least February 25, 2023, we may be unable to complete our initial
business combination.
The funds available to us outside of the trust
account may not be sufficient to allow us to operate until at least February 25, 2023, assuming that our initial business combination
is not completed by that date. We believe that the funds available to us outside of the trust account will be sufficient to allow us to
operate until at least February 25, 2023; however, we cannot assure you that our estimate is accurate. Of the funds available to us, we
could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could
also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed
to keep target businesses from “shopping” around for transactions with other companies on terms more favorable to such target
businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we
entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required
to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for,
or conduct due diligence with respect to, a target business. If we are unable to complete our initial business combination, our public
shareholders may receive only $10.00 per share on the liquidation of our trust account and our warrants will expire worthless. In certain
circumstances, our public shareholders may receive less than $10.00 per share upon our liquidation.
Subsequent to the consummation of our initial business combination,
we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative
effect on our financial condition, results of operations and our share price, which could cause you to lose some or all of your investment.
Even if we conduct extensive due diligence on a
target business with which we combine, we cannot assure you that this diligence will surface all material issues that may be present inside
a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or
that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced
to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result
in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known
risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items
and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market
perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which
we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt
financing. Accordingly, any shareholders who choose to remain shareholders following the business combination could suffer a reduction
in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction in value.
If third parties bring claims against us, the proceeds held in
the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per share.
Our placing of funds in the trust account may not
protect those funds from third party claims against us. Although we seek to have all third parties (other than our independent auditors),
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, such parties may not execute
such agreements, or even if they execute such agreements, they may not be prevented from bringing claims against the trust account, including,
but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the
enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds
held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account,
our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that
has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us
than any alternative.
Examples of possible instances where we may engage
a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills
are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases
where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities
will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements
with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to
complete our business combination within the required time frame, or upon the exercise of a redemption right in connection with our business
combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within
the 10 years following redemption. Accordingly, the per-share redemption amount received by public shareholders could be less than the
$10.00 per share initially held in the trust account due to claims of such creditors.
FTAC Athena Sponsor, LLC 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 the value of the trust assets, in each case net of the interest
which may be withdrawn to pay taxes, except as 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 the initial public offering against certain
liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable
against a third party, FTAC Athena Sponsor, LLC will not be responsible to the extent of any liability for such third party claims. We
have not independently verified whether FTAC Athena Sponsor, LLC has sufficient funds to satisfy its indemnity obligations and believe
that FTAC Athena Sponsor, LLC’s only assets are securities of our company. FTAC Athena Sponsor, LLC may not have sufficient funds
available to satisfy those obligations. We have not asked FTAC Athena Sponsor, LLC to reserve for such obligations, and therefore, no
funds are currently set aside to cover any such obligations. As a result, if any such claims were successfully made against the trust
account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per public share.
In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in
connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties
including, without limitation, claims by third parties and prospective target businesses.
Our directors may decide not to enforce the indemnification obligations
of FTAC Athena Sponsor, LLC, resulting in a reduction in the amount of funds in the trust account available for distribution to our public
shareholders.
In the event that the proceeds in the trust account
are reduced below the lesser of (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account
as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest
which may be withdrawn to pay taxes, and FTAC Athena Sponsor, LLC asserts that it is unable to satisfy its obligations or that it has
no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against
FTAC Athena Sponsor, LLC to enforce its indemnification obligations. While we currently expect that our independent directors would take
legal action on our behalf against FTAC Athena Sponsor, LLC to enforce its indemnification obligations to us, it is possible that our
independent directors in exercising their business judgment may choose not to do so in any particular instance. If our independent directors
choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public
shareholders may be reduced below $10.00 per share.
If, after we distribute the proceeds in the trust account to
our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against
us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our board of directors
may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us
to claims of punitive damages.
If, after we distribute the proceeds in the trust
account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is
filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or
bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or
insolvency court could seek to recover all amounts received by our shareholders. In addition, our board of directors may be viewed as
having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive
damages, by paying public shareholders from the trust account prior to addressing the claims of creditors.
If, before distributing the proceeds in the trust account to
our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against
us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per-share
amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust
account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is
filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may
be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To
the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our shareholders
in connection with our liquidation may be reduced.
Our shareholders may be held liable for claims by third parties
against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an insolvent liquidation,
any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date
on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result,
a liquidator could seek to recover all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached
their fiduciary duties to us or our creditors and/or may have acted in bad faith, and thereby exposing themselves and our company to claims,
by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will
not be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted any
distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course
of business would be guilty of an offence and may be liable to a fine of $18,292.68 and to imprisonment for five years in the Cayman Islands.
We may not hold an annual general meeting until after the consummation
of our initial business combination. Our public shareholders will not have the right to appoint directors prior to the consummation of
our initial business combination.
In accordance with NASDAQ corporate governance
requirements, we are not required to hold an annual general meeting until no later than one year after our first fiscal year end following
our listing on NASDAQ. There is no requirement under the Companies Law for us to hold annual or general meetings or appoint directors.
Until we hold an annual general meeting, public shareholders may not be afforded the opportunity to discuss company affairs with management.
In addition, as holders of our Class A ordinary shares, our public shareholders will not have the right to vote on the appointment of
directors prior to consummation of our initial business combination.
Although we have identified general criteria and guidelines that
we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target
that does not meet such criteria and guidelines and, as a result, the target business with which we enter into our initial business combination
may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria and
guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business
combination will not have all of these positive attributes. If we consummate a business combination with a target that does not meet some
or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of our general
criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria
and guidelines, a greater number of shareholders may exercise their redemption rights, which may make it difficult for us to meet any
closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if shareholder
approval of the transaction is required by law or Nasdaq rules, or we decide to obtain shareholder approval for business or other legal
reasons, it may be more difficult for us to obtain shareholder approval of our initial business combination if the target business does
not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public shareholders may
receive only approximately $10.00 per share (based on the trust account balance as of December 31, 2021), on the liquidation of the trust
account and our warrants will expire worthless.
We may seek acquisition opportunities in industries or sectors
that may be outside of our management’s areas of expertise.
We will consider a business combination outside
of our management’s areas of expertise if a business combination candidate is presented to us and we determine that such candidate
offers an attractive acquisition opportunity for our company. In the event we elect to pursue an acquisition outside of the areas of our
management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the
information contained in this Annual Report regarding the areas of our management’s expertise would not be relevant to an understanding
of the business that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant
risk factors. Accordingly, any shareholders who choose to remain shareholders following our business combination could suffer a reduction
in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction in value.
We are not required to obtain an opinion from an independent
investment banking firm or from an independent accounting firm, and consequently, you may have no assurance from an independent source
that the price we are paying for the business is fair to our company from a financial point of view.
Unless we consummate 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 or 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
judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community.
Such standards used will be disclosed in our tender offer or proxy solicitation materials, as applicable, related to our initial business
combination. However, if our board of directors is unable to determine the fair value of an entity with which we seek to complete an initial
business combination based on such standards, we will be required to obtain an opinion as described above.
Because we must furnish our shareholders with target business
financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective
target businesses.
The federal proxy rules require that a proxy statement
with respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial
statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender offer
documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in
accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or U.S. GAAP, or international
financing reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the
historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight
Board (United States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire
because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy
rules and consummate our initial business combination by February 25, 2023.
Compliance obligations under the Sarbanes-Oxley Act may make
it more difficult for us to consummate our initial business combination, require substantial financial and management resources, and increase
the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act requires
that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending
December 31, 2022. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to
comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting.
Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered public
accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes
compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because
a target company with which we seek to complete our business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act
regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the
Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
Our warrants are accounted for as liabilities and the changes
in value of our warrants could have a material effect on our financial results.
The SEC Statement regarding the accounting and
reporting considerations for warrants issued by SPACs focused on certain settlement terms and provisions related to certain tender offers
following a business combination. The terms described in the SEC Statement are common in SPACs and are similar to the terms contained
in the warrant agreement governing our warrants. In response to the SEC Statement, we reevaluated the accounting treatment of our public
warrants and private placement warrants, and determined to classify the warrants as derivative liabilities measured at fair value, with
changes in fair value each period reported in earnings. As a result, included on our balance sheet as of December 31, 2021 contained elsewhere
in this Annual Report are derivative liabilities related to embedded features contained within our warrants. Accounting Standards Codification
815, Derivatives and Hedging (“ASC 815”), provides for the remeasurement of the fair value of such derivatives at each balance
sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement
of operations. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly
based on factors which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-
cash gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material.
We have identified a material weakness in our internal control
over financial reporting. This material weakness could continue to adversely affect our ability to report our results of operations and
financial condition accurately and in a timely manner.
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our management is likewise
required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes and material weaknesses
identified through such evaluation in those internal controls. A material weakness is a deficiency, or a combination of deficiencies,
in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or
interim financial statements will not be prevented or detected on a timely basis.
As described elsewhere in this Annual Report, we
identified a material weakness in our internal control over financial reporting related to the accounting for temporary equity and permanent
equity and the Company’s income (loss) per share calculation. As a result of this material weakness, our management concluded that
our internal control over financial reporting was not effective as of December 31, 2021.
To respond to this material weakness, we have devoted,
and plan to continue to devote, significant effort and resources to the remediation and improvement of our internal control over financial
reporting. While we have processes to identify and appropriately apply applicable accounting requirements, we plan to enhance these processes
to better evaluate our research and understanding of the nuances of the complex accounting standards that apply to our financial statements.
The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately
have the intended effects. For a discussion of management’s consideration of the material weakness identified related to our accounting
for a significant and unusual transaction, see Note 2 to the accompanying financial statements, as well as Part II, Item 9A: Controls
and Procedures included in this Annual Report.
Any failure to maintain such internal control could
adversely impact our ability to report our financial position and results from operations on a timely and accurate basis. If our financial
statements are not accurate, investors may not have a complete understanding of our operations. Likewise, if our financial statements
are not filed on a timely basis, we could be subject to sanctions or investigations by the stock exchange on which our ordinary shares
are listed, the SEC or other regulatory authorities. In either case, there could result a material adverse effect on our business. Ineffective
internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect
on the trading price of our ordinary shares.
We can give no assurance that the measures we have
taken and plan to take in the future will remediate the material weakness identified or that any additional material weaknesses or restatements
of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial
reporting or circumvention of these controls. In addition, even if we are successful in strengthening our controls and procedures, in
the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair
presentation of our financial statements.
We do not have a specified maximum redemption threshold. The
absence of such a redemption threshold may make it possible for us to consummate a business combination with which a substantial majority
of our shareholders do not agree.
Our amended and restated memorandum and articles
of association do not provide a specified maximum redemption threshold, except 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 (such 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.
As a result, we may be able to complete our business combination even though a substantial majority of our public shareholders do not
agree with the transaction and have redeemed their shares or, if we seek shareholder approval of our initial business combination and
do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, have entered into privately
negotiated agreements to sell their shares to our sponsor, officers, directors or their affiliates. In the event the aggregate cash consideration
we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy
cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will
not complete the business combination or redeem any shares, all Class A ordinary shares submitted for redemption will be returned to the
holders thereof, and we instead may search for an alternate business combination.
In order to complete an initial business combination, blank check
companies have, in the recent past, amended various provisions of their charters and modified governing instruments. We cannot assure
you that we will not seek to amend our amended and restated memorandum and articles of association or governing instruments in a manner
that will make it easier for us to complete our initial business combination that our shareholders may not support.
In order to effectuate a business combination,
blank check companies have, in the past, amended various provisions of their charters and modified governing instruments. For example,
blank check companies have amended the definition of business combination, increased redemption thresholds and extended the period of
time in which it had to consummate a business combination. We cannot assure you that we will not seek to amend our amended and restated
memorandum and articles of association or governing instruments or extend the time in which we have to consummate a business combination
through amending our amended and restated memorandum and articles of association require a special resolution of our shareholders as a
matter of Cayman Islands law.
We may have a limited ability to assess the management of a prospective
target business and, as a result, may complete our initial business combination with a target business whose management may not have the
skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting our
initial business combination with a prospective target business, our ability to assess the target business’s management may be limited
due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management, therefore, may prove
to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s management
not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business
may be negatively impacted. Accordingly, any shareholders who choose to remain shareholders following the business combination could suffer
a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction in value.
The officers and directors of an acquisition candidate
may resign upon completion of our initial business combination. The departure of a business combination target’s key personnel could
negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidates’
key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that
certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our
initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
The provisions of our amended and restated memorandum and articles
of association that relate to our pre-initial business combination activity (and corresponding provisions of the agreement governing the
release of funds from our trust account), including an amendment to permit us to withdraw funds from the trust account such that the per
share amount investors will receive upon any redemption or liquidation is substantially reduced or eliminated, may be amended with 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, which is a lower amendment threshold than that of some other blank check companies (and
corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders
of 65% of our ordinary shares). It may be easier for us, therefore, to amend our amended and restated memorandum and articles of association
and the trust agreement to facilitate the completion of an initial business combination that some of our shareholders may not support.
Our amended and restated memorandum and articles
of association provide that any of its provisions, including those related to pre-initial business combination activity (including
the requirement to deposit proceeds of the initial public offering and the private placement into the trust account and not release such
amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein and in our amended
and restated memorandum and articles of association or an amendment to permit us to withdraw funds from the trust account such that the
per share amount investors will receive upon any redemption or liquidation is substantially reduced or eliminated), but excluding the
provision of the articles relating to the appointment of directors, may be amended if approved by 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,
and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by
holders of 65% of our ordinary shares. Our initial holders and holders of placement shares will participate in any vote to amend our amended
and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose.
As a result, we may be able to amend the provisions of our amended and restated memorandum and articles of association which govern our
pre-business combination behavior more easily than some other blank check companies, and this may increase our ability to complete
a business combination with which you do not agree. Our shareholders may pursue remedies against us for any breach of our amended and
restated memorandum and articles of association.
We may be unable to obtain additional financing to complete our
initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon
a particular business combination.
Although we believe that the net proceeds of the
initial public offering and the sale of the placement units will be sufficient to allow us to complete our initial business combination,
because we have not yet selected any prospective target business we cannot ascertain the capital requirements for any particular transaction.
If the net proceeds of the initial public offering and the sale of the placement units prove to be insufficient, either because of the
size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to
redeem for cash a significant number of shares from shareholders who elect redemption in connection with our initial business combination
or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to
seek additional financing or to abandon the proposed business combination. We cannot assure you that such financing will be available
on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial business
combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative
target business candidate. In addition, even if we do not need additional financing to complete our business combination, we may require
such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material
adverse effect on the continued development or growth of the target business. None of our officers, directors or shareholders is required
to provide any financing to us in connection with or after our initial business combination. If we are unable to complete our initial
business combination, our public shareholders may only receive approximately $10.00 per share on the liquidation of our trust account,
and our warrants will expire worthless. In certain circumstances, our public shareholders may receive less than $10.00 per share on the
redemption of their shares.
Our sponsor will control the appointment of our board of directors
until consummation of our initial business combination and will hold a substantial interest in us. As a result, it will appoint all of
our directors and may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support.
Our sponsor owns approximately 26.6% of our issued
and outstanding ordinary shares, including placement shares. In addition, holders of the founder shares are entitled to appoint all of
our directors prior to our initial business combination. Holders of our public shares have no right to vote on the appointment of directors
during such time. These provisions of our amended and restated memorandum and articles of association may only be amended by a special
resolution passed by at least 90% of our ordinary shares voting in a general meeting. As a result, you will not have any influence over
the appointment of directors prior to our initial business combination.
Neither our sponsor nor, to our knowledge, any
of our officers or directors, have any current intention to purchase additional securities. Factors that would be considered in making
such additional purchases would include consideration of the current trading price of our Class A ordinary shares. In addition, as a result
of its substantial ownership in our company, our sponsor may exert a substantial influence on other actions requiring a shareholder vote,
potentially in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association
and approval of major corporate transactions. If our sponsor purchases any additional ordinary shares in the aftermarket or in privately
negotiated transactions, this would increase its influence over these actions. Accordingly, our sponsor will exert significant influence
over actions requiring a shareholder vote at least until the completion of our initial business combination.
Resources could be wasted in researching acquisitions that are
not consummated, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If
we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.00 per share, or
less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We anticipate that the investigation of each specific
target business and the negotiation, drafting, and execution of relevant agreements, disclosure documents, and other instruments will
require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete
a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable.
Furthermore, if we reach an agreement relating to a specific target business, we may fail to consummate our initial business combination
for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred,
which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to
complete our initial business combination, our public shareholders may receive only approximately $10.00 per share (based on the trust
account balance as of December 31, 2021) on the liquidation of our trust account and our warrants will expire worthless.
Our key personnel may negotiate employment or consulting agreements
with a target business in connection with a particular initial business combination. These agreements may provide for them to receive
compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether
a particular business combination is the most advantageous.
Our key personnel may be able to remain with the company after the
consummation of our initial business combination only if they are able to negotiate employment or consulting agreements in connection
with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and
could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would
render to us after the consummation of our initial business combination. The personal and financial interests of such individuals may
influence their motivation in identifying and selecting a target business, subject to his or her fiduciary duties under Cayman Islands
law. However, we believe the ability of such individuals to remain with us after the consummation of our initial business combination
will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. There
is no certainty, however, that any of our key personnel will remain with us after the consummation of our initial business combination.
We cannot assure you that any of our key personnel will remain in senior management or advisory positions with us. The determination as
to whether any of our key personnel will remain with us will be made at the time of our initial business combination.
We may attempt to simultaneously consummate business combinations
with multiple prospective targets, which may hinder our ability to consummate our initial business combination and give rise to increased
costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several
businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent
on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete
our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens
and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional
risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating
business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to consummate our initial business combination
with a private company about which little information is available, which may result in a business combination with a company that is
not as profitable as we suspected, if at all.
In pursuing our acquisition strategy, we may seek
to consummate our initial business combination with a privately held company. Very little public information generally exists about private
companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of
limited information, which may result in a business combination with a company that is not as profitable as we suspected, if at all.
After our initial business combination, it is possible that a
majority of our directors and officers will live outside the United States and all of our assets will be located outside the United States;
therefore investors may not be able to enforce federal securities laws or their other legal rights.
It is possible that after our initial business
combination, a majority of our directors and officers will reside outside of the United States and all of our assets will be located outside
of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United States to enforce their
legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United States courts predicated
upon civil liabilities and criminal penalties on our directors and officers under United States laws.
If we consummate our initial business combination with
a company with operations or opportunities outside of the United States, we would be subject to a variety of additional risks that may
negatively impact our operations.
If we consummate our initial business combination
with a company with operations or opportunities outside of the United States, we would be subject to any special considerations or risks
associated with companies operating in an international setting, including any of the following:
|
● |
costs and difficulties inherent in managing cross-border business operations; |
|
● |
rules and regulations regarding currency redemption; |
|
● |
complex corporate withholding taxes on individuals; |
|
● |
laws governing the manner in which future business combinations may be effected; |
|
● |
tariffs and trade barriers; |
|
● |
regulations related to customs and import/export matters; |
|
● |
tax issues, such as tax law changes and variations in tax laws as compared to the United States; |
|
● |
currency fluctuations and exchange controls; |
|
● |
challenges in collecting accounts receivable; |
|
|
|
|
● |
cultural and language differences; |
|
● |
employment regulations; |
|
● |
crime, strikes, riots, civil disturbances, terrorist attacks and wars; and |
|
● |
deterioration of political relations with the United States. |
We may not be able to adequately address these
additional risks. If we were unable to do so, our operations might suffer, which may adversely impact our results of operations and financial
condition.
Our management may not be able to maintain control of a target
business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business, new management
will possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination
so that the post-transaction company in which our public shareholders own shares will own less than 100% of the equity interests or assets
of a target business, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more
of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for us not to
be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not
meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our shareholders prior
to the business combination may collectively own a minority interest in the post business combination company, depending on valuations
ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a
substantial number of new Class A ordinary shares in exchange for all of the outstanding capital stock, shares or other equity interests
of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number
of new ordinary shares, our shareholders immediately prior to such transaction could own less than a majority of our issued and outstanding
ordinary shares subsequent to such transaction. In addition, other minority shareholders may subsequently combine their holdings resulting
in a single person or group obtaining a larger share of the company’s shares than we initially acquired. Accordingly, this may make
it more likely that our management will not be able to maintain control of the target business.
We may issue notes or other debt securities, or otherwise incur
substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively
impact the value of our shareholders’ investment in us.
We may choose to incur substantial debt to complete
our initial business combination. We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver
of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect
the per-share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative
effects, including:
|
● |
default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
|
● |
acceleration of our obligations to repay the indebtedness, even if we make all principal and interest payments when due, if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
|
● |
our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; |
|
● |
our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
|
● |
our inability to pay dividends on our ordinary shares; |
|
● |
using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our ordinary shares if declared, expenses, capital expenditures, acquisitions, and other general corporate purposes; |
|
● |
limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
|
● |
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
|
● |
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
Because we are not limited to a particular industry or any specific
target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular
target business’ operations.
We may seek to consummate a business combination
with an operating company in any industry or sector. However, we will not, under our amended and restated memorandum and articles of association,
be permitted to consummate our business combination with another blank check company or similar company with nominal operations. Because
we have not yet identified any specific target business with respect to a business combination, there is no basis to evaluate the possible
merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition
or prospects. To the extent we consummate our initial business combination, we may be affected by numerous risks inherent in the business
operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established
record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable entity.
Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you
that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence.
Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those
risks will adversely impact a target business. We also cannot assure you that an investment in our securities will ultimately prove to
be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly,
any shareholders who choose to remain shareholders following the business combination could suffer a reduction in the value of their shares.
Such shareholders are unlikely to have a remedy for such reduction in value.
We may seek acquisition opportunities with a financially unstable
business or an entity lacking an established record of sales or earnings.
To the extent we complete our initial business
combination with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by
numerous risks inherent in the operations of the business with which we combine. These risks include volatile revenues or earnings and
difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent
in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not
have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability
to control or reduce the chances that those risks will adversely impact a target business.
We may only be able to complete one business combination with
the proceeds of the initial public offering and the sale of the placement units, which will cause us to be solely dependent on a single
business which may have a limited number of products or services. This lack of diversification may negatively impact our operations and
profitability.
Of the net proceeds from the initial public offering
and the sale of the placement units, $250,000,000 is available to complete our business combination and pay related fees and expenses
(which includes up to $10,600,000 for the payment of deferred underwriting commissions).
We may complete our initial business combination
with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able
to complete a business combination with more than one target business because of various factors, including the existence of complex accounting
issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the
financial condition of several target businesses as if they had been operated on a combined basis. By consummating an initial business
combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory risks.
Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike
other entities which may have the resources to complete several business combinations in different industries or different areas of a
single industry. Accordingly, the prospects for our success may be:
|
● |
solely dependent upon the performance of a single business, property or asset, or |
|
● |
dependent upon the development or market acceptance of a single or limited number of products, processes or services. |
This lack of diversification may subject us to
numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry
in which we may operate subsequent to our business combination.
We may partner, submit a joint bid or enter into a similar transaction
with holders of founder shares or an affiliate in connection with our pursuit of, or in connection with, a business combination.
We are not prohibited from partnering, submitting
a joint bid or entering into any similar transaction with holders of founder shares or their affiliates in our pursuit of a business combination.
Although we currently have no plans to do so, we could pursue such a transaction if we determined that such affiliated entity met our
criteria for a business combination and the transaction was approved by a majority of our disinterested directors. Despite our agreement
to obtain an opinion from an independent investment banking firm or an independent accounting firm regarding the fairness to our shareholders
from a financial point of view of a business combination with any holder of founder shares or its affiliates, the terms of the business
combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest. Additionally, were
we successful in consummating such a transaction, conflicts could invariably arise from the interest of the holder of founder shares or
its affiliate in maximizing its returns, which may be at odds with the strategy of the post-business combination company or not in
the best interests of the public shareholders of the post-business combination company. Any or all of such conflicts could materially
reduce the value of your investment, whether before or after our initial business combination.
Risks Relating to our Sponsor and Management
Team
We are dependent upon our officers and directors and their departure
could adversely affect our ability to operate.
Our operations are dependent upon a relatively
small group of individuals. We believe that our success depends on the continued service of our officers and directors, at least until
we have completed our initial business combination. In addition, our officers and directors are not required to commit any specified amount
of time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities,
including identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement
with, or key-man insurance on the life of, any of our directors or officers. The unexpected loss of the services of one or more of
our directors or officers could have a detrimental effect on us.
Our ability to successfully complete our initial business combination
and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following our
initial business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination
business.
Our ability to successfully complete our business
combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot
presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions
following our business combination, it is likely that some or all of the management of the target business will remain in place. While
we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment
of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated
by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
Our officers and directors will allocate their time to other
businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of
interest could have a negative impact on our ability to complete our initial business combination.
Our officers and directors are not required to,
and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations
and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the
completion of our initial business combination. Each of our officers is engaged in several other business endeavors for which he or she
may be entitled to substantial compensation and our officers are not obligated to contribute any specific number of hours per week to
our affairs. Our independent directors also serve as officers and board members for other entities. If our officers’ and directors’
other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels,
it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business
combination. For a complete discussion of our officers’ and directors’ other business affairs, please see “Directors,
Executive Officers and Corporate Governance.”
Certain of our officers and directors are now, and all of them
may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us (and
they may also participate in the formation of, or become an officer or director of, another special purpose acquisition company) and,
accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Until we consummate our initial business combination,
we will engage in the business of identifying and combining with one or more businesses. Our sponsor and our officers and directors are
and may in the future become, affiliated with entities that are engaged in a similar business. For example, our Chairman serves as
Chairman of FinTech V, FinTech VI, FTAC Hera and FTAC Emerald, each a blank check company formed for the purpose of effecting its own
initial 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.
Our officers and directors also may become aware
of business opportunities which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary or
contractual duties. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity
should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to other entities
prior to its presentation to us, subject to his or her fiduciary duties under Cayman Islands law.
Our officers, directors, security holders and their respective
affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits
our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment
to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business
combination with a target business that is affiliated with our sponsor, our directors or officers, although we do not intend to do so.
Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types
conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
We may engage in a business combination with one or more target
businesses that have relationships with entities that may be affiliated with our sponsor, officers, directors or existing shareholders,
which may raise potential conflicts of interest.
In light of the involvement of our sponsor, officers
and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, officers and directors.
Our officers and directors also serve as officers and board members for other entities. Such entities may compete with us for business
combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete
our business combination with any entities with which they are affiliated, and there have been no preliminary discussions concerning a
business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction
with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business
combination as set forth in “Proposed Business — Effecting Our Initial Business Combination — Selection of a Target
Business and Structuring of our Initial Business Combination” and such transaction was approved by a majority of our disinterested
directors. Despite our agreement to 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, regarding the fairness
to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated
with our officers, directors or existing shareholders, potential conflicts of interest still may exist and, as a result, the terms of
the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest.
Since holders of our founder shares and placement units will
lose their entire investment in us if our business combination is not completed, a conflict of interest may arise in determining whether
a particular business combination target is appropriate for our initial business combination.
Our initial holders currently own 8,553,333 founder
shares, which will be worthless if we do not consummate our initial business combination. Our sponsor has also purchased an aggregate
of 560,000 placement units for an aggregate purchase price of $5.6 million. There will be no redemption rights or liquidating distributions
from the trust account with respect to the founder shares, placement shares or placement warrants, which will expire worthless if we do
not consummate a business combination by February 25, 2023. If we do not consummate a business combination, our sponsor will realize a
loss on the placement units it purchased. As a result, the personal and financial interests of certain of our officers and directors,
directly or as members of our sponsor, in consummating an initial business combination, along with their flexibility in identifying and
selecting a prospective acquisition candidate, may influence their motivation in identifying and selecting a target business combination
and completing an initial business combination that is not in the best interests of our shareholders. Consequently, the discretion of
our officers and directors, in identifying and selecting a suitable target business combination may result in a conflict of interest when
determining whether the terms, conditions and timing of a particular initial business combination are appropriate and in the best interest
of our public shareholders.
The personal and financial interests of our officers
and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business
combination and influencing the operation of the business following the initial business combination.
Since our sponsor, officers and directors will not be eligible
to be reimbursed for their out-of-pocket expenses if our initial business combination is not completed, a conflict of interest may arise
in determining whether a particular business combination target is appropriate for our initial business combination.
At the closing of our initial business combination,
our sponsor, officers and directors, or any entities with which they are affiliated, will be reimbursed for any out-of-pocket expenses
incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable
business combinations. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred in connection with activities
on our behalf. These financial interests of our sponsor, officers and directors may influence their motivation in identifying and selecting
a target business combination and completing an initial business combination.
Risks Relating to our Securities
The securities in which we invest the funds held in the trust
account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption
amount received by public shareholders may be less than $10.00 per share.
The proceeds held in the trust account are invested
only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions
under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S.
government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent
years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal
Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that
we are unable to complete our initial business combination or make certain amendments to our amended and restated memorandum and articles
of association, our public shareholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus
any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000
of interest). Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount
received by public shareholders may be less than $10.00 per share.
If we are deemed to be an investment company under the
Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which
may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company under
the Investment Company Act, our activities may be restricted, including:
|
● |
restrictions on the nature of our investments; and |
|
● |
restrictions on the issuance of securities; |
each of which may make it difficult for us to complete our initial
business combination.
In addition, we may have imposed upon us burdensome
requirements, including:
|
● |
registration as an investment company; |
|
● |
adoption of a specific form of corporate structure; and |
|
● |
reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations. |
We do not believe that our anticipated principal
activities will subject us to the Investment Company Act. The proceeds held in the trust account may be invested by the trustee only in
United States government treasury bills with a maturity of 185 days or less or in money market funds investing solely in United States
Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the proceeds
will be restricted to these instruments, we believe we will meet the requirements for the exemption provided in Rule 3a-1 promulgated
under the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory
burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination.
If we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.00 per share,
or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
If we seek shareholder approval of our initial business combination
and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders are deemed to
hold in excess of 15.0% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 15% of our Class
A ordinary shares.
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer
rules, our amended and restated memorandum and articles of association 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 rights with respect to more than an aggregate of 15.0% of
the shares sold in the initial public offering, which we refer to as the “Excess Shares”. However, we would not be restricting
our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our business combination. Your
inability to redeem the Excess Shares will reduce your influence over our ability to consummate a business combination and you could suffer
a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption
distributions with respect to the Excess Shares if we consummate our business combination. As a result, you would continue to hold that
number of shares exceeding 15.0% and, in order to dispose of such shares, would be required to sell those shares in open market transactions,
potentially at a loss.
NASDAQ may delist our securities from trading on its exchange,
which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
Our units, Class A ordinary shares and warrants
are currently listed on NASDAQ. We cannot assure you that our securities will continue to be listed on NASDAQ in the future or prior to
our initial business combination. In order to continue listing our securities on NASDAQ prior to our initial business combination, we
must maintain certain financial, distribution and share price levels. Generally, we must maintain an average global market capitalization
and a minimum number of holders of our securities (generally 300 public holders). Additionally, in connection with our initial business
combination, we will be required to demonstrate compliance with NASDAQ’s initial listing requirements, which are more rigorous than
NASDAQ’s continued listing requirements, in order to continue to maintain the listing of our securities on NASDAQ. For instance,
our share price would generally be required to be at least $4.00 per share and we would be required to have a minimum of 400 round lot
holders (with at least 50% of such round lot holders holding securities with a market value of at least $2,500) of our securities. We
cannot assure you that we will be able to meet those initial listing requirements at that time.
If NASDAQ delists our securities from trading on
its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted
on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
|
● |
a limited availability of market quotations for our securities; |
|
● |
reduced liquidity for our securities; |
|
● |
a determination that our Class A ordinary shares is a “penny stock” which will require brokers trading in our Class A ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
|
● |
a limited amount of news and analyst coverage; and |
|
● |
a decreased ability to issue additional securities or obtain additional financing in the future. |
The National Securities Markets Improvement Act
of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred
to as “covered securities.” Because our units, Class A ordinary shares and warrants are listed on NASDAQ, our units, Class
A ordinary shares and warrants are covered securities. Although the states are preempted from regulating the sale of our securities, the
federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent
activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having
used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain
state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder
the sale of securities of blank check companies in their states. Further, if we were no longer listed on NASDAQ, our securities would
not be covered securities and we would be subject to regulation in each state in which we offer our securities.
We may issue additional Class A ordinary or preference shares
to complete our initial business combination or under an employee incentive plan after completion of our initial business combination.
We may also issue Class A ordinary shares upon the conversion of the Class B ordinary shares at a ratio greater than one-to-one at the
time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated memorandum
and articles of association. Any such issuances would dilute the interest of our shareholders and likely present other risks.
Our amended and restated memorandum and articles
of association authorize the issuance of up to 500,000,000 Class A ordinary shares, par value $0.0001 per share, 50,000,000 Class B ordinary
shares, par value $0.0001 per share and 5,000,000 undesignated preference shares, par value $0.0001 per share. There are currently 459,371,667
and 41,446,667 authorized but unissued Class A and Class B ordinary shares available, respectively, for issuance, which amount takes into
account shares reserved for issuance upon exercise of outstanding warrants but not upon conversion of the Class B ordinary shares. Class
B ordinary shares are convertible into Class A ordinary shares, initially at a one-for-one ratio but subject to adjustment as set
forth herein and in our amended and restated memorandum and articles of association. There are no preference shares issued and outstanding.
We may issue a substantial number of additional
ordinary shares, and may issue preference shares, in order to complete our initial business combination or under an employee incentive
plan after completion of our initial business combination. We may also issue Class A ordinary shares upon conversion of the Class B ordinary
shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions
contained in our amended and restated memorandum and articles of association. However, our amended and restated memorandum and articles
of association provide, among other things, that 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.
The issuance of additional ordinary shares or preference
shares:
|
● |
may significantly dilute the equity interest of investors in the initial public offering; |
|
● |
may subordinate the rights of holders of ordinary shares if preference shares are issued with rights senior to those afforded our ordinary shares; |
|
● |
could cause a change in control if a substantial number of ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and |
|
● |
may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants. |
We are not registering the shares of Class A ordinary shares
issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may not
be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants except
on a cashless basis and potentially causing such warrants to expire worthless.
We are not registering the Class A ordinary shares
issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of
the warrant agreement, we have agreed that as soon as practicable, but in no event later than 20 business days after the closing of our
initial business combination, we will use our best efforts to file, and within 60 business days following our initial business combination
to have declared effective, a registration statement covering such shares and maintain a current prospectus relating to the Class A ordinary
shares issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant agreement.
We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in
the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference
therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered
under the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will
be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their
warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the
exercising holder, or an exemption is available. Notwithstanding the foregoing, if a registration statement covering the Class A ordinary
shares issuable upon exercise of the warrants is not effective within a specified period following the consummation of our initial business
combination, warrant holders may, until such time as there is an effective registration statement and during any period when we shall
have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided
by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available,
holders will not be able to exercise their warrants on a cashless basis. We will use our best efforts to register or qualify the shares
under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any warrant,
or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares
underlying the warrants under applicable state securities laws and no exemption is available. If the issuance of the shares upon exercise
of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be
entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants
as part of a purchase of units will have paid the full unit purchase price solely for the Class A ordinary shares included in the units.
If and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of shares upon exercise of
the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration
or qualification. We will use our best efforts to register or qualify such shares under the blue sky laws of the state of residence in
those states in which the warrants were offered by us.
The grant of registration rights to our initial shareholders
and holders of placement units may make it more difficult to complete our initial business combination, and the future exercise of such
rights may adversely affect the market price of our Class A ordinary shares.
Pursuant to an agreement entered into concurrently
with the issuance and sale of the securities in the initial public offering, our initial shareholders and their permitted transferees
can demand that we register their founder shares, after those shares convert to our Class A ordinary shares at the time of our initial
business combination, and placement shares. In addition, holders of our placement units (and underlying securities) and their permitted
transferees can demand that we register the placement shares as well as the placement warrants and the Class A ordinary shares issuable
upon exercise of the placement warrants, and holders of shares and warrants underlying units that may be issued upon conversion of working
capital loans may demand that we register such Class A ordinary shares, warrants or the Class A ordinary shares issuable upon exercise
of such warrants. We will bear the cost of registering these securities. The registration and availability of such a significant number
of securities for trading in the public market may have an adverse effect on the market price of our Class A ordinary shares. In addition,
the existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because
the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration
to offset the negative impact on the market price of our Class A ordinary shares that is expected when the ordinary shares owned by our
initial shareholders, holders of our placement warrants or holders of our working capital loans or their respective permitted transferees
are registered.
We may amend the terms of the warrants in a manner that
may be adverse to holders of public warrants with the approval by the holders of at least 65% of the then outstanding public warrants.
Our warrants were issued in registered form under
a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides
that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision,
but requires the approval by the holders of at least 65% of the then outstanding public warrants to make any change that adversely affects
the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse
to a holder if holders of at least 65% of the then outstanding public warrants approve of such amendment. Although our ability to amend
the terms of the public warrants with the consent of at least 65% of the then outstanding public warrants is unlimited, examples of such
amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease
the number of Class A ordinary shares purchasable upon exercise of a warrant.
We may redeem your unexpired warrants prior to their exercise
at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem outstanding warrants
at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported
sales price of our Class A ordinary shares equal or exceed $18.00 per share (as adjusted for share sub divisions, share capitalizations,
rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period
ending on the third trading day prior to the date we send the notice of redemption to the warrant holders. If and when the warrants become
redeemable by us, we may not exercise our redemption right if the issuance of shares upon exercise of the warrants is not exempt from
registration or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification. We will
use our best efforts to register or qualify such shares under the blue sky laws of the state of residence in those states in which the
warrants were offered by us in the initial public offering. Redemption of the outstanding warrants could force you (i) to exercise your
warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at
the then-current market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption price
which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your
warrants. None of the placement warrants will be redeemable by us so long as they are held by our sponsor, Cantor Fitzgerald or their
permitted transferees.
In addition, we may redeem your warrants at any
time after they become exercisable and prior to their expiration at a price of $0.10 per warrant upon a minimum of 30 days’ prior
written notice of redemption, provided that holders will be able to exercise their warrants prior to redemption for a number of Class
A ordinary shares determined based on the redemption date and the fair market value of our Class A ordinary shares. The value received
upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a
later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including
because the number of ordinary shares received is capped at 0.361 Class A ordinary shares per warrant (subject to adjustment) irrespective
of the remaining life of the warrants. None of the placement warrants will be redeemable by us so long as they are held by our sponsor,
Cantor Fitzgerald or their permitted transferees, subject to limited exceptions.
Our management’s ability to require holders of our warrants
to exercise such warrants on a cashless basis will cause holders to receive fewer Class A ordinary shares upon their exercise of the warrants
than they would have received had they been able to exercise their warrants for cash.
If we call our public warrants for redemption after
the redemption criteria described elsewhere in this Annual Report have been satisfied, our management will have the option to require
any holder that wishes to exercise his warrant (including any warrants held by our sponsor, officers or directors, other purchasers of
our founders’ units, or their permitted transferees) to do so on a “cashless basis.” If our management chooses to require
holders to exercise their warrants on a cashless basis, the number of Class A ordinary shares received by a holder upon exercise will
be fewer than it would have been had such holder exercised his warrant for cash. This will have the effect of reducing the potential “upside”
of the holder’s investment in our company.
Our warrants and founder shares may have an adverse effect on
the market price of our Class A ordinary shares and make it more difficult to consummate our business combination.
We issued warrants to purchase 6,250,000 of our
Class A ordinary shares as part of the units sold in the initial public offering and, simultaneously with the closing of the initial public
offering, we issued in a private placement an aggregate of 660,000 units. The placement units include underlying warrants to purchase
an aggregate of 165,000 Class A ordinary shares at $11.50 per share, subject to adjustment as provided herein. In addition, if the sponsor,
the management team or their affiliates make any working capital loans, up to $1,500,000 of such loans may be convertible into units at
a price of $10.00 per unit at the option of the lender at the time of the business combination. The units would be identical to the placement
units sold in the private placement.
To the extent we issue ordinary shares to consummate
our business combination, the potential for the issuance of a substantial number of additional Class A ordinary shares upon exercise of
these warrants could make us a less attractive acquisition vehicle to a target business. Such warrants, when exercised, will increase
the number of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares issued to complete the
business combination. Therefore, our warrants may make it more difficult to consummate our business combination or increase the cost of
acquiring the target business.
Because each unit contains one-fourth of one warrant and only
a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
Each unit contains one-fourth of one warrant. Because,
pursuant to the warrant agreement, the warrants may only be exercised for a whole number of Class A ordinary shares, only a whole warrant
may be exercised at any given time. This is different from other blank check companies similar to ours whose units include one ordinary
share and one warrant to purchase one share. We established the components of the units in this way in order to reduce the dilutive effect
of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for one-fourth of the
number of shares compared to units that each contain a warrant to purchase one share, thus making us, we believe, a more attractive business
combination partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if they included
a warrant to purchase one whole share.
A provision of our warrant agreement may make it more difficult
for use to consummate an initial business combination.
Unlike most blank check companies, if (x) we issue
additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our
initial business combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or
effective issue price to be determined in good faith by us and in the case of any such issuance to our sponsors or their affiliates, without
taking into account any founder shares held by our initial shareholders or such affiliates, as applicable, prior to such issuance) (the
“Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 50% of the total equity proceeds,
and interest thereon, available for the funding of our initial business combination on the date of the completion of our initial business
combination (net of redemptions), and (z) the volume-weighted average trading price of our Class A ordinary shares during the 20
trading day period starting on the trading day prior to the day on which we complete our initial business combination (such price, the
“Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be
equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $10.00 and $18.00 per share redemption trigger prices
will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued Price, respectively.
This may make it more difficult for us to consummate an initial business combination with a target business.
Provisions in our amended and restated memorandum and articles
of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class
A ordinary shares and could entrench management.
Our amended and restated memorandum and articles
of association contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best
interests. These provisions include two-year director terms and the ability of the board of directors to designate the terms of and issue
new series of preference shares, which may make more difficult the removal of management and may discourage transactions that otherwise
could involve payment of a premium over prevailing market prices for our securities.
General Risk Factors
We are a company with no operating history and no revenues and
you have no basis on which to evaluate our ability to achieve our business objective.
We are a company established under the laws of
the Cayman Islands with no operating results, and we will not commence operations until we consummate our initial business combination.
Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing
our initial business combination with one or more target businesses. We may be unable to complete a business combination. If we fail to
complete a business combination, we will never generate any operating revenues.
Changes in laws or regulations, or a failure to comply with any
laws and regulations, may adversely affect our business, investments and results of operations.
We are subject to laws and regulations enacted
by national, regional and local governments. In particular, we are required to comply with certain SEC reporting and other legal requirements.
Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations
and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our
business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted
and applied, could have a material adverse effect on our business and results of operations.
Past performance by our management team and their affiliates
may not be indicative of future performance of an investment in us.
Information regarding performance by, or businesses
associated with, our management team and their affiliates is presented for informational purposes only. Past performance by our management,
including their affiliates’ past performance, is not a guarantee either (i) of success with respect to any business combination
we may consummate or (ii) that we will be able to locate a suitable candidate for our initial business combination. You should not rely
on the historical record of our management team or their affiliates as indicative of our future performance. Additionally, in the course
of their respective careers, members of our management team have been involved in businesses and deals that were unsuccessful.
As the number of special purpose acquisition
companies evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive targets.
This could increase the cost of our initial business combination and could even result in our inability to find a target or to consummate
an initial business combination.
In recent years, the number
of special purpose acquisition companies that have been formed has increased substantially. Many potential targets for special purpose
acquisition companies have already entered into an initial business combination, and there are still many special purpose acquisition
companies seeking targets for their initial business combination, as well as many such companies currently in registration. As a result,
at times, fewer attractive targets may be available, and it may require more time, more effort and more resources to identify a suitable
target and to consummate an initial business combination.
In addition, because there
are more special purpose acquisition companies seeking to enter into an initial business combination with available targets, the competition
for available targets with attractive fundamentals or business models may increase, which could cause target companies to demand improved
financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical
tensions, or increases in the cost of additional capital needed to close business combinations or operate targets post-business combination.
This could increase the cost of, delay or otherwise complicate or frustrate our ability to find and consummate an initial business combination,
and may result in our inability to consummate an initial business combination on terms favorable to our investors altogether.
We are an emerging growth company and a smaller reporting company
within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging
growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult
to compare our performance with other public companies.
We are an “emerging growth company”
within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being
required to comply with the auditor internal controls attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure
obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding
a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
As a result, our shareholders may not have access to certain information they may deem important. We could be an emerging growth company
for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A
ordinary shares held by non-affiliates equals or exceeds $700 million as of any June 30 before that time, in which case we would no longer
be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive
because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions,
the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities
and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but
any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a
standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company,
can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our
financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has
opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards
used.
Additionally, we are a
“smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage
of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We
will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held
by non-affiliates equals or exceeds $250 million as of the prior June 30th, or (2) our annual revenues equaled or
exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates equals
or exceeds $700 million as of the prior June 30th. To the extent we take advantage of such reduced disclosure obligations,
it may also make comparison of our financial statements with other public companies difficult or impossible.
Our management concluded that there is substantial doubt
about our ability to continue as a “going concern.”
As of December 31, 2021, we had $271,045 in our
operating bank accounts and $250,021,167 in securities held in the Trust Account to be used for a Business Combination or to repurchase
or redeem our common stock in connection therewith. As of December 31, 2021, approximately $21,167 of the amount on deposit in the Trust
Account represented interest income, which is available to pay our tax obligations. If we are unable to raise additional capital, wet
may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, suspending
the pursuit of a Business Combination. We cannot provide any assurance that new financing will be available to it on commercially acceptable
terms, if at all. Further, our plans to raise capital and to consummate our initial business combination may not be successful. These
factors, among others, raise substantial doubt about our ability to continue as a going concern through our liquidation date. The financial
statements contained elsewhere in this Annual Report do not include any adjustments that might result from our inability to consummate
a Business Combination or our inability to continue as a going concern.
We may be a passive foreign investment company, or “PFIC,”
which could result in adverse U.S. federal income tax consequences to U.S. investors.
If we are a PFIC for any taxable year (or portion
thereof) that is included in the holding period of a U.S. holder of our Class A ordinary shares or warrants, the U.S. holder may be subject
to adverse U.S. federal income tax consequences and may be subject to additional reporting requirements. Our PFIC status for our current
and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception. Depending on the particular circumstances
the application of the start-up exception may be subject to uncertainty, and there cannot be any assurance that we will qualify for
the start-up exception. Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable year
or any subsequent taxable year. Our actual PFIC status for any taxable year, however, will not be determinable until after the end of
such taxable year. Moreover, if we determine we are a PFIC for any taxable year, we will endeavor to provide to a U.S. holder such information
as the Internal Revenue Service (“IRS”) may require, including a PFIC annual information statement, in order to enable the
U.S. holder to make and maintain a “qualified electing fund” election, but there can be no assurance that we will timely
provide such required information, and such election would be unavailable with respect to our warrants in all cases. We urge U.S. holders
to consult their own tax advisors regarding the possible application of the PFIC rules to holders of our Class A ordinary shares and warrants.
We may reincorporate in another jurisdiction in connection with
our initial business combination and such reincorporation may result in taxes imposed on shareholders.
We may, in connection with our initial business
combination and subject to requisite shareholder approval under the Companies Law, reincorporate in the jurisdiction in which the target
company or business is located. The transaction may require a shareholder to recognize taxable income in the jurisdiction in which the
shareholder is a tax resident or in which its members are resident if it is a tax transparent entity. We do not intend to make any cash
distributions to shareholders to pay such taxes. Shareholders may be subject to withholding taxes or other taxes with respect to their
ownership of us after the reincorporation.
Certain agreements related to the initial public offering may
be amended without shareholder approval.
Certain agreements, including the underwriting
agreement relating to the initial public offering, the investment management trust agreement between us and Continental Stock Transfer
& Trust Company, the letter agreement among us and our sponsor, officers and directors, the registration rights agreement among us
and our initial shareholders and holders of placement units and the administrative services agreement between us and our sponsor, may
be amended without shareholder approval. These agreements contain various provisions that our public shareholders might deem to be material.
For example, the underwriting agreement contains a covenant that the target company that we acquire must have a fair market value equal
to at least 80% of the balance in the trust account at the time of signing the definitive agreement for the transaction with such target
business (excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account) so long as we obtain
and maintain a listing for our securities on NASDAQ. While we do not expect our board to approve any amendment to any of these agreements
prior to our initial business combination, it may be possible that our board, in exercising its business judgment and subject to its fiduciary
duties, chooses to approve one or more amendments to any such agreement in connection with the consummation of our initial business combination.
Any such amendment may have an adverse effect on the value of an investment in our securities.
Because we are incorporated under the laws of the Cayman Islands,
you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. Federal courts may be
limited.
We are an exempted company incorporated under the
laws of the Cayman Islands. As a result, it may be difficult for shareholders to effect service of process within the United States upon
our directors or officers, or enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs are governed by our amended
and restated memorandum and articles of association, the Companies Law (as the same may be supplemented or amended from time to time)
and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders
and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of
the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman
Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court
in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are
different from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the
Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have
more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to
initiate a shareholders derivative action in a Federal court of the United States.
We have been advised by Maples and Calder (Cayman)
LLP, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments
of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any
state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability
provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are
penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the
United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction
without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an
obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced
in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine
or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained
in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards
of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings
if concurrent proceedings are being brought elsewhere.
As a result of all of the above, public shareholders
may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or
controlling shareholders than they would as public shareholders of a United States company.
If our management following our initial business combination
is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws, which could
lead to various regulatory issues.
Following our initial business combination, any
or all of our management could resign from their positions as officers of the Company, and the management of the target business at the
time of the business combination will remain in place. Management of the target business may not be familiar with United States securities
laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar
with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect
our operations.
After our initial business combination, substantially all of
our assets may be located in a foreign country and substantially all of our revenue will be derived from our operations in such country.
Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and legal policies,
developments and conditions in the country in which we operate.
The economic, political and social conditions,
as well as government policies, of the country in which our operations are located could affect our business. Economic growth could be
uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future. If in the future
such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in
certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find
an attractive target business with which to consummate our initial business combination and if we effect our initial business combination,
the ability of that target business to become profitable.
Exchange rate fluctuations and currency policies may cause a
target business’ ability to succeed in the international markets to be diminished.
In the event we acquire a non-U.S. target, all
revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and distributions, if
any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions fluctuate
and are affected by, among other things, changes in political and economic conditions. Any change in the relative value of such currency
against our reporting currency may affect the attractiveness of any target business or, following consummation of our initial business
combination, our financial condition and results of operations. Additionally, if a currency appreciates in value against the dollar prior
to the consummation of our initial business combination, the cost of a target business as measured in dollars will increase, which may
make it less likely that we are able to consummate such transaction.
We may face risks related to financial technology businesses.
Business combinations with financial technology
businesses may involve special considerations and risks. If we complete our initial business combination with a financial technology business,
we will be subject to the following risks, any of which could be detrimental to us and the business we acquire:
|
● |
If the company or business we acquire provides products or services which relate to the facilitation of financial transactions, such as funds or securities settlement system, and such product or service fails or is compromised, we may be subject to claims from both the firms to whom we provide our products and services and the clients they serve; |
|
● |
If we are unable to keep pace with evolving technology and changes in the financial services industry, our revenues and future prospects may decline; |
|
● |
Our ability to provide financial technology products and services to customers may be reduced or eliminated by regulatory changes; |
|
● |
Any business or company we acquire could be vulnerable to cyberattack or theft of individual identities or personal data; |
|
● |
Difficulties with any products or services we provide could damage our reputation and business; |
|
● |
A failure to comply with privacy regulations could adversely affect relations with customers and have a negative impact on our business; and |
|
● |
We may not be able to protect our intellectual property and we may be subject to infringement claims. |
Any of the foregoing could
have an adverse impact on our operations following a business combination. However, our efforts in identifying prospective target businesses
will not be limited to financial technology businesses. Accordingly, if we acquire a target business in another industry, these risks
will likely not affect us and we will be subject to other risks attendant with the specific industry in which we operate or target business
which we acquire, none of which can be presently ascertained.