ITEM
1. BUSINESS
General
We
are a blank check company formed as a Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization, or similar business combination with one or more businesses, which we refer to throughout this Annual
Report as our initial business combination. While we may pursue an acquisition opportunity in any business, industry, sector, or geography,
we have initially focused our search on identifying a prospective target business in the healthcare or healthcare-related infrastructure
industries in the United States and other developed countries.
In
January 2021, our sponsor purchased 7,187,500 founder shares for a capital contribution of $25,000. In February 2021, our sponsor transferred
35,000 founder shares to each of our directors. Prior to the initial investment in the company of $25,000 by our sponsor, we had no assets,
tangible or intangible. The per-share purchase price of the founder shares was determined by dividing the amount of cash contributed
to us by the number of founder shares issued. Up to 937,500 founder shares were subject to forfeiture by our initial stockholders depending
on the extent to which the underwriters’ over-allotment option was exercised so that the number of founder shares would remain
equal to 20% of our common stock after our initial public offering. The over-allotment option was exercised in full on May 6, 2021; thus,
these shares are no longer subject to forfeiture.
The
registration statement on Form S-1 (File No. 333-253465) for our initial public offering was declared effective by the Securities
and Exchange Commission (the “SEC”) on March 16, 2021. On March 19, 2021, we consummated our initial public offering of 25,000,000
units, generating gross proceeds of $250,000,000. Each unit consists of one share of Class A common stock and one-third of one redeemable
warrant, with each whole warrant entitling the holder thereof to purchase one share of Class A common stock at an exercise price of $11.50
per share. Simultaneously with the consummation of our initial public offering, we consummated the private placement of 4,500,000 private
placement warrants to our sponsor at a price of $1.50 per private placement warrant, generating total gross proceeds of $6,750,000.
On
May 6, 2021, the underwriters exercised their over-allotment option in full, resulting in our issuance of an additional 3,750,000 units
at a public offering price of $10.00 per unit. In addition, we consummated the sale of an additional 500,000 private placement warrants
at $1.50 per private placement warrant, generating gross proceeds of $750,000. After giving effect to the exercise and close of the option,
an aggregate of 28,750,000 units have been issued in the initial public offering, with aggregate gross proceeds of $287,500,000.
A
total of $287,500,000 (or $10.00 per unit sold in our initial public offering) of the net proceeds from our initial public offering and
the private placement was placed in a trust account established for the benefit of our public shareholders (the “trust account”),
with Continental Stock Transfer & Trust Company acting as trustee, and has been invested only in U.S. “government securities”
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”),
having a maturity of 185 days or less, or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the
Investment Company Act which invest only in direct U.S. government treasury obligations, until the earlier of: (i) the completion
of our initial business combination within the required time period and (ii) the distribution of the trust account, as described
below, except that interest earned on the trust account can be released to pay our taxes payable and for dissolution expenses up to $100,000,
as applicable.
Our
units began trading on March 18, 2021 on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “GAMCU.” Commencing
on May 7, 2021, the shares of Class A common stock and warrants comprising the units began separate trading on Nasdaq under the symbols
“GAMC” and “GAMCW,” respectively. Those units not separated continue to trade on Nasdaq under the symbol “GAMCU.”
Members
of our team have deployed billions of dollars of equity capital buying and building industry-leading businesses and have developed
a vast network of relationships with entrepreneurs, corporate executives, consultants, bankers, and other advisors who seek out the partnership
of our management team when embarking on significant capital investment or potential change-of-control transactions. Our team has
built proprietary networks and relationships that allow us to source transactions that are not broadly marketed. We use the same criteria
that have guided our successful collective investment histories in underwriting, analyzing, and structuring a prospective transaction.
We consider various types of companies that are appropriate for this particular corporate structure when assessing potential opportunities.
Our
Management Team
We
are led by an experienced team of managers, operators, and investors bound by shared insight. Combining our strong idiosyncratic views
developed over decades of experience, we believe we are uniquely qualified to identify and successfully merge with a valuable target
company.
For
more information about our management team, See Item 10. Directors, Executive Officers and Corporate Governance of this Annual Report.
Competitive
Advantage
The
network, sourcing, valuation, diligence, and execution capabilities of our management team, sponsor and advisors should provide us what
we believe to be a significant and attractive pipeline of opportunities from which to evaluate and select a target business that will
benefit from our collective expertise. We capitalize on the following competitive advantages in our pursuit of target assets:
| ● | Extensive
Private and Public Investing Experience. Our team is comprised of individuals who have extensive private
equity, crossover, and public equities experience. We leverage the structuring and asset management expertise as well as the public markets
insights of our team in identifying and executing potential business combinations. Mr. Babich has 20 years of investing and
operating experience in the healthcare sector. In late 2020, Mr. Babich merged two Ambulatory Surgery Center software businesses,
which created the leading modern software suite for the fast-growing ASC market. Mr. Doft, as CEO of Highline Capital, has
been investing in healthcare companies in both public and private markets for more than 25 years, and has participated in several
earlier stage private financings, including the creation of special purpose vehicles to facilitate profitable private investments in
both Novocure and Passage Bio. Mr. Rechtschaffen, both personally and as CEO of AREX Capital and at his prior firms, has been investing
in healthcare companies in both public and private markets for nearly two decades, including early-stage investments in Ambulnz,
a leading provider of mobile medical services and transportation, and Veridikal, a leading provider of software-driven analytics
and audit services to healthcare companies. Mr. Hirt has led over $3 billion of private equity investments throughout his career,
including healthcare-industry investments in Epax Neutraceuticals and Trygg Pharma. |
| ● | Execution
and Structuring Capability for Complex Transactions. We believe we have the organizational resources,
significant transaction experience, and reputation required to effectively and efficiently source opportunities, analyze companies, negotiate
and optimize structures, and ultimately complete an acquisition of a target company. These types of transactions may be complex and require
creative structuring, industry knowledge and expertise, rigorous due diligence, and extensive negotiation and documentation. We believe
that our expertise and experience in executing transactions with varying degrees of complexity may enhance our ability to identify attractive
acquisition opportunities. |
| ● | Proprietary
Sourcing and Deep Network of Industry Relationships Across Healthcare. We believe that our reputation,
deep experience and proactive approach to sourcing transactions, and extensive industry relationships will continue to provide numerous
investment opportunities. Mr. Babich’s operational and managerial expertise in the healthcare space make him a compelling
partner for healthcare companies seeking capital solutions. In addition, members of our board have been longtime investors in both public
and private healthcare firms. Moreover, given the combination of Mr. Babich’s and our board members’ long track records
and reputations, as well as their broad and diverse networks, there will be significant potential for them to source new opportunities
that may not be broadly marketed. |
| ● | Creating
Long-Term Shareholder Value. Marrying a well-positioned business with the capital it needs is
but one way we intend to create value. Our collective track record helping companies grow, expand margins, and tackle opportunity, as
well as our significant collective understanding of the factors that allow public companies to be successful and well-received by
market participants, leads us to believe that more sustained value creation beyond the initial transaction is possible. |
| ● | Compelling
Thesis on Healthcare Infrastructure. Our team has extensive interactions with the broader economy. We
have developed a specific worldview on how healthcare will evolve as a result of societal and economic changes. In addition, complexity
associated with healthcare payment mechanics are well understood by the management team and provide for a deeper understanding of the
opportunity set available to the company. We believe this viewpoint and industry perspective enables us to successfully source and structure
potential deals as well as ultimately drive growth and create value through continued innovation, partnerships and relationships, among
other growth factors. |
Industry
Opportunity
While
we may acquire a business in any industry or sector, our focus is on the healthcare infrastructure sector in the United States and
other developed countries. We believe that the “picks and shovels” of healthcare is an extremely attractive opportunity given
the funding in 2020 and beyond from both the private and public sectors for healthcare and biotech companies.
2020
was indeed the year of COVID-19. But it was also the year of funding for the healthcare industry. The combination of venture, growth,
and public financings reached historically high levels. Driven by low interest rates, change-driven innovation, and the democratization
of becoming public, up and coming healthcare companies filled their coffers with cash, ensuring many years of fully-funded research &
development and technical advances.
Concurrently,
science emerged as the real hero of 2020. The success of messenger RNA enabled vaccines to go from concept to lab to clinic to approval
in less than a year. This astonishing accomplishment led to a renewed appreciation for life sciences. It seemed as if primary issuance
of new life sciences shares occurred daily. As of the end of 2020, the life sciences industry was flush with funds like never before.
Digital
healthcare delivery experienced similar dynamics in 2020. There was an enormous amount of new capital raised especially for those providing
services to consumers. However, the ability to bring these offerings to consumers in scale, utilize the derived data, and develop relationships
with established payers such as insurance companies and Medicare has not occurred to a material extent. The infrastructure is not in
place yet for consumers to fully move away from their established providers and established habits.
One
key for these cutting-edge biotech or digital services companies to succeed is to stick to their core competencies which means outsourcing
non mission-critical functions to trusted outsourcing partners. From conducting clinical trials to manufacturing to revenue life
cycle management to electronic health records, life sciences and healthcare firms rely on an existing healthcare ecosystem or infrastructure
to complete their missions. In services, more often than not, innovation is digital, requiring a new infrastructure that has not existed
before in scale but is rapidly developing now. Electronic medical records, genomic sequencing, and telehealth are examples of the enormous
impact new digitally capable business models have on today’s health care system.
The
next few years will witness the dramatic leap forward in life sciences and digital health care models. Driven by both 2020’s funding
and the COVID-19 experience, these firms are poised to succeed. Moreover, the model of delivery to the patient must change. The
United States spends ~20% of its GDP on healthcare, which is significantly more than any other nation. In addition, more of this
payment burden is being placing on consumers through high deductibles and out-of-network services. The only way to maintain the
high quality of healthcare that consumers have come to expect as a birthright while flattening the curve of rising healthcare costs is
through bringing the same style of innovation that has occurred in every other sector in the economy to the infrastructure of the healthcare
world.
We
hope to identify a target, or several, that falls in the sweet spot of these important trends.
Key
Industry Considerations
| ● | Large
Target Market. The healthcare industry represents an enormous target market. Total U.S. national health
expenditure exceeded $3.5 trillion in 2018, and the Center for Medicare and Medicaid Services has estimated that total healthcare spending
will approach 20-25% of total U.S. Gross Domestic Product over the coming years. As of August 2019, the number of private companies
in the healthcare industry is significant, with over 55,000 operating companies focused on various sub-sectors of the healthcare
services continuum in the U.S. alone. |
| ● | Favorable
Macro Trends. Total global healthcare expenditure has continued to grow recently at a pace substantially
above the rate of inflation, and this growth is projected to continue, spurred by an aging population, increased prevalence of chronic
disease, and improved access to healthcare. While the magnitude of healthcare spending continues to grow, this expense has put significant
pressure on public, private, and individual payors. This dynamic has offered opportunities to companies that can control cost and/or
improve the overall quality of healthcare. |
| ● | Increased
Public Sector Spending. Events like the COVID-19 pandemic have contributed to increasing dislocation and rapid evolution
across the healthcare landscape. This has exposed the lack of public healthcare infrastructure in addressing the first national pandemic
in 100 years. Similar to the response of the federal government post 9-11 we believe the next decade will be characterized
by significantly more government spending and mandate for healthcare, which has bi-partisan support. This will be especially pronounced
through infrastructure initiatives and public health data modernization. |
| ● | Expansive
Universe of Targets. We focus our investment effort broadly across the healthcare industry, with an emphasis on the full
continuum of healthcare services, healthcare information technology, supply chain or business support services, medical technology, medical
devices, and diagnostics. We believe that our investment and operating expertise in healthcare across multiple industry verticals give
us a large, addressable universe of potential targets. The diversity of the target universe and the number of sub-sectors maximize
the likelihood that the management team will be able to identify and execute an attractive transaction. |
Acquisition
Strategy
Our
acquisition strategy is to identify and partner with a target in the healthcare infrastructure industry and to help transform that enterprise
into a successful public company. We focus on targets that may provide digital and/or physical services to key healthcare industry participants,
including services providers, device and pharmaceutical manufacturers, medical technology companies, and supply chain companies. Furthermore,
we focus on companies that are generating cost savings and improving efficiency and quality of care for the healthcare industry.
Our
selection process leverages our deep experiences as public and private equity investors and our networks of relationships with industry
leaders, private equity and venture capital firms, strategic partners, and other service providers to give us multiple avenues to develop
acquisition opportunities. Our objective is to source the highest quality targets while avoiding competitive auction processes. Targets
may include late-stage growth companies that need sizable capital injections to aggressively capture a nascent market opportunity;
family-owned businesses seeking to facilitate generational transfer without complete monetization; business units of enterprises
seeking both independence and dedicated funding; negative cashflow growth companies; and sponsor-owned companies pursuing recapitalization.
Acquisition
Criteria
Consistent
with our acquisition strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating
prospective target businesses. We use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter
our initial business combination with a target business that does not meet these criteria and guidelines.
| ● | Attractive
Business Model. Among the criteria that we emphasize in evaluating our acquisition targets are significant
existing and/or potential recurring revenue streams, strong steady-state margins, opportunities for operational improvement, and
attractive free cash flow characteristics, including low capital intensity and strong free cash flow conversion. |
| ● | Strong
Competitive Position. We focus on acquisition targets that have existing demonstrable and sustainable
competitive advantages, with a clear path to sustain and/or develop a leading market position in their respective industries. Furthermore,
we focus on industries or niches that have high barriers to entry and that we believe exhibit rational competitive behaviors over the
short, medium, and long term. |
| ● | Innovative
Product and/or Service Offerings. We seek to acquire one or more businesses that have innovative product
and/or service offerings that serve to lower costs and improve efficiency and quality for customers. This may involve identifying targets
with technology-driven business models that seek to improve or replace incumbent and/or physically-driven solutions. |
| ● | Compelling
Growth Outlook. We seek to acquire one or more businesses that have the potential for significant growth.
The targets that we seek to focus on have large total addressable markets; clear secular growth drivers over the short, medium, and long
term; avenues for growth from exploiting existing opportunities and expanding into adjacent markets and new geographies; and significant
potential to pursue synergistic acquisitions and drive outsized inorganic top-line growth. |
| ● | Experienced
Management Team. We focus on target businesses that have complete, experienced management teams with a
vision for creating a substantially larger enterprise. Furthermore, we focus on acquisition opportunities in which the management team
of the target have substantial equity ownership in the newly public company and is aligned with us and incentivized to create long-term shareholder
value. |
| ● | Benefits
from Long-Term Sponsorship. We intend to acquire a company that we believe will benefit from our
differentiated industry network, brand, and value creation capabilities. We seek to partner with a potential target’s management
team and anticipate that the financial and operational experience of our management team and board will enhance a target company’s
ability to grow and succeed as a public company. |
| ● | Benefits
from Being a Public Company. We intend to acquire one or more businesses that will benefit from being
a public company as a result of a lower cost of capital, an enhanced public profile, and the ability to use publicly-traded stock-based compensation
to attract and retain employees, among other things. |
These
criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be
based, to the extent relevant, on these general guidelines as well as other considerations, factors, and criteria that our management
team may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not
meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder
communications related to our initial business combination, which would be in the form of proxy solicitation materials or tender offer
documents that we would file with the SEC.
Our
Acquisition Process
In
evaluating a prospective target business, we 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.
We
are not prohibited from pursuing an initial business combination with a business that is affiliated with our sponsor, officers or directors.
In the event we seek to complete our initial business combination with a business that is affiliated with our sponsor, officers or directors,
we, or a committee of independent and disinterested directors, will obtain an opinion from an independent investment banking firm that
is a member of the Financial Industry Regulatory Authority, or FINRA, or from an independent accounting firm, that such initial business
combination is fair to our company from a financial point of view.
Members
of our management team directly or indirectly own our securities, and accordingly, they may have a conflict of interest in determining
whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each
of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention
or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our
initial business combination.
Our
officers and directors are from time to time made aware of potential business opportunities, one or more of which we may desire to pursue,
for a business combination, but we have not (nor has anyone on our behalf) contacted any prospective target business or had any substantive
discussions, formal or otherwise, with respect to a business combination transaction with us.
Each
of our officers and directors presently has, and any of them in the future may have additional fiduciary, contractual or other obligations
or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination
opportunity to such entities. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which
is suitable for one or more entities to which he or she has fiduciary, contractual or other obligations or duties, he or she will honor
these obligations and duties to present such business combination opportunity to such entities first, and only present it to us if such
entities reject the opportunity and he or she determines to present the opportunity to us.
We
do not believe, however, that the fiduciary, contractual or other obligations or duties of our officers or directors will materially
affect our ability to complete our initial business combination. Our amended and restated certificate of incorporation provides that
we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered
to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually
permitted to undertake and would otherwise be reasonable for us to pursue.
In
addition, our sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours
or may pursue other business or investment, even prior to us entering into a definitive agreement for our initial business combination.
Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination.
However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.
We
will either (1) seek stockholder approval of our initial business combination at a meeting called for such purpose at which stockholders
may elect to redeem their public shares, regardless of whether they vote for or against the proposed business combination or don’t
vote at all, into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), or (2) provide
our stockholders with the opportunity to sell their public shares to us by means of a tender offer (and thereby avoid the need for a
stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes
payable), in each case subject to the limitations described herein. The decision as to whether we will seek stockholder approval of our
proposed business combination or allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion,
and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise
require us to seek stockholder approval. If we decide to allow stockholders to sell their shares to us in a tender offer, we will file
tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business
combination as is required under the SEC’s proxy rules. We will consummate our initial business combination only if we have net
tangible assets of at least $5,000,001 either immediately prior to or upon consummation of such business combination and, if we seek
stockholder approval, a majority of the outstanding shares of common stock voted are voted in favor of the business combination. We have
no specified maximum percentage threshold for conversions in our amended and restated certificate of incorporation and even those public
stockholders who vote in favor of our initial business combination have the right to convert their public shares. As a result, this may
make it easier for us to consummate our initial business combination.
Initial
Business Combination
Nasdaq
rules require that an initial business combination must be with one or more operating businesses or assets with a fair market value equal
to at least 80% of the net assets held in the trust account (net of amounts disbursed to management for working capital purposes, if
permitted, and excluding the amount of any deferred underwriting discount). We refer to this as the 80% of net assets test. If our board
of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion
from an independent investment banking firm or another independent entity that commonly renders valuation opinions, with respect to the
satisfaction of such criteria. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority
of our independent directors. Notwithstanding the foregoing, if we are not then listed on Nasdaq, these rules will not be applicable
to us. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination,
although there is no assurance that will be the case.
We
anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own
or acquire shares will own or acquire 100% of the outstanding equity interests or assets of the target business or businesses. We may,
however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such
interests or assets of the target business in order to meet certain objectives of the target management team or stockholders or for other
reasons, 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 business sufficient for it not
to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act.
Even if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target, our stockholders
prior to our initial business combination may collectively own a minority interest in the post-transaction company, depending on
valuations ascribed to the target and us in our initial business combination transaction. For example, we could pursue a transaction
in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target, or issue a substantial
number of new shares to third-parties in connection with financing our initial business combination. In such cases, we would acquire
a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders
immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial
business combination. If less than 100% of the outstanding equity interests or assets of a target business or businesses are owned or
acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired by us is what will
be valued for purposes of the 80% of net assets test. If our initial business combination involves more than one target business, the
80% of net assets test will be based on the aggregate value of all of the target businesses.
We
are subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to
suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
Competition
We
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 are relatively limited when contrasted
with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the
net proceeds of our initial public offering and the sale of the private placement warrants, our ability to compete with respect to the
acquisition of certain target businesses that are sizable is limited by our available financial resources. Our sponsor or any of its
affiliates may make additional investments in us, although our sponsor has no obligation or other duty to do so. This inherent competitive
limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, our obligation to pay cash
in connection with our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial
business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by
target businesses. Any of these factors may place us at a competitive disadvantage in successfully negotiating and completing an initial
business combination.
Human
Capital Resources
We
currently have one officer and do not intend to have any full-time employees prior to the completion of our initial business combination.
Members of our management team are not obligated to devote any specific number of hours to our matters but they intend to devote as much
of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time that
any such person devotes in any time period to our company will vary based on whether a target business has been selected for our initial
business combination and the current stage of the business combination process.
Corporate
Information
Our
corporate website address is www.goldenarrowspac.com. The information contained on, or accessible through our corporate website or any
other website that we may maintain is not incorporated by reference into this Annual Report. Our executive offices are located at 10
E. 53rd Street, 13th Floor, New York, NY 10022 and our telephone number is (212) 430-2214.
Periodic
Reporting and Financial Information
We
have registered our units, Class A common stock and warrants under the Exchange Act and have reporting obligations, including the requirement
that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual
reports will contain financial statements audited and reported on by our independent registered public accounting firm.
We
will provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials
or proxy solicitation materials sent to stockholders to assist them in assessing the target business. These financial statements may
be required to be prepared in accordance with, or be reconciled to, GAAP or IFRS, depending on the circumstances and the historical financial
statements may be required to be audited in accordance with PCAOB standards. These financial statement requirements may limit the pool
of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us
to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination within the
prescribed time frame. While this may limit the pool of potential business combination 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, and no longer qualify as an emerging growth company, will we be required to comply with the independent
registered public accounting firm attestation requirements on our internal control over financial reporting. A target business may not
be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal
controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any
such acquisition.
We are an “emerging growth company,” as defined in Section
2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various
reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but
not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements
of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously
approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities
and the prices of our securities may be more volatile. In addition, Section 107 of the JOBS Act also provides that an “emerging
growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying
with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting
standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended
transition period. We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the
fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c)
in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates
exceeds $700 million as of the end of that year’s second fiscal quarter; and (2) the date on which we have issued more than $1.00
billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company”
shall have the meaning associated with it in the JOBS Act.
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 common stock held by non-affiliates exceeds $250 million
as of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during such completed fiscal
year and the market value of our common stock held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal
quarter.
ITEM 1A. RISK FACTORS
Summary of Risk Factors
An
investment in our securities involves a high degree of risk. The occurrence of one or more of the events or circumstances described in
this section, alone or in combination with other events or circumstances, may materially adversely affect our business, financial condition
and operating results. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.
Such risks include, but are not limited to:
| ● | We are a newly incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our ability
to achieve our business objective. |
| ● | Our public stockholders may not be afforded an opportunity to vote on our proposed business combination, which means we may complete
our initial business combination even though a majority of our public stockholders do not support such a combination. |
| ● | 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 stockholder approval of such business combination. |
| ● | If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of their respective
affiliates may enter into certain transactions, including purchasing shares or warrants from the public, which may influence the outcome
of our proposed business combination and reduce the public “float” of our securities. |
| ● | The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential
business combination targets, which may make it difficult for us to enter into a business combination with a target. |
| ● | The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us
to complete the most desirable business combination or optimize our capital structure. |
| ● | The requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses
leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business
combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial
business combination on terms that would produce value for our stockholders. |
|
● |
COVID-19 and the impact on businesses and debt and equity
markets could have a material adverse effect on our search for a business combination, and any target business with which we ultimately
consummate a business combination.
|
|
|
|
|
● |
Our search for a business combination, and any target business with
which we ultimately consummate a business combination, may be materially adversely affected by negative impacts on the global economy,
capital markets or other geopolitical conditions resulting from the recent invasion of Ukraine by Russia and subsequent sanctions against
Russia, Belarus and related individuals and entities. |
| ● | Past performance by members of our management team and their respective affiliates may not be indicative of future performance of
an investment in us. |
| ● | If a stockholder 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. |
| ● | 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. |
| ● | 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. |
| ● | You are not entitled to protections normally afforded to investors of many other blank check companies. |
| ● | Our proximity to our liquidation date expresses substantial doubt about our ability to continue as a “going concern. |
| ● | Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult
for us to complete our initial business combination. If we are unable to complete our initial business combination, our public stockholders
may receive only approximately $10.00 per share, or less in certain circumstances, on our redemption of their stock, and our warrants
will expire worthless. |
| ● | If the net proceeds of this offering and the sale of the private placement warrants not being held in the trust account are insufficient,
it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination
and we will depend on loans from our sponsor or management team to fund our search, to pay our taxes and to complete our initial business
combination. If we are unable to obtain such loans, we may be unable to complete our initial business combination. |
| ● | 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, accordingly, may have conflicts of interest in determining to which entity
a particular business opportunity or other transaction should be presented. |
| ● | Provisions in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit
the price investors might be willing to pay in the future for our Class A common stock and could entrench management. |
Risks Relating to Our Search for, Consummation of, or Inability
to Consummate, a Business Combination and Post-Business Combination Risks
We are a newly incorporated company with no operating history
and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a newly incorporated company with no operating results to date.
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 our initial business combination. If
we fail to complete our initial business combination, we will never generate any operating revenues.
Our public stockholders may not be afforded an opportunity to
vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority
of our public stockholders do not support such a combination.
We may not hold a stockholder vote to approve our initial business
combination unless the business combination would require stockholder approval under applicable law or stock exchange listing requirements
or if we decide to hold a stockholder vote for business or other reasons. Except as required by applicable law or stock exchange rules,
the decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders to sell their
shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing
of the transaction. Accordingly, we may consummate our initial business combination even if holders of a majority of our outstanding public
shares do not approve of the business combination we consummate.
If we seek stockholder approval of our initial business combination,
our sponsor, officers and directors have agreed to vote in favor of such initial business combination, regardless of how our public stockholders
vote.
Our sponsor, officers and directors have agreed (and their permitted
transferees will agree) to vote any founder shares and any public shares held by them in favor of our initial business combination. We
expect that our initial stockholders and their permitted transferees will own at least 20% of our outstanding shares of common stock at
the time of any such stockholder vote. Accordingly, if we seek stockholder approval of our initial business combination, it is more likely
that the necessary stockholder approval will be received than would be the case if our initial stockholders and their permitted transferees
agreed to vote their founder shares in accordance with the majority of the votes cast by our public stockholders.
Your only opportunity to affect the investment decision regarding
a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek
stockholder approval of such business combination.
You may not be provided with an opportunity to evaluate the specific
merits or risks of any target businesses. Additionally, since our board of directors may complete a business combination without seeking
stockholder approval, public stockholders may not have the right or opportunity to vote on the business combination. Accordingly, if we
do not seek stockholder approval, your only opportunity to affect the investment decision regarding a potential business combination may
be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender
offer documents mailed to our public stockholders in which we describe our initial business combination.
The ability of our public stockholders to redeem their shares
for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to
enter into a business combination with a target.
We may seek to enter into a business combination transaction agreement
with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many
public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not
be able to proceed with the business combination. In no event will we redeem our public shares in an amount that would cause our net tangible
assets to be less than $5,000,001 following such redemptions, 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 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 (including, potentially, with the same target). 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 stockholders to exercise redemption
rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our
capital structure.
At the time we enter into an agreement for our initial business combination,
we will not know how many stockholders may exercise their redemption rights and, therefore, 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 initial business combination agreement
requires us to use a portion of the cash in the trust account to pay the purchase price or requires us to have a minimum amount of cash
at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements or arrange for third-party financing.
In addition, if a larger number of shares is submitted for redemption than we initially expected, we may need to restructure the transaction
to reserve a greater portion of the cash in the trust account or arrange for third-party financing. Raising additional third-party financing
may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The 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 stockholders to exercise redemption
rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful
and that you would have to wait for liquidation in order to redeem your stock.
If our initial business combination agreement requires us to use a
portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability
that our initial business combination would be unsuccessful increases. If our initial business combination is unsuccessful, you would
not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity,
you could attempt to sell your stock in the open market; however, at such time our stock may trade at a discount to the pro rata amount
per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected
in connection with our redemption until we liquidate or you are able to sell your stock in the open market.
The requirement that we complete our initial business combination
within the prescribed time frame may give potential target businesses leverage over us in negotiating a business combination and may limit
the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution
deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.
Any potential target business with which we enter into negotiations
concerning a business combination will be aware that we must complete our initial business combination by March 19, 2023. Consequently,
such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial
business combination with that particular target business, we may be unable to complete our initial business combination with any target
business. This risk will increase as we get closer to the end of the timeframe described above. In addition, we may have limited time
to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive
investigation.
COVID-19 and the impact on businesses and debt and equity markets
could have a material adverse effect on our search for a business combination, and any target business with which we ultimately consummate
a business combination.
The COVID-19 pandemic has resulted in a widespread health crisis
that has adversely impacted the economies and financial markets worldwide, business operations and the conduct of commerce generally.
There is no way of being certain how long these adverse impacts will last. The COVID-19 pandemic, or other outbreaks of infectious
disease, could have a material adverse effect on the business of any potential target business with which we consummate a business combination.
Furthermore, we may be unable to complete a business combination if concerns relating to the COVID-19 pandemic 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 the COVID-19 pandemic 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 COVID-19 and the actions to contain the coronavirus or treat its impact, among others. If
the disruptions posed by the COVID-19 pandemic or other matters of global concern continue for an extensive period of time, it could
have a material adverse effect on our ability to consummate a business combination, or the operations of a target business with which
we ultimately consummate a business combination.
In addition, our ability to consummate a business combination may be
dependent on the ability to raise equity and debt financing and the COVID-19 pandemic or the occurrence of other similar events could
have a material adverse effect on our ability to raise adequate financing, 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 complete our initial business combination
within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem
our public shares and liquidate, in which case our public stockholders may receive only $10.00 per share, or less than such
amount in certain circumstances, and our warrants will expire worthless.
Our amended and restated certificate of incorporation provides that
we must complete our initial business combination by March 19, 2023. We may not be able to find a suitable target business and complete
our initial business combination within such time period. Our ability to complete our initial business combination may be negatively impacted
by general market conditions, volatility in the capital and debt markets and the other risks described herein. For example, the COVID-19 pandemic
persists both in the U.S. and globally and, while the extent of the impact of the outbreak on us will depend on future developments, it
could limit our ability to complete our initial business combination, including as a result of increased market volatility, decreased
market liquidity and third-party financing being unavailable on terms acceptable to us or at all. The recent invasion of Ukraine
by Russia and resulting sanctions may also have similar effects, and the impact of such effects on us will depend on future developments
that cannot be predicted with any degree of certainty. Furthermore, we may be unable to complete a business combination if continued concerns
relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel,
vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. Additionally, the COVID-19 pandemic,
the invasion of Ukraine by Russia and resulting sanctions, may negatively impact businesses we may seek to acquire. It may also have the
effect of heightening many of the other risks described in this “Risk Factors” section, such as those related to the market
for our securities and cross-border transactions. Additionally, financial markets may be adversely affected by current or anticipated
military conflict, including between Russia and Ukraine, terrorism, sanctions or other geopolitical events globally.
If we have not completed our initial business combination within such
time period or during any Extension Period, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly
as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in
cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable,
and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption
will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions,
if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders
and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of
creditors and the requirements of other applicable law. In such case, our public stockholders may receive only $10.00 per share, or less
than $10.00 per share, on the redemption of their shares, and our warrants will expire worthless. 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
stockholders may be less than $10.00 per share” and other risk factors herein.
If a stockholder 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 stockholder
fails to receive our tender offer or proxy materials, as applicable, such stockholder may not become aware of the opportunity to redeem
its shares. In addition, the tender offer documents or proxy materials, as applicable, that we will furnish to holders of our public shares
in connection with our initial business combination will describe the various procedures that must be complied with in order to validly
tender or redeem public shares. For example, we may require our public stockholders seeking to exercise their redemption rights, whether
they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior
to the date set forth in the tender offer or proxy materials documents mailed to such holders, or up to two business days prior to the
scheduled vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver their
shares to the transfer agent electronically. In the event that a stockholder fails to comply with these procedures, its shares may not
be redeemed.
Because of our limited resources and the significant competition
for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are unable
to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain
circumstances, on our redemption of their stock, and our warrants will expire worthless.
We 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 are seeking to acquire. Many of these individuals
and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions
of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and
other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with
those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds
of our initial public offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition
of certain target businesses that are sizable is limited by our available financial resources. Our sponsor or any of its affiliates may
make additional investments in us, although our sponsor and its affiliates have no obligation or other duty to do so. This inherent competitive
limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, our obligation to pay cash
in connection with our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial
business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by
target businesses. Any of these factors may place us at a competitive disadvantage in successfully negotiating and completing an initial
business combination. If we are unable to complete our initial business combination, our public stockholders 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. 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 stockholders may be less than $10.00 per share” and other risk factors herein.
If the funds not being held in the trust account are insufficient
to allow us to operate until at least March 19, 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 March 91, 2023, assuming that our initial business combination is not completed during that time.
We expect to incur significant costs in pursuit of our acquisition plans. Management’s plans to address this need for capital through
our initial public offering and potential loans from certain of our affiliates are discussed in the section of this Annual Report titled
“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” However, our affiliates are
not obligated to make loans to us in the future, and we may not be able to raise additional financing from unaffiliated parties necessary
to fund our expenses. Any such event in the future may negatively impact the analysis regarding our ability to continue as a going concern
at such time.
We believe that, upon the closing of our initial public offering, the
funds available to us outside of the trust account will be sufficient to allow us to operate for at least the 24 months following
the closing of our initial public offering; 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 commitment fees for financing, fees to consultants to assist us with our search
for a target business or as a down payment or to fund a “no-shop” provision (a provision in letters of intent or merger agreements
designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more
favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention
to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business and were subsequently
required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching
for, or conduct due diligence with respect to, a prospective target business. If we are unable to complete our initial business combination,
our public stockholders 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. 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 stockholders may be less than $10.00 per share”
and other risk factors herein.
If the net proceeds of our initial public offering and the sale
of the private placement warrants not being held in the trust account are insufficient, it could limit the amount available to fund our
search for a target business or businesses and complete our initial business combination and we will depend on loans from our sponsor
or management team to fund our search, to pay our taxes and to complete our initial business combination. If we are unable to obtain such
loans, we may be unable to complete our initial business combination.
If we are required to seek additional capital, we would need to borrow
funds from our sponsor, management team or other third parties to operate or may be forced to liquidate. Neither our sponsor, members
of our management team nor any of their respective affiliates is under any obligation or other duty to loan funds to, or invest in, us
in such circumstances. Any such loans may 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. In such case, our public stockholders may receive
only $10.00 per share, or less in certain circumstances, and our warrants will expire worthless. 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
stockholders may be less than $10.00 per share” and other risk factors herein.
Subsequent to our completion of our initial business combination,
we may be required to subsequently 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 the price of our securities, 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 identify all
material issues that may be present with a particular target business, that it would be possible to uncover all material issues through
a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As
a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment
or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected
risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even
though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of
this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause
us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target
business or by virtue of our obtaining post-combination debt financing. Accordingly, any stockholders or warrant holders who choose
to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities.
Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.
If, after we distribute the proceeds in the trust account to
our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed,
a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their
fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.
If, after we distribute the proceeds in the trust account to our public
stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions
received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer”
or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders.
In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith
by paying public stockholders from the trust account prior to addressing the claims of creditors, thereby exposing itself and us to claims
of punitive damages.
If, before distributing the proceeds in the trust account to
our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed,
the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount that would otherwise
be received by our stockholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust account to our public
stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds
held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the
claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account,
the per-share amount that would otherwise be received by our public stockholders in connection with our liquidation would be reduced.
Our stockholders may be held liable for claims by third parties
against us to the extent of distributions received by them upon redemption of their shares.
Under the
Delaware General Corporation Law, or the DGCL, stockholders may be held liable for claims by third parties against a corporation to the
extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders
upon the redemption of our public shares in the event we do not complete our initial business combination within the required time period
may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280
of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during
which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject
any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability
of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the
claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of
the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following the 24th month
from the closing of our initial public offering (or the end of any Extension Period) in the event we do not complete our initial business
combination and, therefore, we do not intend to comply with the foregoing procedures.
Because we do comply with Section 280, Section 281(b) of
the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending
claims or claims that may be potentially brought against us within the 10 years following our dissolution. However, because we are
a blank check company, rather than an operating company, and our operations are limited to searching for prospective target businesses
to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, consultants, etc.) or prospective
target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect
to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed
to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot
assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially
be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend
beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders
upon the redemption of our public shares in the event we do not complete our initial business combination within the required time period
is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant
to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption
distribution, instead of three years, as in the case of a liquidating distribution.
We may not hold an annual meeting of stockholders until after
we consummate our initial business combination and you will not be entitled to any of the corporate protections provided by such a meeting.
In accordance with Nasdaq corporate governance requirements, we are
not required to hold an annual meeting until one year after our first fiscal year end following our listing on Nasdaq. Under Section 211(b)
of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance
with our bylaws unless such election is made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders
until after we consummate our initial business combination and thus may not be in compliance with Section 211(b) of the DGCL, which
requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to our consummation of our initial
business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance
with Section 211(c) of the DGCL. Until we hold an annual meeting of stockholders, public stockholders may not be afforded the opportunity
to discuss company affairs with management. In addition, prior to our business combination (a) as holders of our Class A common
stock, our public stockholders do not have the right to vote on the appointment of our directors and (b) holders of a majority of
the outstanding shares of our Class B common stock may remove a member of our board of directors for any reason.
The grant of registration rights to our initial stockholders
and their permitted transferees 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 common stock.
Pursuant to a Registration Rights Agreement entered into upon the closing
of our initial public offering, at or after the time of our initial business combination, our initial stockholders and their permitted
transferees can demand that we register the resale of their founder shares after those shares convert to shares of our Class A common
stock. In addition, holders of our private placement warrants and their permitted transferees can demand that we register the resale of
the private placement warrants and the shares of Class A common stock issuable upon exercise of the private placement warrants, and
holders of warrants that may be issued upon conversion of working capital loans may demand that we register the resale of such warrants
or the Class A common stock issuable upon exercise of such warrants. We will bear the cost of registering these securities. The registration
and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market
price of our Class A common stock. In addition, the existence of the registration rights may make our initial business combination
more costly or difficult to complete. This is because the stockholders of the target business may increase the equity stake they seek
in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A common
stock that is expected when the securities described above are registered for resale.
Because we are neither limited to evaluating target businesses
in a particular industry, sector or geographic area nor have we selected 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’s operations.
While we have initially focused our search on identifying a prospective
target business in the healthcare or healthcare-related infrastructure industries in the United States and other developed countries,
we may seek to complete a business combination with an operating company in any industry, sector or geographic area. However, we are not,
under our amended and restated certificate of incorporation, permitted to effectuate our initial business combination solely with another
blank check company or similar company with nominal operations. There is no basis for you to evaluate the possible merits or risks of
any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects which
we may ultimately acquire. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in
the business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an
established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable
or a development stage entity. Although our officers and directors endeavor to evaluate the risks inherent in any 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 securiteis will
ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination
target. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business
combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy
for such reduction in value.
We may seek acquisition opportunities in acquisition targets
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 such 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
relevant to such acquisition. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following
our initial business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely
to have a remedy for such reduction in value.
Although we have identified general criteria and guidelines that
we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target
that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination
may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria and guidelines for evaluating
prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not
have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of
these criteria and guidelines, such combination may not be as successful as a combination with a business that does meet all of our general
criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria
and guidelines, a greater number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any
closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder
approval of the transaction is required by applicable law or stock exchange rules, or we decide to obtain stockholder approval for business
or other reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target business
does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders
may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants
will expire worthless.
We may seek acquisition opportunities with an early stage company,
a financially unstable business or an entity lacking an established record of revenue or earnings, which could subject us to volatile
revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel.
To the extent we complete our initial business combination with an
early stage company, 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 investing in a business without
a proven business model and with limited historical financial data, volatile revenues or earnings, intense competition and difficulties
in obtaining and retaining key personnel. Although our officers and directors 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. 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 are not required to obtain an opinion from an independent
investment banking firm or from an independent accounting firm regarding fairness. Consequently, you may have no assurance from an independent
source that the price we are paying for the business is fair to our company from a financial point of view.
Unless we complete our initial business combination with a business
that is affiliated with our sponsor, officers or directors, we are not required to obtain an opinion from an independent investment banking
firm that is a member of FINRA or from an independent accounting firm that the price we are paying is fair to our company from a financial
point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine
fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our tender
offer documents or proxy solicitation materials, as applicable, related to our initial business combination.
Resources could be wasted in researching acquisitions that are
not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we
are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less
than such amount 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 complete our initial business combination for any number
of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially
adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business
combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation
of our trust account and our warrants will expire worthless. 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 stockholders may be less than $10.00 per
share” and other risk factors herein.
Our ability to successfully effect our initial business combination
and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us following our initial
business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
Our ability to successfully effect our initial business combination
is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be
ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions following
our initial business combination, we do not currently expect that any of them will do so. 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.
In addition, the officers and directors of an acquisition candidate
may resign upon completion of our initial business combination. The departure of a business combination target’s key personnel could
negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s
key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that
certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our
initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
Our key personnel may negotiate employment or consulting agreements
with a target business in connection with a particular business combination, and a particular business combination may be conditioned
on the retention or resignation of such key personnel. These agreements may cause our key personnel to have conflicts of interest in determining
whether to proceed with a particular business combination. However, we do not expect that any of our key personnel will remain with us
after the completion of our initial business combination.
Our key personnel may be able to remain with our company after the
completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with
the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could
provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render
to us after the completion of the business combination. Such negotiations also could make such key personnel’s retention or resignation
a condition to any such agreement. The personal and financial interests of such individuals may influence their motivation in identifying
and selecting a target business. However, we believe the ability of such individuals to remain with us after the completion of our initial
business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business
combination, as we do not expect that any of our key personnel will remain with us after the completion of our initial business combination.
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 have a limited ability to assess the management of a prospective
target business and, as a result, may effect our initial business combination with a target business whose management may not have the
skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting our initial business
combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack
of time, resources or information. Our assessment of the capabilities of the target’s management, therefore, may prove to be incorrect
and such management may lack the skills, qualifications or abilities we suspected. Should the target’s management not possess the
skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business
may be negatively impacted. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following
our initial business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders 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 candidate’s key personnel
upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members
of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business
combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place. As a result,
we may need to reconstitute the management team of the post-transaction company in connection with our initial business combination,
which may adversely impact our ability to complete an acquisition in a timely manner or at all.
Since our initial stockholders will lose their entire investment
in us if our initial business combination is not completed (other than with respect to any public shares they may hold), a conflict of
interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
In January 2021, our sponsor purchased 7,187,500 founder shares
for a capital contribution of $25,000. The number of founder shares issued was determined based on the expectation that the founder shares
would represent 20% of the outstanding shares of common stock upon the completion of our initial public offering. The founder shares will
be worthless if we do not complete an initial business combination.
In addition, our sponsor purchase an aggregate of 5,000,000 private
placement warrants for a purchase price of $7,500,000, or $1.50 per warrant, that will also be worthless if we do not complete our initial
business combination within the allocated time period.
The personal and financial interests of our officers and directors
may influence their motivation in identifying and selecting a target business combination, completing an initial business combination
and influencing the operation of the business following the initial business combination. This risk may become more acute as the deadline
for completing our initial business combination nears.
We may only be able to complete one business combination with
the proceeds of our initial public offering and the sale of the private placement warrants, which will cause us to be solely dependent
on a single business which may have a limited number of products or services. This lack of diversification may materially negatively impact
our operations and profitability.
We may effectuate our initial business combination with a single target
business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our
initial business combination with more than one target business because of various factors, including the existence of complex accounting
issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the
financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business
combination with only a single entity our lack of diversification may subject us to numerous economic, competitive and regulatory risks.
Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike
other entities which may have the resources to complete several business combinations in different industries or different areas of a
single industry. Accordingly, the prospects for our success may be:
| ● | solely dependent upon the performance of a single business,
property or asset; or |
| ● | dependent upon the development or market acceptance of a
single or limited number of products, processes or services. |
This lack of diversification may subject us to numerous economic,
competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we
may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business combinations
with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased
costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several businesses that are
owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous
closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business
combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect
to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated
with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business.
If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial business combination with
a private company about which little information is available, which may result in a business combination with a company that is not as
profitable as we suspected, if at all.
In pursuing our acquisition strategy, we may seek to effectuate our
initial business combination with a privately held company. Very little public information generally exists about private companies, and
we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information,
which may result in a business combination with a company that is not as profitable as we suspected, if at all.
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 targets companies to demand improved financial terms. Attractive deals could also become
scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions, including the recent invasion of Ukraine
by Russia and the resulting sanctions, 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.
Changes in the market for directors and officers liability insurance
could make it more difficult and more expensive for us to negotiate and complete an initial business combination.
In recent months, the market for directors and officers liability insurance
for special purpose acquisition companies has changed. Fewer insurance companies are offering quotes for directors and officers liability
coverage, the premiums charged for such policies have generally increased and the terms of such policies have generally become less favorable.
There can be no assurance that these trends will not continue.
The increased cost and decreased availability of directors and officers
liability insurance could make it more difficult and more expensive for us to negotiate an initial business combination. In order to obtain
directors and officers liability insurance or modify its coverage as a result of becoming a public company, the post-business combination
entity might need to incur greater expense, accept less favorable terms or both. However, any failure to obtain adequate directors and
officers liability insurance could have an adverse impact on the post-business combination’s ability to attract and retain
qualified officers and directors.
In addition, even after we were to complete an initial business combination,
our directors and officers could still be subject to potential liability from claims arising from conduct alleged to have occurred prior
to the initial business combination. As a result, in order to protect our directors and officers, the post-business combination entity
may need to purchase additional insurance with respect to any such claims (“run-off insurance”). The need for run-off insurance
would be an added expense for the post-business combination entity, and could interfere with or frustrate our ability to consummate
an initial business combination on terms favorable to our investors.
Our management may not be able to maintain control of a target
business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business, new management
will possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination so that the post-transaction company
in which our public stockholders own or acquire shares will own less than 100% of the outstanding 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 business 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 or acquires 50% or more of the outstanding voting securities of the
target, our stockholders prior to our initial business combination may collectively own a minority interest in the post business combination
company, depending on valuations ascribed to the target and us in our initial business combination. For example, we could pursue a transaction
in which we issue a substantial number of new shares of common stock in exchange for all of the outstanding capital stock of a target,
or issue a substantial number of new shares to third-parties in connection with financing our initial business combination. In such
cases, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of common
stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of common stock
subsequent to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single
person or group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may make it more likely
that our management will not be able to maintain our control of the target business.
We do not have a specified maximum redemption threshold. The
absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial
majority of our stockholders do not agree.
Our amended and restated certificate of incorporation does not provide
a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net
tangible assets to be less than $5,000,001 following such redemptions, or any greater net tangible asset or cash requirement which may
be contained in the agreement relating to our initial business combination. As a result, we may be able to complete our initial business
combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares
or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our
sponsor, officers, directors, advisors or any of their respective affiliates. In the event the aggregate cash consideration we would be
required to pay for all shares of common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions
pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the
business combination or redeem any shares, all shares of common stock submitted for redemption will be returned to the holders thereof,
and we instead may search for an alternate business combination (including, potentially, with the same target).
In order to effectuate an initial business combination, blank
check companies have, in the recent past, amended various provisions of their charters and modified governing instruments, including their
warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing
instruments, including our warrant agreement, in a manner that will make it easier for us to complete our initial business combination
that some of our stockholders or warrant holders may not support.
In order to effectuate an initial business combination, blank check
companies have, in the recent past, amended various provisions of their charters and modified governing instruments, including their warrant
agreements. For example, blank check companies have amended the definition of business combination, increased redemption thresholds, extended
the time to consummate an initial business combination and, with respect to their warrants, amended their warrant agreements to require
the warrants to be exchanged for cash and/or other securities. We cannot assure you that we will not seek to amend our charter or governing
instruments or extend the time to consummate an initial business combination in order to effectuate our initial business combination.
To the extent any such amendment would be deemed to fundamentally change the nature of any of the securities offered through the registration
statement filed in connection with our initial public offering, we would register, or seek an exemption from registration for, the affected
securities.
Certain provisions of our amended and restated certificate of
incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release
of funds from our trust account) may be amended with the approval of holders of at least 65% of our outstanding common stock, which is
a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and
restated certificate of incorporation and the trust agreement to facilitate the completion of an initial business combination that some
of our stockholders may not support.
Some other blank check companies have a provision in their charter
which prohibits the amendment of certain of its provisions, including those which relate to a company’s pre-business combination
activity, without approval by holders of a certain percentage of the company’s stockholders. In those companies, amendment of these
provisions typically requires approval by holders holding between 90% and 100% of the company’s public shares. Our amended and restated
certificate of incorporation provides that any of its provisions (other than amendments relating to the appointment or removal of directors
prior to our initial business combination, which require the approval by holders of a majority of at least 90% of the outstanding shares
of our common stock voting at a stockholder meeting) related to pre-business combination activity (including the requirement to deposit
proceeds of our initial public offering and the sale of the private placement warrants into the trust account and not release such amounts
except in specified circumstances and to provide redemption rights to public stockholders as described herein) may be amended if approved
by holders of at least 65% of our outstanding common stock, and corresponding provisions of the trust agreement governing the release
of funds from our trust account may be amended if approved by holders of at least 65% of our outstanding common stock. Unless specified
in our amended and restated certificate of incorporation or bylaws, or as required by applicable law or stock exchange rules, the affirmative
vote of a majority of the outstanding shares of our common stock that are voted is required to approve any such matter voted on by our
stockholders, and, prior to our initial business combination, the affirmative vote of holders of a majority of the outstanding shares
of our Class B common stock is required to approve the election or removal of directors. We may not issue additional securities that
can vote pursuant to our amended and restated certificate of incorporation on any initial business combination or any amendments to our
amended and restated certificate of incorporation. Our initial stockholders, who beneficially own approximately 20% of our common stock,
may participate in any vote to amend our amended and restated certificate of incorporation 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 certificate of incorporation
which governs our pre-business combination behavior more easily than some other blank check companies, and this may increase our
ability to complete our initial business combination with which you do not agree.
Our sponsor, officers and directors have agreed, pursuant to a written
agreement, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to modify the substance
or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares
if we do not complete our initial business combination by March 19, 2023 or (B) with respect to any other provision relating to stockholders’
rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their
shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number
of then outstanding public shares. These agreements are contained in a letter agreement that we have entered into with our sponsor, officers
and directors. Our public stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will
not have the ability to pursue remedies against our sponsor, officers or directors for any breach of these agreements. As a result, in
the event of a breach, our public stockholders would need to pursue a stockholder derivative action, subject to applicable law.
Certain agreements related to our initial public offering may
be amended without stockholder approval.
Certain agreements, including the letter agreement among us and our
sponsor, officers and directors, and the registration rights agreement among us and our initial stockholders, may be amended without stockholder
approval. These agreements contain various provisions, including transfer restrictions on our founder shares and private placement warrants,
that our public stockholders might deem to be material. While we do not expect our board of directors to approve any amendment to any
of these agreements prior to our initial business combination, it may be possible that our board of directors, in exercising its business
judgment and subject to its fiduciary duties, chooses to approve one or more amendments to any such agreement in connection with the consummation
of our initial business combination. Any such amendments would not require approval from our stockholders, may result in the completion
of our initial business combination that may not otherwise have been possible, and may have an adverse effect on the value of an investment
in our securities.
We may be unable to obtain additional financing to complete our
initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon
a particular business combination.
Although we believe that the net proceeds of our initial public offering
and the sale of the private placement warrants will be sufficient to allow us to complete our initial business combination, because we
have not yet selected any target business we cannot ascertain the capital requirements for any particular transaction. If the net proceeds
of our initial public offering and the sale of the private placement warrants prove to be insufficient, either because of the size of
our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem
for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination or
the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek
additional financing or to abandon the proposed business combination. We cannot assure you that such financing will be available on acceptable
terms, if at all. None of our sponsor or its affiliates are obligated to provide, or seek, any such financing or, except as expressly
set forth herein, to provide any other services to us. 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
initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure
additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers,
directors or stockholders 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 stockholders 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.
Our initial stockholders control the election of our board of
directors until consummation of our initial business combination and will hold a substantial interest in us. As a result, they will elect
all of our directors prior to our initial business combination and may exert a substantial influence on actions requiring a stockholder
vote, potentially in a manner that you do not support.
Our initial stockholders own approximately 20% of our outstanding common
stock. In addition, prior to our initial business combination, holders of our Class B common stock have the right to appoint all
of our directors and may remove members of our board of directors for any reason. Holders of our public shares have no right to vote on
the election of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended
by holders of a majority of at least 90% of the outstanding shares of our common stock voting at a stockholder meeting. As a result, you
will not have any influence over the election of directors prior to our initial business combination.
Neither our initial stockholders 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 common stock. In addition, as a result of their
substantial ownership in our company, our initial stockholders may exert a substantial influence on other actions requiring a stockholder
vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation and
approval of major corporate transactions. If our initial stockholders purchase any additional shares of common stock in the open market
or in privately negotiated transactions, this would increase their influence over these actions. Accordingly, our initial stockholders
may exert significant influence over actions requiring a stockholder vote.
A provision of our warrant agreement may make it more difficult
for us to consummate an initial business combination.
If (x) we issue additional shares of Class A common stock
or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at a
newly issued price of less than $9.20 per share of Class A common stock, (y) the aggregate gross proceeds from such issuances represent
more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the
date of the completion of our initial business combination (net of redemptions), and (z) the Market Value of our Class A common stock
is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher
of the Market Value and the newly issued price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent)
to be equal to 180% of the higher of the Market Value and the newly issued price. This may make it more difficult for us to consummate
an initial business combination with a target business.
Our search for a business combination,
and any target business with which we ultimately consummate a business combination, may be materially adversely affected by negative impacts
on the global economy, capital markets or other geopolitical conditions resulting from the recent invasion of Ukraine by Russia and subsequent
sanctions against Russia, Belarus and related individuals and entities.
United States and global
markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the recent invasion of Ukraine
by Russia in February 2022. In response to such invasion, the North Atlantic Treaty Organization (“NATO”) deployed additional
military forces to eastern Europe, and the United States, the United Kingdom, the European Union and other countries have announced various
sanctions and restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain financial
institutions from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system. Certain countries, including
the United States, have also provided and may continue to provide military aid or other assistance to Ukraine during the ongoing military
conflict, increasing geopolitical tensions with Russia. The invasion of Ukraine by Russia and the resulting measures that have been taken,
and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union and other countries have created
global security concerns that could have a lasting impact on regional and global economies. Although the length and impact of the ongoing
military conflict in Ukraine is highly unpredictable, the conflict could lead to market disruptions, including significant volatility
in commodity prices, credit and capital markets, as well as supply chain interruptions. Additionally, Russian military actions and the
resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital
markets.
Any of the abovementioned
factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian
invasion of Ukraine and subsequent sanctions, could adversely affect our search for a business combination, particularly in Europe since
that region includes Russia, and any target business with which we ultimately consummate a business combination, although we are not seeking
a target business in Russia. The extent and duration of the Russian invasion of Ukraine, resulting sanctions and any related market disruptions
are impossible to predict, but could be substantial, particularly if current or new sanctions continue for an extended period of time
or if geopolitical tensions result in expanded military operations on a global scale. Any such disruptions may also have the effect of
heightening many of the other risks described in this “Risk Factors” section, such as those related to the market for our
securities, cross-border transactions or our ability to raise equity or debt financing in connection with any particular business combination.
If these disruptions 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.
Because we must furnish our stockholders with target business
financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective
target businesses.
The federal proxy rules require that a proxy statement with respect
to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial statement
disclosure 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 GAAP, or international financial
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 financial statements in time for us to disclose such financial statements in accordance with federal proxy
rules and complete our initial business combination within the prescribed time frame.
Compliance obligations under the Sarbanes-Oxley Act may make
it more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase
the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act requires that we evaluate
and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31,
2022. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth
company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal
control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act
particularly burdensome on us as compared to other public companies because a target business with which we seek to complete our initial
business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls.
The development of the internal control of any such entity to achieve
compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
Provisions in our amended and restated certificate of incorporation
and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A
common stock and could entrench management.
Our amended and restated certificate of incorporation contains provisions
that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions include
staggered board of directors, the ability of the board of directors to designate the terms of and issue new series of preferred shares,
and the fact that prior to the completion of our initial business combination only holders of our shares of Class B common stock,
which are held by our initial stockholders, are entitled to vote on the election of directors, which may make more difficult the removal
of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our
securities.
We are also subject to anti-takeover provisions under Delaware
law, which could delay or prevent a change of control. Together these provisions may make more difficult the removal of management and
may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
Our amended and restated certificate of incorporation designates
the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be
initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with
our company or our company’s directors, officers or other employees.
Our amended and restated certificate of incorporation provides that,
unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest
extent permitted by law, be the sole and exclusive forum for any (1) derivative action or proceeding brought on behalf of our company,
(2) action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of our company to our
company or our stockholders, or any claim for aiding and abetting any such alleged breach, (3) action asserting a claim against our
company or any director or officer of our company arising pursuant to any provision of the DGCL or our amended and restated certificate
of incorporation or our bylaws, or (4) action asserting a claim against us or any director or officer of our company governed by
the internal affairs doctrine except for, as to each of (1) through (4) above, any claim (a) as to which the Court of Chancery
determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party
does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination) or (b) which
is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery. Notwithstanding the foregoing, the provisions
of this paragraph will not apply to suits brought to enforce any liability or duty created by the Securities Act or the Exchange Act or
otherwise arising under federal securities laws, for which the federal district courts of the United States of America shall be the
sole and exclusive forum. We note, however, that investors cannot waive compliance with the federal securities laws and the rules and
regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought
to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Any person or entity purchasing
or otherwise acquiring any interest in any shares of our capital stock shall be deemed to have notice of and to have consented to the
forum provisions in our amended and restated certificate of incorporation. If any action the subject matter of which is within the scope
the forum provisions is filed in a court other than a court located within the State of Delaware (a “foreign action”) in the
name of any stockholder, such stockholder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal
courts located within the State of Delaware in connection with any action brought in any such court to enforce the forum provisions (an
“enforcement action”), and (y) having service of process made upon such stockholder in any such enforcement action by
service upon such stockholder’s counsel in the foreign action as agent for such stockholder.
This forum selection clause may discourage claims or limit stockholders’
ability to submit claims in a judicial forum that they find favorable and may result in additional costs for a stockholder seeking to
bring a claim. While we believe the risk of a court declining to enforce this forum selection clause is low, if a court were to determine
the forum selection clause to be inapplicable or unenforceable in an action, we may incur additional costs in conjunction with our efforts
to resolve the dispute in an alternative jurisdiction, which could have a negative impact on our results of operations and financial condition
and result in a diversion of the time and resources of our management and board of directors.
Data privacy and security breaches, including, but not limited
to, those resulting from cyber incidents or attacks, acts of vandalism or theft, computer viruses and/or misplaced or lost data, could
result in information theft, data corruption, operational disruption, reputational harm, criminal liability and/or financial loss.
In searching for targets for our initial business combination, we depend
on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties
with which we may deal. Sophisticated and deliberate attacks on, or privacy and security breaches in, our systems or infrastructure, or
the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information,
and sensitive or confidential data. As an early stage company without significant investments in data privacy or security protection,
we may not be sufficiently protected against such occurrences and therefore could be liable for privacy and security breaches, including
potentially those caused by any of our subcontractors.
We may not have sufficient resources to adequately protect against,
or to investigate and remediate any vulnerability to, cyber incidents or other incidents that result in a privacy or security breach.
It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to reputational
harm, criminal liability and/or financial loss.
If our management team pursues a company with operations or opportunities
outside of the United States for our initial business combination, we may face additional burdens in connection with investigating,
agreeing to and completing such combination, and if we effect such initial business combination, we would be subject to a variety of additional
risks that may negatively impact our operations.
If our management team pursues a company with operations or opportunities
outside of the United States for our initial business combination, we would be subject to risks associated with cross-border business
combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting due
diligence in a foreign market, having such transaction approved by any local governments, regulators or agencies and changes in the purchase
price based on fluctuations in foreign exchange rates.
If we effect our initial business combination with such a company,
we would be subject to any special considerations or risks associated with companies operating in an international setting, including
any of the following:
| ● | costs and difficulties inherent in managing cross-border business
operations and complying with commercial and legal requirements of overseas markets; |
| ● | rules and regulations regarding currency redemption; |
| ● | laws governing the manner in which future business combinations
may be effected; |
| ● | tariffs and trade barriers; |
| ● | regulations related to customs and import/export matters; |
| ● | changes in local regulations as part of a response to the
COVID-19 coronavirus outbreak; |
| ● | tax issues, including limits on our ability to change our
tax residence from the United States, complex withholding or other tax regimes which may apply in connection with our initial business
combination or to our structure following our initial business combination, variations in tax laws as compared to the United States,
and potential changes in the applicable laws in the United States and/or relevant non-U.S. jurisdictions; |
| ● | challenges in collecting accounts receivable; |
| ● | cultural and language differences; |
|
● |
crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars, such as the recent invasion of Ukraine by Russia; |
| ● | deterioration of political relations with the United States; |
| ● | obligatory military service by personnel; and |
| ● | government appropriation of assets. |
We may not be able to adequately address these additional risks. If
we were unable to do so, we may be unable to complete such combination or, if we complete such combination, our operations might suffer,
either of which may adversely impact our results of operations and financial condition.
Our initial business combination and our structure thereafter
may not be tax-efficient to our stockholders and warrant holders. As a result of our business combination, our tax obligations may be
more complex, burdensome and uncertain.
Although we will attempt to structure our initial business combination
in a tax-efficient manner, tax structuring considerations are complex, the relevant facts and law are uncertain and may change, and
we may prioritize commercial and other considerations over tax considerations. For example, in connection with our initial business combination
and subject to requisite stockholder approval, we may structure our business combination in a manner that requires stockholders and/or
warrant holders to recognize gain or income for tax purposes. We do not intend to make any cash distributions to stockholders or warrant
holders to pay taxes in connection with our business combination or thereafter. Accordingly, a stockholder or a warrant holder may need
to satisfy any liability resulting from our initial business combination with cash from its own funds or by selling all or a portion of
such holder’s shares or warrants. In addition, we may effect a business combination with a target company in another jurisdiction
or reincorporate in a different jurisdiction (including, but not limited to, the jurisdiction in which the target company or business
is located). As a result, stockholders and warrant holders may be subject to additional income, withholding or other taxes with respect
to their ownership of us after our initial business combination.
Furthermore, we may effect a business combination with a target company
that has business operations outside of the United States, and, possibly, business operations in multiple jurisdictions. If we effect
such a business combination, we could be subject to significant income, withholding and other tax obligations in a number of jurisdictions
with respect to income, operations and subsidiaries related to those jurisdictions. Due to the complexity of tax obligations and filings
in other jurisdictions, we may have a heightened risk related to audits or examinations by taxing authorities. This additional complexity
and risk could have an adverse effect on our after-tax profitability and financial condition.
If our management following our initial business combination
is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead
to various regulatory issues.
Following our initial business combination, any or all of our management
could resign from their positions as officers of the post-business combination company, and the management of the target business
at the time of the business combination could remain in place. Management of the target business may not be familiar with U.S. securities
laws. If new management is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such
laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.
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, social and
government 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.
Our proximity to our liquidation date expresses substantial
doubt about our ability to continue as a “going concern.”
In connection
with our assessment of going concern considerations in accordance with the Financial Accounting Standards Board’s (“FASB”)
Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue
as a Going Concern,” management has determined that mandatory liquidation and subsequent dissolution raises substantial doubt about
our company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities
should our company be required to liquidate after March 19, 2023. The financial statements do not include any adjustment that might be
necessary if our company is unable to continue as a going concern.
Risks Relating to Our Securities
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 securities are currently listed on Nasdaq. Although we currently
meet the minimum initial listing standards set forth in the Nasdaq listing standards, we cannot assure you that our securities will continue
to be listed on Nasdaq in the future or prior to our initial business combination. In order to continue listing our securities on Nasdaq
prior to our initial business combination, we must maintain certain financial, distribution and stock price levels. Generally, we must
maintain a minimum amount in stockholders’ equity (generally $2,500,000) and a minimum number of holders of our securities (generally
300 public holders). Additionally, in connection with our initial business combination, we will be required to demonstrate compliance
with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements, in order
to continue to maintain the listing of our securities on Nasdaq. We cannot assure you that we will be able to meet those initial listing
requirements at that time.
If Nasdaq delists any of our securities from trading on its exchange
and we are not able to list such securities on another national securities exchange, we expect such 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 common stock is a “penny
stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result
in a reduced level of trading activity in the secondary trading market for our securities; |
| ● | a limited amount of news and analyst coverage; and |
| ● | a decreased ability to issue additional securities or obtain
additional financing in the future. |
The National Securities Markets Improvement Act of 1996, which is a
federal statute, prevents or pre-empts the states from regulating the sale of certain securities, which are referred to as “covered
securities.” Because our securities are listed on Nasdaq, they qualify as covered securities under such statute. Although the states
are pre-empted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there
is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities
in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued
by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and
might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further,
if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under such statute and we would be subject
to regulation in each state in which we offer our securities.
If we seek stockholder approval of our initial business combination
and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to
hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 15% of our Class A
common stock.
If we seek stockholder approval of our initial business combination
and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended
and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other
person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act),
will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in our initial public offering,
which we refer to as the “Excess Shares,” without our prior consent. However, our amended and restated certificate of incorporation
does not restrict our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business
combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination
and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you
will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as a
result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell
your stock in open market transactions, potentially at a loss.
If we seek stockholder approval of our initial business combination,
our sponsor, directors, officers, advisors or any of their respective affiliates may enter into certain transactions, including purchasing
shares or warrants from the public, which may influence the outcome of our proposed business combination and reduce the public “float”
of our securities.
If we seek stockholder approval of our initial business combination
and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor,
directors, officers, advisors or any of their respective affiliates may purchase public shares or public warrants or a combination thereof
in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination,
although they are under no obligation or other duty to do so. Such a purchase may include a contractual acknowledgement that such public
stockholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise
its redemption rights. In the event that our sponsor, directors, officers, advisors or any of their respective affiliates purchase public
shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such
selling public stockholders 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 stockholder would receive if it elected to redeem its shares in connection
with our initial business combination. Additionally, at any time at or prior to our initial business combination, subject to applicable
securities laws (including with respect to material nonpublic information), our sponsor, directors, officers, advisors or any of their
affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their
public shares in favor of our initial business combination or not redeem their public shares. However, such persons have no current commitments,
plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. The purpose
of any such transaction could be to (1) vote such shares in favor of the initial business combination and thereby increase the likelihood
of obtaining stockholder approval of the initial business combination, (2) reduce the number of public warrants outstanding or to
vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination or
(3) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of
cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. Any such transactions
may result in the completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float”
of our Class A common stock or warrants and the number of beneficial holders of our securities may be reduced, possibly making it
difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
We have not registered the shares of Class A common stock
issuable upon exercise of the warrants under the Securities Act or any state securities laws, 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 have not registered the shares of Class A common stock issuable
upon exercise of the warrants under the Securities Act or any state securities laws. 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 commercially reasonable efforts to file with the SEC, and within 60 business days following our initial business combination
to have declared effective, a registration statement covering the issuance of the shares of Class A common stock issuable upon exercise
of the warrants and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or
are redeemed. 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, complete 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, in
which case, the number of shares of Class A common stock that you will receive upon cashless exercise will be based on a formula
subject to a maximum amount of shares equal to 0.361 shares of Class A common stock per warrant (subject to adjustment). However,
no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to
exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of
the state of the exercising holder or an exemption from registration is available. Notwithstanding the above, if our Class A common
stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of
a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants
who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and,
in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our commercially
reasonable 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 shares of Class A common stock included in the units. There may be a circumstance where an exemption from registration
exists for holders of our private placement warrants to exercise their warrants while a corresponding exemption does not exist for holders
of the public warrants included as part of units sold in our initial public offering. In such an instance, our sponsor and its permitted
transferees (which may include our directors and officers) would be able to exercise their warrants and sell the shares of Class A
common stock underlying their warrants while holders of our public warrants would not be able to exercise their warrants and sell the
underlying shares of Class A common stock. If and when the warrants become redeemable by us, we may exercise our redemption right
even if we are unable to register or qualify the underlying shares of Class A common stock for sale under all applicable state securities
laws. As a result, we may redeem warrants even if the holders are otherwise unable to exercise their warrants.
We may issue additional shares of Class A common stock or
preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business
combination. We may also issue shares of Class A common stock upon the conversion of the Class B common stock at a ratio greater
than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions described herein. Any such
issuances would dilute the interest of our stockholders and likely present other risks.
Our amended and restated certificate of incorporation authorizes the
issuance of up to 200,000,000 shares of Class A common stock, par value $0.0001 per share, and 20,000,000 shares of Class B
common stock, par value $0.0001 per share and 1,000,000 shares of undesignated preferred stock, par value $0.0001 per share. Immediately
after our initial public offering, there were 172,250,000 and 12,812,500 authorized but unissued shares of Class A and Class B
common stock available, respectively, for issuance, which amount does not take into account shares reserved for issuance upon exercise
of outstanding warrants or upon the conversion of the Class B common stock. Shares of Class B common stock are automatically
convertible into shares of our Class A common stock at the time of our initial business combination, or earlier at the option of
the holder, initially at a one-for-one ratio but subject to adjustment as set forth herein. Immediately after our initial public
offering, there were no shares of preferred stock issued and outstanding.
We may issue a substantial number of additional shares of Class A
common stock, and may issue shares of preferred stock, in order to complete our initial business combination or under an employee incentive
plan after completion of our initial business combination. We may also issue shares of Class A common stock to redeem the warrants
or upon conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination
as a result of the anti-dilution provisions described herein. However, our amended and restated certificate of incorporation provides,
among other things, that prior to our initial business combination, we may not issue additional shares of capital stock that would entitle
the holders thereof to (1) receive funds from the trust account or (2) vote pursuant to our amended and restated certificate
of incorporation on any initial business combination or any amendments to our amended and restated certificate of incorporation. The issuance
of additional shares of common or preferred stock:
| ● | may significantly dilute the equity interest of investors
in our initial public offering, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted
in the issuance of Class A shares on a greater than one-to-one basis upon conversion of the Class B common stock; |
| ● | may subordinate the rights of holders of common stock if
preferred stock is issued with rights senior to those afforded our common stock; |
| ● | could cause a change of control if a substantial number of
shares of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards,
if any, and could result in the resignation or removal of our present officers and directors; |
| ● | may have the effect of delaying or preventing a change of
control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; |
| ● | may adversely affect prevailing market prices for our units,
Class A common stock and/or warrants; and |
| ● | may not result in adjustment to the exercise price of our
warrants. |
We may issue notes or other debt securities, or otherwise incur
substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively
impact the value of our stockholders’ investment in us.
Although we have no commitments as of the date of this Annual Report
to issue any notes or other debt securities, or to otherwise incur outstanding debt following our initial public offering, we may choose
to incur substantial debt to complete our initial business combination. We have agreed that we will not incur any indebtedness unless
we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account.
As such, no issuance of debt will affect the per-share amount available for redemption from the trust account. Nevertheless, the
incurrence of debt could have a variety of negative effects, including:
| ● | default and foreclosure on our assets if our operating revenues
after an initial business combination are insufficient to repay our debt obligations; |
| ● | acceleration of our obligations to repay the indebtedness
even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial
ratios or reserves without a waiver or renegotiation of that covenant; |
| ● | our immediate payment of all principal and accrued interest,
if any, if the debt is payable on demand; |
| ● | our inability to obtain necessary additional financing if
the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding; |
| ● | our inability to pay dividends on our common stock; |
| ● | using a substantial portion of our cash flow to pay principal
and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures,
acquisitions and other general corporate purposes; |
| ● | limitations on our flexibility in planning for and reacting
to changes in our business and in the industry in which we operate; |
| ● | increased vulnerability to adverse changes in general economic,
industry and competitive conditions and adverse changes in government regulation; 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. |
We may amend the terms of the warrants in a manner that may be
adverse to holders of public warrants with the approval by the holders of at least 50% of the then outstanding public warrants. As a result,
the exercise price of your warrants could be increased, the warrants could be converted into cash or stock, the exercise period could
be shortened and the number of shares of our Class A common stock purchasable upon exercise of a warrant could be decreased, all
without your approval.
Our warrants were issued in registered form under a warrant agreement
between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of
the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the
approval by the holders of at least 50% of the then outstanding public warrants to make any change that adversely affects the interests
of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder
if holders of at least 50% of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms
of the public warrants with the consent of at least 50% of the then outstanding public warrants is unlimited, examples of such amendments
could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or stock (at a
ratio different than initially provided), shorten the exercise period or decrease the number of shares of our common stock purchasable
upon exercise of a warrant.
We may redeem your unexpired warrants prior to their exercise
at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem outstanding warrants at any time after
they become exercisable and prior to their expiration, at a price of $0.01 per warrant if, among other things, the last reported sales
price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, 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 exercise
our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities
laws. As a result, we may redeem the public warrants as set forth above even if the holders are otherwise unable to exercise the warrants.
Redemption of the outstanding warrants could force you to: (1) exercise your warrants and pay the exercise price therefor at a time
when it may be disadvantageous for you to do so; (2) sell your warrants at the then-current market price when you might otherwise
wish to hold your warrants; or (3) accept the nominal redemption price which, at the time the outstanding warrants are called for
redemption, we expect would be substantially less than the market value of your warrants.
In addition, we have the ability to redeem outstanding warrants commencing
ninety days after they become exercisable and prior to their expiration, at a price of $0.10 per warrant if, among other things, the last
reported sale price of our Class A common stock equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends,
reorganizations, recapitalizations and the like) on the trading day prior to the date on which we send the notice of redemption to the
warrant holders. In such a case, the holders will be able to exercise their warrants for cash or on a cashless basis prior to redemption.
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 shares of Class A common stock per
warrant (subject to adjustment) irrespective of the remaining life of the warrants.
None of the private placement warrants will be redeemable by us so
long as they are held by our sponsor or its permitted transferees.
Our warrants and founder shares may have an adverse effect on
the market price of our Class A common stock and make it more difficult to complete our initial business combination.
We issued warrants to purchase 9,583,333 shares of our Class A
common stock at a price of $11.50 per whole share (subject to adjustment as provided herein), as part of the units in our initial public
offering and, simultaneously with the closing of our initial public offering, we issued private placement warrants to purchase an aggregate
of 5,000,000 shares of Class A common stock. Our initial stockholders currently hold 7,187,500 founder shares. The founder shares
are convertible into shares of Class A common stock on a one-for-one basis, subject to adjustment as set forth herein. In addition,
if our sponsor, an affiliate of our sponsor or certain of our officers and directors make any working capital loans, up to $1,500,000
of such loans may be converted into warrants, at the price of $1.50 per warrant at the option of the lender. Such warrants would be identical
to the private placement warrants.
To the extent we issue shares of Class A common stock to complete
our initial business combination, the potential for the issuance of a substantial number of additional shares of Class A common stock
upon exercise of these warrants or conversion rights could make us a less attractive acquisition vehicle to a target business. Any such
issuance will increase the number of outstanding shares of our Class A common stock and reduce the value of the Class A common
stock issued to complete the business combination. Therefore, our warrants and founder shares may make it more difficult to complete a
business combination or increase the cost of acquiring the target business.
Because each unit offered in our initial public offering contained
one-third of one redeemable warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check
companies.
Each unit offered in our initial public offering contained one-third of
one redeemable warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only
whole units will trade. This is different from other offerings similar to ours whose units include one share of Class A common stock
and one whole warrant to purchase one whole share. We have established the components of the units in this way in order to reduce the
dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for
one-third of the number of shares compared to units that each contain a whole warrant to purchase one whole 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 whole warrant.
A market for our securities may not fully develop or be sustained,
which would adversely affect the liquidity and price of our securities.
The price of our securities may vary significantly due to one or more
potential business combinations and general market or economic conditions, including as a result of the COVID-19 pandemic, the invasion
of Ukraine by Russia and resulting sanctions. Furthermore, an active trading market for our securities may not fully develop or, if developed,
it may not be sustained. You may be unable to sell your securities unless a market can be fully developed and sustained.
Our warrants are
accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results.
On April 12, 2021, the
staff of the SEC (the “SEC Staff”) issued the Staff Statement on Accounting and Reporting Considerations for Warrants Issued
by Special Purpose Acquisition Companies (“SPACs”) dated April 12, 2021 (the “SEC Statement”), wherein the SEC
Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities
on the SPAC’s balance sheet as opposed to being treated as equity. Specifically, the SEC Statement focused on certain settlement
terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in
the warrant agreement governing our warrants. As a result of the SEC Statement, we reevaluated the accounting treatment of our warrants,
and pursuant to the guidance in ASC 815, Derivatives and Hedging (“ASC 815”), determined the warrants should be classified
as derivative liabilities measured at fair value on our balance sheet, with any changes in fair value to be reported each period in earnings
on our statements of operations.
As a result of the recurring
fair value measurement, our financial statements 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. If we are unable to develop and maintain an effective system of
internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may
adversely affect investor confidence in us and materially and adversely affect our business and operating results.
As described elsewhere
in this Annual Report, our management and our audit committee identified a material weakness in our internal control over financial reporting
related to our accounting and reporting of complex financial instruments, including application of ASC 480-10-S99-3A to our accounting
classification of our public shares. As a result of this material weakness, our management has concluded that our disclosure controls
and procedures were not effective as of December 31, 2021. See Part II. Item 9A. Controls and Procedures included in this Annual Report
for more details.
Previously, following
the issuance of the SEC Statement, our management and our audit committee concluded that, in light of the SEC Statement, we identified
a material weakness in our internal controls over financial reporting as it related to the accounting for our private placement warrants
and public warrants.
A material weakness is
a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility
that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely
basis.
Effective internal controls
are necessary for us to provide reliable financial reports and prevent fraud. We took measures to improve our internal control over financial
reporting, including expanding and improving our review process for complex securities and related accounting standards, as described
in Part II. Item 9A. Controls and Procedures. We continue to evaluate steps to remediate the material weakness. These remediation measures
may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.
If we identify any new
material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement
of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case,
we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable
stock exchange listing requirements, investors may lose confidence in our financial reporting and our share price may decline as a result.
We cannot assure you that any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.
We, and following
our initial business combination, the post-business combination company, may face litigation and other risks as a result of the material
weaknesses in our internal control over financial reporting.
As a result of the material
weaknesses in our internal controls over financial reporting described above, the change in classification of redeemable public shares,
the change in accounting for the warrants, and other matters raised or that may in the future be raised by the SEC, we face potential
for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims
or other claims arising from the material weaknesses in our internal control over financial reporting and the preparation of our financial
statements. As of the date of this Annual Report, we have no knowledge of any such litigation or dispute. However, we can provide no assurance
that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a
material adverse effect on our business, results of operations and financial condition or our ability to complete a Business Combination.
Risks Relating to
Our Management Team
Past performance by members of our management team and their
respective affiliates may not be indicative of future performance of an investment in us.
Information regarding performance by, or businesses associated with,
members of our management team and their respective affiliates is presented for informational purposes only. Any past experience and performance,
including related to acquisitions, of members of our management team and their respective affiliates is not a guarantee either: (1) that
we will be able to successfully identify a suitable candidate for our initial business combination; or (2) of any results with respect
to any initial business combination we may consummate. You should not rely on the historical record of our management team’s or
their affiliates’ performance. Our management has no experience in operating special purpose acquisition companies.
Our officers and directors 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 do 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 responsibilities. We do not currently have, and do not intend to have, any full-time employees
prior to the completion of our business combination. Each of our officers and directors is engaged in several other business endeavors
for which he or she may be entitled to substantial compensation and our officers and directors are not obligated to contribute any specific
number of hours per week to our affairs. Our independent directors also serve as officers and/or 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.
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. 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.
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,
accordingly, may have conflicts of interest in determining to which entity a particular business opportunity or other transaction should
be presented.
Following the completion of our initial public offering and until we
consummate our initial business combination, we have engaged in the business of identifying and combining with one or more businesses.
Our sponsor and officers and directors are, or may in the future become, affiliated with entities (such as operating companies or investment
vehicles) that are engaged in a similar business. We do not have employment contracts with our officers and directors that will limit
their ability to work at other businesses.
Each of our officers and directors presently has, and any of them in
the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities pursuant to which
such officer or director is or will be required to present a business combination opportunity to such entities. Accordingly, if any of
our officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which he or
she has fiduciary, contractual or other obligations or duties, he or she will honor these obligations and duties to present such business
combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or she determines
to present the opportunity to us. These conflicts may not be resolved in our favor and a potential target business may be presented to
another entity prior to its presentation to us. Our amended and restated certificate of incorporation provides that we renounce our interest
in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in
his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to
undertake and would otherwise be reasonable for us to pursue.
In addition, our sponsor and our officers and directors may sponsor
or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures, even prior to
us entering into a definitive agreement for our initial business combination. Any such companies, businesses or investments may present
additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such potential conflicts
would materially affect our ability to complete our initial business combination.
Our officers, directors, security holders and their respective
affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits our directors,
officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired
or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business combination
with a target business that is affiliated with our sponsor, directors or officers. We do not 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.
Members of our management team and board of directors have significant
experience as founders, board members, officers, executives or employees of other companies. Certain of those persons have been, may be,
or may become, involved in litigation, investigations or other proceedings, including related to those companies or otherwise. This may
have an adverse effect on us, which may impede our ability to consummate an initial business combination.
During the course of their careers, members of our management team
and board of directors have had significant experience as founders, board members, officers, executives or employees of other companies.
Certain of those persons have been, may be or may in the future become involved in litigation, investigations or other proceedings, including
relating to the business affairs of such companies, transactions entered into by such companies, or otherwise Any such litigation, investigations
or other proceedings could result in substantial judgments against those individuals and may divert the attention and resources of our
management team and board of directors away from identifying and selecting a target business or businesses for our initial business combination
and may negatively affect our reputation, which may impede our ability to complete an initial business combination.
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 or directors which may raise potential
conflicts of interest.
In light of the involvement of our sponsor, officers and directors
with other businesses, we may decide to acquire one or more businesses affiliated with or competitive with our sponsor, officers and directors,
and their respective affiliates. Our directors also serve as officers and/or board members for other entities. Such entities may compete
with us for business combination opportunities. Although we are not 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
and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement to obtain an opinion
from an independent investment banking firm that is a member of FINRA or from an independent accounting firm, regarding the fairness to
our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated
with our sponsor, officers or directors, potential conflicts of interest still may exist and, as a result, the terms of the business combination
may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.
Moreover, we may, at our option, pursue an affiliated joint acquisition
opportunity with our sponsor or its affiliates or with other entities to which an officer or director has a fiduciary, contractual or
other obligation or duty. Any such parties may co-invest with us in the target business at the time of our initial business combination,
or we could raise additional proceeds to complete the acquisition by making a future issuance of securities to any such parties, which
may give rise to certain conflicts of interest.
Our independent directors may decide not to enforce the indemnification
obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public
stockholders.
In the event that the proceeds in the trust account are reduced below
the lesser of: (1) $10.00 per public share; or (2) 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 amount of interest
which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification
obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor
to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf
against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their
business judgment may choose not to do so in certain instances. For example, the cost of such legal action may be deemed by the independent
directors to be too high relative to the amount recoverable or the independent directors may determine that a favorable outcome is not
likely. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account
available for distribution to our public stockholders may be reduced below $10.00 per share.
Risks Relating to the Trust Account
If third parties bring claims against us, the proceeds held in
the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share.
Our placing of funds in the trust account may not protect those funds
from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent registered
public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving
any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders,
such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against
the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as
well as claims challenging the enforceability of the waiver, in each case in order to gain 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. Making such a request of potential target businesses may make our acquisition
proposal less attractive to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field
of potential target businesses that we might pursue. 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 we are 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 have not completed our initial business combination
within the prescribed timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we will
be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years
following redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.00
per share initially held in the trust account, due to claims of such creditors.
Our sponsor has agreed that it will be liable to us if and to the extent
any claims by a third party 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: (1) $10.00 per public share; or
(2) 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 amount of interest which may be withdrawn to pay taxes, except as to any claims
by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our
indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act.
Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible
to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor, which is a newly
formed entity, has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities
of our company. Our sponsor may not have sufficient funds available to satisfy those obligations. We have not asked our sponsor 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 vendors and prospective target businesses.
The securities in which we invest the proceeds held in the trust
account could bear a negative rate of interest, which could reduce the interest income available for payment of taxes or reduce the value
of the assets held in trust such that the per-share redemption amount received by stockholders may be less than $10.00 per share.
The net proceeds of our initial public offering and certain proceeds
from the sale of the private placement warrants, in the initial amount of $287,500,000, is being held in an interest-bearing trust
account. The proceeds held in the trust account may be invested only in U.S. government treasury bills with a maturity of 185 days
or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only
in direct U.S. government treasury obligations. While short-term U.S. 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 of very low or negative yields, the amount of interest income (which we may use
to pay our taxes, if any) would be reduced. In the event that we are unable to complete our initial business combination, our public stockholders
are entitled to receive their pro-rata share of the proceeds then held in the trust account, plus any interest income (less up to
$100,000 of interest to pay dissolution expenses). If the balance of the trust account is reduced below $287,500,000 as a result of negative
interest rates, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.00
per share.
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 stockholders will be entitled to receive funds from the
trust account only upon the earliest to occur of: (1) the completion of our initial business combination, and then only in connection
with those shares of Class A common stock that such stockholder properly elected to redeem, subject to the limitations described
herein; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and
restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemptions in connection
with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by
March 19, 2023 or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination
activity; and (3) the redemption of all of our public shares if we have not completed our initial business combination by March 19,
2023, subject to applicable law and as further described herein. In addition, if we have not completed an initial business combination
within the required time period for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders
for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait
beyond the end of such period before they receive funds from our trust account. In no other circumstances will a public stockholder have
any right or interest of any kind in or to the trust account. Holders of warrants will not have any right to the proceeds held in the
trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or
warrants, potentially at a loss.
General Risk Factors
You are not entitled to protections normally afforded to investors
of many other blank check companies.
Since the net proceeds of our initial public offering and the sale
of the private placement warrants are intended to be used to complete an initial business combination with a target business that has
not been selected, we may have been deemed to be a “blank check” company under the U.S. securities laws. However, because
we had net tangible assets in excess of $5,000,000 upon the successful completion of our initial public offering and the sale of the private
placement warrants and filed a Current Report on Form 8-K, including an audited balance sheet of our company demonstrating this fact,
we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors
will not be afforded the benefits or protections of those rules. Among other things, this means we will have a longer period of time to
complete our initial business combination than do companies subject to Rule 419. Moreover, if our initial public offering were subject
to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until
the funds in the trust account were released to us in connection with our completion of our initial business combination.
If we are deemed to be an investment company under the Investment
Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it
difficult for us to complete our initial business combination.
If we are deemed to be an investment company under the Investment Company
Act, our activities may be restricted, including:
| ● | 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 with the SEC; |
| ● | adoption of a specific form of corporate structure; and |
| ● | reporting, record keeping, voting, proxy and disclosure requirements
and compliance with other rules and regulations that we are currently not subject to. |
In order not to be regulated as an investment company under the Investment
Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing,
reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment
securities” constituting more than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated
basis. Our business will be to identify and complete a business combination and thereafter to operate the post-transaction business
or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan
to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our anticipated principal activities will subject
us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in United States “government
securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less
or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest
only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other
securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring
and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity
fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. Our initial
public offering is not intended for persons who are seeking a return on investments in government securities or investment securities.
The trust account is intended as a holding place for funds pending the earliest to occur of: (i) the completion of our primary business
objective, which is a business combination; (ii) the redemption of any public shares properly submitted in connection with a stockholder
vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow
redemptions in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial
business combination by March 19, 2023 or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business
combination activity; and (iii) absent a business combination, our return of the funds held in the trust account to our public stockholders
as part of our redemption of the public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to
the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory
burdens would require additional expenses for which we have not allotted funds and may hinder our ability to consummate our initial business combination.
If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share
on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders 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 stockholders may be less
than $10.00 per share” and other risk factors herein.
Changes in laws or regulations, or a failure to comply with any
laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination,
and results of operations.
We are subject to laws and regulations enacted by national, regional
and local governments. In particular, we are required to comply with certain SEC and other legal requirements. Compliance with, and monitoring
of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and
application may also change from time to time and those changes could have a material adverse effect on our business, investments and
results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a
material adverse effect on our business, including our ability to negotiate and complete our initial business combination, and results
of operations.
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 attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations
regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding
advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result,
our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to
five years, although circumstances could cause us to lose that status earlier, including if the market value of our common stock held
by non-affiliates exceeds $700 million as of the end of any second quarter of a fiscal year, in which case we would no longer
be an emerging growth company as of the end of such fiscal year. 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 common stock held by non-affiliates exceeds $250 million as
of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during such completed
fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the end of that year’s
second fiscal quarter. 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.