Item
1. Business
BUSINESS
Overview
We are a newly organized blank check company incorporated in
November 2020 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share
purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this report
as our initial business combination.
We intend to focus our efforts on seeking and completing an
initial business combination with a company that has an enterprise value of between $1.0 billion and $3.0 billion, although a
target entity with a smaller or larger enterprise value may be considered. While we may pursue an acquisition opportunity in any
business industry or sector, we intend to capitalize on the ability of our combined team to identify, acquire and add value to
a business following the initial business combination. The industry sectors that we intend to target, many of which are undergoing
technology-driven transformation, include consumer, food, branded products, e-commerce and retail disruptors and consumerization
of healthcare, as well as certain service sectors and the technology underlying and driving changes across these sectors and related
industries. We believe that the characteristics and capabilities of our combined team will make us an attractive partner to potential
target businesses, enhance our ability to complete a successful business combination and bring value to the business post-business
combination. We believe these capabilities were demonstrated in our combined team’s successful sourcing and completion of
GPAC’s merger with Purple, as well as our significant work with Purple since the closing of the merger.
The company brings together three elements that we believe
will create a competitive advantage which differentiates us from other acquisition vehicles in the market, and will significantly
improve our chances of completing a successful business combination.
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Proven executive
team, led by our Chairman and CEO Paul J. Zepf;
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Value-added strategic
partnership with XRC Labs, as well as a deep “ecosystem” of executive and
corporate relationships and resources; and
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A better aligned,
more efficient structure.
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We believe the combined team possesses an ideal mix of core
characteristics for a special purpose acquisition corporation. This combined team includes what we view to be successful dealmakers
or operators, with experience across multiple deal types, including complicated special situations and as senior operators across
a variety of businesses and industries. This combined team has demonstrable experience and valuable contracts across a wide range
of industries and business lines, which we believe will allow us to source deals that other investors could not. The combined
team also has what we believe is a longstanding track record of value creation, both as investors and for investors, across the
gamut of private equity or direct public and private company investing. Our network and current affiliations across the team will
allow us to lean heavily on an existing infrastructure of resources that will assist in due diligence, underwriting and ultimately
structuring an acquisition. We may also leverage our Advisory Group as needed.
With respect to the foregoing examples, past performance by
our management team or sponsor team is not a guarantee either (i) of success with respect to any business combination we may consummate
or (ii) that we will be able to locate a suitable candidate for our initial business combination. Furthermore, in considering
any past performance information contained herein, you should bear in mind that actual returns depend on, among other factors,
future operating results, the value of the investments and market conditions at the time of disposition, any related transaction
costs and the timing and manner of sale, all of which may differ from the assumptions on which the overall performance of any
prior investments are based.
Our Management Team
Paul J. Zepf, Chief Executive Officer and Chairman
Mr. Zepf serves as our Chief Executive Officer and as Chairman
of our board of directors. From February 2018 through July 2020, Mr. Zepf was a senior investment professional at TowerBrook Capital
Partners (“TowerBrook”), first as a Venture Partner and then as a Managing Director. Currently, he is a Management
Advisory Board member at TowerBrook. TowerBrook is a private equity management firm with over $13 billion in assets under management,
investing in both control and non-control deals across multiple industry sectors. From the closing of GPAC’s merger with
Purple in February 2018 until August 2020, Mr. Zepf was a non-voting observer to Purple’s board of directors and each of
its board committees. From August 2020, he has been a member and, since December 1, 2020, has been the non-executive Chairperson,
of Purple’s board of directors. Prior thereto, from June 2015 to February 2018, he was Chief Executive Officer and a director
of GPAC. From February 2014 to June 2015, Mr. Zepf was a Managing Director and Head of Strategic Initiatives at Golub Capital,
a direct lender and credit asset manager, with more than $30 billion in capital under management. Prior to joining Golub Capital,
from March 2005 to February 2014, Mr. Zepf was a managing principal of Corporate Partners, a Lazard-sponsored private equity fund.
Following the February 2009 spin-off of Corporate Partners from Lazard, Mr. Zepf also served as managing principal of Corporate
Partners Management LLC until February 2014. Prior to that, from 2001 to 2009, he was also co-head of Lazard North American Private
Equity, and, from 2001 to 2005, a managing director of Lazard LLC. Mr. Zepf was a managing principal of Lazard Alternative Investments
from 2005 to 2009 and of Lazard Capital Partners from 2001 to 2009. Previously, from 1998 to 2001, Mr. Zepf was a managing director
of Corporate Partners I and of Centre Partners, a middle market private equity firm. He started his career in the Merchant Banking
Department at Morgan Stanley & Co. in 1987. Mr. Zepf has a B.A. in Economics from the University of Note Dame, where he graduated
summa cum laude and Phi Beta Kappa.
David Apseloff, Chief Financial Officer
Mr. Apseloff serves as our Chief Financial Officer (“CFO”).
Mr. Apseloff is an experienced CFO who has extensive expertise in working with middle market companies. Mr. Apseloff currently
serves on the board of directors of CitySwitch Tower Holdings, LLC and Aqua Terra Water Management, L.P. and serves part-time
as the CFO of Agile Cold Chain Solutions LLC. Mr. Apseloff previously served on the board of Flagship Communities, LLC from July
2018 until they completed their IPO in October 2020. Mr. Apseloff was formerly CFO of Aqua Terra from March 2017 to February 2018.
From 2015 to 2016, he was the CFO and Executive Vice President of Agro Merchants Group, a global provider of cold chain logistic
services, after they acquired Nordic Cold Storage Holdings LLC, where he served as CFO from 2011 to 2015. Previously in his career,
Mr. Apseloff held CFO positions with a variety of private equity backed companies, including oil and gas services, distribution
of RV accessories, healthcare services, industrial and manufacturing businesses. These companies were backed by sponsors such
as Greenbriar Equity Group, Centre Partners Management LLC, Bregal Partners, Oaktree Capital and American Infrastructure Funds.
Mr. Apseloff started his career at Arthur Andersen & Co. and was a senior staff accountant in the Small Business Audit Division.
Mr. Apseloff is a Certified Public Accountant and holds a Bachelor’s of Science in Accounting from the University of Florida.
Our Board of Directors
We are likely to be actively involved in the strategy and operations
of our target companies (although there can be no assurances that we will be) and have assembled a number of seasoned corporate
executives and professional advisors to serve as independent directors on our board, alongside Mr. Zepf. These executives have
been chosen as directors for their extensive sector and executive experience in managing successful companies. In addition to
providing us with strategic insights, which include in-depth knowledge of industry dynamics, competition and operational capabilities,
our independent directors will provide access to their broad networks of operating executives and other resources.
Pano Anthos
Mr. Anthos, who will be Vice Chairman of our board of directors,
is the founder and managing director of XRC Labs and Funds, one of the leading innovation accelerators focused on the consumer
goods and retail markets. He is regularly engaged as a speaker at leading industry and financial conferences including NRF, Shoptalk
and NACDS on the industry side and UBS, RBC, Cowen, Oppenheimer and Jefferies on the financial side. Mr. Anthos has over 30 years
of technology CEO and founder experience spanning supply chain, gaming and technology infrastructure, having built new businesses
in B2B and B2C markets across Web, social, mobile and gaming platforms. In addition to his responsibilities at XRC Labs, Mr. Anthos
has been a board member of Purple since its merger with GPAC in February 2018. Prior thereto, from June 2015 to February 2018,
he served as a director of GPAC. He was also a partner of Eaglepoint, running their digital transformation practice. Prior to
GPAC, Mr. Anthos co-founded GatherEducation in November 2012, which is a virtual reality classroom platform that recreates the
physical classroom online to enable teachers to teach students on low bandwidth, 3G networks. From September 2010 to October 2011,
Mr. Anthos founded and ran Guided Launch, an advisory firm that incubated startups in the media and advertising spaces. From 1984
to 2010, Mr. Anthos co-founded several successful businesses including Hangout Industries, a virtual reality gaming platform;
Pantero, a semantic web integration platform; and Clearcross, a global logistics platform. Mr. Anthos also served on the board
of directors of FCA International. Mr. Anthos holds an MIA from Columbia University, where he was an International Fellow, and
holds a BA from the University of Delaware.
Andrew Cook
Mr. Cook is currently a director and chair of OmegaCat Reinsurance
Ltd, a director of Aspida Re (Bermuda) Limited and a director of Atlas Arteria International Limited (ASX: ALX). He was
formerly the Chief Financial Officer of GPAC from June 2015 to February 2018. From September 2013 to July 2020, he was a director
and Audit Committee Chair of Blue Capital Reinsurance Holdings Limited (NYSE: BCRH), a Bermuda-based ILS reinsurance company.
In September 2019, Mr. Cook was named Chief Executive Officer of Grey Castle, a Bermuda-based entity that participated in the
life reinsurance run-off space until its sale in May 2020. Mr. Cook previously served as a director and Investment Committee Chair
of Grey Castle. From October 2010 to June 2013 he served as President of Alterra Bermuda Ltd., in addition to his position as
Executive Vice President–Business Development, which he held from May 2010. Previously, Mr. Cook served as Chief Financial
Officer of Harbor Point Ltd. from September 2006 until its merger with Max Capital Corp. in May 2010, the combination forming
Alterra Capital Holdings. He also served as Deputy Chairman, President and Chief Financial Officer of Harbor Point Re Limited.
From 2001 to 2006, Mr. Cook was the founding Chief Financial Officer of Axis Capital Holdings Ltd. From January 2001 until November
2001, he served as Senior Vice President and Chief Financial Officer of Mutual Risk Management. From 1993 to 1999, he served as
Senior Vice President and Chief Financial Officer of LaSalle Re Holdings, Ltd. Mr. Cook qualified as a Canadian Chartered Professional
Accountant in 1986, having started his career in Toronto with Ernst & Young. He received a B.A. in finance and accounting
from the University of Western Ontario in 1983.
Gary DiCamillo
Mr. DiCamillo served as vice chairman of GPAC’s board
of directors from its inception until February 2018, and since GPAC’s merger with Purple in February 2018 has been a member
of the board of directors of Purple, its lead independent director and chairman of the audit committee. From June 2017 to January
2020, he served as President and Chief Executive Officer of Universal Trailer Corporation, a manufacturer of leading horse, livestock
and utility trailer brands. Since January 2010, Mr. DiCamillo has been the managing partner of Eaglepoint, a privately held advisor
to boards and chief executive officers in matters of strategy, organization and the management of business transition issues.
Prior to that, Mr. DiCamillo was the president and chief executive officer of Advantage Resourcing, a group of privately held
technical, professional and commercial staffing companies based in Dedham, Massachusetts, from 2002 until August 2009. Previously,
he was chairman and chief executive officer at the Polaroid Corporation from 1995 to 2002. He also has served as president of
Worldwide Power Tools and Accessories at Black & Decker Corporation from 1986 to 1995 and before that as vice president/general
manager for Culligan U.S.A., a division of Beatrice Corporation. He previously served as a director of Pella Corporation (from
1993 to 2007, and 2010 to 2018), the Sheridan Group, Inc. (from 1989 to 2017), and previously served as a director, as well as
Lead Director, of 3Com Corporation (from 2000 to 2009). He began his career in brand management at Procter & Gamble Co., followed
by several years as a manager at McKinsey & Company. Mr. DiCamillo has served as a director of Whirlpool Corporation (NYSE:WHR)
since 1997 and served as chairman of its audit committee from April 2013 to April 2017. He serves on the boards of trustees at
Rensselaer Polytechnic Institute and the Museum of Science in Boston, USA and previously served as a board member of Berkshire
Manufactured Products, Inc. (where he was Chairman), Select Staffing and the Massachusetts Business Roundtable. Mr. DiCamillo
is a graduate of Harvard Business School where he earned an MBA. He also holds a Bachelor of Science degree in Chemical Engineering
from Rensselaer Polytechnic Institute.
Claudia Hollingsworth
Ms. Hollingsworth has been the Chief Executive Officer of i2CEO,
a boutique advisory company that advises companies in both the public and private sectors on business acceleration, transition,
strategy, leadership and organizational maturity, since November 2016. Ms. Hollingsworth was appointed to Purple’s board
of directors immediately following the closing of its business combination with GPAC and currently serves as chair of Purple’s
human resources/compensation committee and as a member of its audit committee. Ms. Hollingsworth has 30 years of experience in
consumer products, having managed manufacturers, wholesalers and multi-channel retail businesses. From July 2012 to October 2016,
she served as Chief Executive Officer of Gump’s San Francisco, a luxury home furnishing, apparel and jewelry multi-channel
retailer. Gump’s San Francisco later filed a petition under Chapter 11 of the U.S. Bankruptcy Code in August 2018. From
May 2011 to June 2012, Ms. Hollingsworth also served as Chief Executive Officer of i2CEO. From July 2007 to May 2011, Ms. Hollingsworth
served as president of H.D. Buttercup, a furniture marketplace. From March 2004 to July 2007, she served as CEO and president
of GBH, Inc., a boutique jewelry manufacturing company with factories in France and Peru. Prior to that, Ms. Hollingsworth served
as president and director of Michael Anthony Jewelers. Earlier in her career, she held various executive management positions
with M.Z. Berger and OroAmerica. Ms. Hollingsworth currently serves on the board of Destinations by Design, a premier destination
management company. She also serves on the board of Atlas Corps, an international network of social sector leaders and organizations.
She is a member of the National Association of Corporate Directors and is recognized as a Board Leadership Fellow.
William Kerr
Mr. Kerr is a Partner of Eaglepoint. He served as Chairman
of GPAC from 2015 to 2018. From January 2010 through January 2013, Mr. Kerr served as Chief Executive Officer of Arbitron, Inc.,
a media and marketing services firm. From 1991 until January 2010, Mr. Kerr served as Executive Vice President, then as President,
Chairman and Chief Executive Officer, and finally as non-executive chairman, of Meredith Corporation (NYSE: MDP), a diversified
media company. Mr. Kerr currently serves on the board of directors Questex Holdings Group and as a member of the Executive Board
of MidOcean Partners. He has previously been on the board of directors of the Interpublic Group of Companies, Inc. (NYSE:IPG),
Whirlpool Corporation (NYSE:WHR), Principal Financial Group, Inc. (NASDAQ:PFG), Penton Media and StorageTek. Earlier in his career,
he was a consultant at McKinsey and a Vice President of The New York Times Company. Mr. Kerr has a B.A. from the University of
Washington, a B.A. and an M.A. from Oxford University (where he was a Rhodes Scholar), and an M.A. and an M.B.A. from Harvard
University.
James McCann
Mr.
McCann has been the Chairman and CEO of Food Retail Ventures LLC since October 2016,
a venture capital company funded by his family office that invests in early stage companies
across the food and retail technology sectors. He currently serves as non-executive Chairman
of Green Rabbit Holdings Inc.., as a director of Fetch Rewards Inc., Flashfood Inc. and
Atlas Bar, Inc., Afresh Technologies Inc. and as a board observer at Foodmaven Corporation.
Prior to founding Food Retail Ventures LLC, from 2011 to 2016, Mr. McCann was on the
Management Board of AEX listed Royal Ahold NV, initially as the Group Chief Commercial
Officer and later as the Group COO and CEO of Ahold USA. He played a key role in the
EUR54 billion merger of Royal Ahold NV with Belgian listed Delhaize Group. Prior to Ahold,
from 2010 to 2011, Mr. McCann was on the Group Executive Committee at the Paris-listed
Carrefour Group where he was CEO of the French retail business. Prior to Carrefour, Mr.
McCann was a senior executive at London-listed Tesco PLC, from 2006 to 2009 as CEO of
Tesco Hungary, from 2004 to 2006 as CEO of Tesco Malaysia and from 2003 to 2004 as COO
of Tesco Poland. Prior to Tesco, Mr. McCann held roles of increasing seniority at Shell
PLC, Mars, Incorporated and Sainsbury’s PLC. Mr. McCann holds a BSc in Management
Sciences from Manchester University UK (UMIST) having graduated with first class honors
in 1992. Mr. McCann is a Trustee at Dana Farber Cancer Center in Boston, where he is
the Chairman of the philanthropy committee and is on the governance and executive committees.
Jay Ripley
Jay Ripley is a co-founder and board member of Sequel Youth
and Family Services (“Sequel”), a national operator of behavioral health services in the United States. He sold a
majority interest in Sequel to a private equity firm in 2017. Mr. Ripley also serves as Chairman of the Alaris Equity Partners
Income Trust board of trustees. Alaris is a publicly-traded investment company located in Calgary, Alberta. Additionally, Mr.
Ripley was a founding partner of and serves as an advisory board member to CYwP Funds, a group of private equity funds in the
Washington, DC area that invest in operating businesses and real estate across the U.S. Previously, Mr. Ripley co-founded and
was the principal owner of BGR, “The Burger Joint,” an upscale, fast casual gourmet burger restaurant concept which
he sold in March 2015. He also was a founding stockholder of Youth Services International and served as its President and Chief
Operating Officer as well as its CFO. Additionally, he has served as President and CEO of Precision Auto Care, a worldwide franchiser
of automotive service centers, and was an executive with Jiffy Lube, the leading franchiser of quick lube centers in America.
Mr. Ripley began his career with Ernst & Young, CPAs in Baltimore, MD. Mr. Ripley is a summa cum laude graduate of the University
of Baltimore and a licensed CPA. He is a member of both CEO (Chief Executives Organization) and YPO (Young Presidents’ Organization),
serves on the University of Baltimore President’s Advisory Council, and is a partner in Sageworth, a shared family office
that serves its members and clients around the world.
Our Advisory Group
In addition to our management team and board of directors,
we have assembled an experienced team of strategic partners and individuals (our “Advisory Group”) to assist in the
sourcing, evaluation, due diligence, deal execution, and post-closing strategic involvement with potential business combination
partners. The members of the Advisory Group also may invest in our sponsor. We believe the operational expertise of the Advisory
Group is a differentiating element of our approach, which gives us the opportunity to pursue potential business combination targets
in several industry sectors where we have expertise, and increases our likelihood of finding and completing a suitable business
combination. The Advisory Group consists of individuals with specific experience in a broad range of industry sectors, including
technology, retail, consumer goods, industrials and the food & hospitality sectors because we believe that examining acquisition
opportunities across all of these sectors increases the likelihood of finding an acquisition target that will lead to shareholder
value creation. In addition, members of the Advisory Group include professionals who have been successful chief executive officers,
senior executives and board members of public and private companies, and we believe they will enhance our value proposition to
potential business combination partners given their collective expertise, operational and strategic capabilities and track record
in their respective sectors. Members of the Advisory Group also may be managers of pools of capital, and may be helpful in providing
or obtaining financing, if such financing is necessary, in connection with our initial business combination, although there can
be no assurance that they will do so. The Advisory Group has experience in:
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Operating companies,
setting and changing strategies and capital allocation and identifying, monitoring and
recruiting world-class talent;
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Acquiring and
integrating companies;
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Advising businesses
in their digital transformation efforts and helping them grow in the digital age;
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Embarking on corporate
turnarounds and implementing transformational long-term strategies; and
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Developing and
growing companies, both organically and through acquisitions and strategic transactions
and expanding the product range and geographic footprint of businesses.
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The members of the Advisory Group include the following individuals:
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David Chamberlain: David
Chamberlain is currently a managing partner at Eaglepoint Advisors. He previously served
as CEO of Stride Rite Corporation, Genesco and Shaklee Corporation and held senior management
positions at Nabisco Brands and Quaker Oats.
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Mark Drever: Mark
Drever is currently CEO of Organic Girl and is a member of the board of directors of
Musco Family Olive Company. He previously served as president of Fresh Express and was
a member of the board of directors of Oberto Brands.
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Neal D. Goldman: Neal
Goldman is a partner at Eaglepoint Advisors. He previously served as chief legal and
regulatory officer at Skype and chief administrative and legal officer at 3Com and Polaroid.
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Adam Gray: Adam
Gray is a managing partner and co-founder of Coliseum Capital Management and also serves
on the board of Purple. He is on the board of directors at Pas Group Limited and previously
held board positions at Blue Bird Corporation, DEI Holding and Benihana.
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➤ Michael Johnston: Michael
Johnston is currently a partner at Eaglepoint Advisors and serves on the board of directors at Whirpool Corporation, Dover Corp.
and Armstrong World Industries. He previously was CEO of Visteon Corporation and held leadership roles at Johnson Controls.
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Joseph B. Megibow:
Joseph Megibow has served as Chief Executive Officer of Purple
since October 2018. He previously held senior management roles Joyus, Inc., American
Eagle Outfitters and Expedia.
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Terry Pearce: Terry
Pearce is a co-founder of Purple and served as its co-Director of Research & Development
and Chairman of the Board. Prior to founding Purple, Mr. Pearce was a manager of various
technology companies owned by him and his brother Tony Pearce, including EdiZONE, LLC,
focused on developing advanced cushioning technology.
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Jeffrey Weiss: Jeffrey
Weiss is currently the CEO of Smart Financial and Loanmart, two Fortress Investment Group
portfolio companies. He previously served as founder and CEO of Cloverdale Press and
was the founding editor of Country Living Magazine.
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Strategic Partner
XRC Labs was formed by our director, Pano Anthos, in 2015 in
order to disrupt the consumer goods and retail industries by investing in 20+ early stage startups per year. XRC’s mission
is to foster companies and products that innovate the face of consumer goods, ecommerce, retail and related sectors in a rapidly
changing marketplace. To support these innovation and startups, XRC has built an ecosystem of nine major corporate and over 200
affiliate partners, ten fund advisors, 300 industry mentors, and 3 national industry trade organizations.
XRC’s corporate partners represent a leading mix of brands,
retailers and third party providers. CVS Health, MasterCard, Intel, TJX, Accenture, Lowes, Estee Lauder and GS1 US all financially
support XRC to provide them with access to future innovation, connections through the network, new business models and thought
leadership. Regularly, these partners pilot our new programs or companies and provide access to leading brands and retailers.
XRC’s industry mentors include former CEO’s and
executives of major brands across the ecommerce, tech, payments and retail sectors. This deep bench of successful entrepreneurs
and industry specialists provides us with access to all of the resources that make disruptive companies successful, including
branding, growth development, product development, etc.
We believe that the value-added resources from XRC’s
network, including the corporate sponsors, will provide us with a unique and differentiated ability to source opportunities, will
enhance our attractiveness to potential merger targets, and will provide us with a greater ability to add value to the target
company post-merger. XRC and its partners’ technology and “convergence” experience should be applicable across
multiple industry sectors, including but not limited to technology, consumer, retail, food, healthcare and many types of services
and production businesses.
Business Strategy
Our strategy is to build on three key pillars: an experienced
management team led by Mr. Zepf; our value-added partners in our sponsor, XRC and our advisory group members; and a next generation,
more efficient and aligned SPAC vehicle.
Our sponsor team’s expertise in consumer, branded products,
technology, food, e-commerce and retail, and healthcare and multiple service industries, many of which are undergoing technology-driven
transformation, positions us well to source, execute and add value to companies in these sectors. Across these sectors, we intend
to leverage our experience with digital “convergence” and disruption, supply chain management and product development,
as well as our demonstrated ability to work with companies to drive profitable growth.
We believe the combined team possesses the core characteristics
of an ideal team for a special purpose acquisition corporation. This combined team is a mix of what we view to be successful dealmakers
or operators, with experience across multiple deal types, including complicated special situations and as senior operators across
a variety of businesses and industries. This combined team has built a meaningful proprietary deal-sourcing network that should
allow us to source deals that other investors could not. Through these endeavors, this combined team has what we believe is a
long standing track record of value creation, both as investors and for investors, across the gamut of public and private company
investing. Our network and current affiliations across the team will allow us to lean heavily on an existing infrastructure of
resources that will assist in due diligence, underwriting and ultimately structuring an acquisition. We also intend to leverage
our network of third party advisors as needed.
Source: Our sourcing and acquisition
selection process will leverage our sponsor group’s deep, broad and trusted network of industry, private equity sponsor,
investment banking and lending community relationships, as well as their relationships with family-led and founder-led private
companies. Our supportive value-added approach, and ability to work with strategic partners within our network, such as XRC’s
corporate sponsors, should make us an attractive merger partner to many potential merger targets. Furthermore, our team’s
success with GPAC will likely further differentiate us from the other vehicles in the market, the majority of which are raised
by sponsors who have no prior experience with SPAC transactions. We also believe this should provide us with a breadth of business
combination opportunities, typically outside of a broad investment banking auction process. Finally, we believe that our less
dilutive and more aligned SPAC structure will make us an attractive merger partner, thereby enhancing our sourcing capabilities.
Execute: We have extensive deal
execution experience and capabilities. In addition to leading the completion of GPAC’s merger with Purple, our CEO, Mr.
Zepf, has more than 30 years of experience executing negotiated private and public company investments, mergers and acquisitions,
as well as initial public offerings, including while at Morgan Stanley, Lazard, Golub Capital and TowerBrook. Mr. Zepf’s
execution experience is complemented by directors Mr. Anthos and Mr. DiCamillo, among others. Mr. Anthos has extensive experience
investing in consumer goods and retail companies via his leadership at XRC Labs and Funds, as well as his role at Eaglepoint as
the head of digital transformation. Mr. DiCamillo has been the managing partner of Eaglepoint Advisors, LLC, a privately held
advisor to boards and chief executive officers in matters of strategy, organization and the management of business transition
issues. Collectively, our leadership team will draw upon several decades of execution experience across a broad range of industries
and markets.
Operate and Grow: The experience
and capabilities of our combined team should allow us to drive growth in shareholder value following the business combination.
The prior experience of the members of our combined team includes working with companies and increasing value for all stakeholders
at the senior management level, as consultants, as board members and as constructive minority stake shareholders. Additionally,
we intend to seek ways to work with XRC’s corporate partners to drive growth in the target company post-business combination.
With respect to the foregoing examples, past performance by
our management team or sponsor team is not a guarantee either (i) of success with respect to any business combination we may consummate
or (ii) that we will be able to locate a suitable candidate for our initial business combination. Furthermore, in considering
any past performance information contained herein, you should bear in mind that actual returns depend on, among other factors,
future operating results, the value of the investments and market conditions at the time of disposition, any related transaction
costs and the timing and manner of sale, all of which may differ from the assumptions on which the overall performance of any
prior investments are based.
Acquisition Criteria
We will target business combination opportunities that align
with our strategic insights, focus, capabilities and network. Consistent with our business strategy, we have identified the following
general criteria and guidelines that we believe are important in evaluating prospective target businesses. While we will use these
criteria and guidelines in evaluating acquisition opportunities, we may decide to enter into our initial business combination
with a target business that does not meet these criteria and guidelines.
We intend to seek to acquire companies exhibiting one or more
of the characteristics below:
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Value-Added Capital
for Growth and/or Consolidation Opportunities: Our combined team
has significant and successful experience in investing in and working with companies
that are achieving rapid and profitable growth through (a) organic growth initiatives;
and/or (b) strategic consolidation opportunities. We will target companies whose owners
may not have the requisite capital or experience to take advantage of compelling corporate
development opportunities. Our combined team also has experience expanding company’s
markets and operations outside of the United States, and we believe our cross-border
capabilities could be attractive to many potential middle market business combination
targets.
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Operational Improvements: Our
combined team has significant and successful experience in investing in and working with
companies where there is an opportunity to effect meaningful operational improvements.
Members of our management team and sponsor team have worked with those types of companies
as investors, board members, consultants and senior management. We intend to tailor our
approach to working with the target company’s management team and owners to fit
the unique challenges and opportunities they face. Our combined team has the versatility
and flexibility to allow us to provide strategic guidance as board members and consultants
or members take on direct senior leadership roles to drive operational improvements at
the target company.
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“Partnership”
Sale: We may seek to acquire one or more companies with a current
owner, whether founder-owned or family-owned or institutionally owned (private equity
or venture capital), who would like to retain a meaningful stake in the company to preserve
and enhance potential upside. As a provider of public equity capital, we are well positioned
to provide liquidity and a long-term capital solution, and expect that potential merger
targets and partners would view having our combined team as significant, supportive shareholders
with a successful SPAC track record as a positive factor. We also could be an attractive
financial and operating partner for a private equity firm that sees compelling acquisition
opportunities but may be already fully invested.
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Technology-Driven
Change and Opportunity: Many companies in our targeted industry
sectors have significant challenges and opportunities resulting from rapid technology-driven
change. Our combined team has deep experience in working with companies to mitigate the
risks and optimize the opportunities from technology-driven change. We believe these
capabilities will make us an attractive merger partner.
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Deleveraging: Our
combined team’s extensive relationships with lenders and private equity firms,
as well as their prior experience in making deleveraging investments, should position
us well to source and execute a recapitalizing acquisition. As opposed to many distressed
debt funds/investors, we believe we would be a preferred refinancing/de-leveraging solution
to owners and management teams of middle-market companies.
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A SPAC Business
Combination as an Advantageous Liquidity Alternative: At times,
the IPO market is uncertain or closed, so an acquisition by us could be a better means
of going public for a target company. Further, a target company’s owners and/or
management might not have experience going public or as a public company and could view
our management team and sponsor experience with a successful SPAC track record as an
important value-added factor. Additionally, certain businesses may not be an ideal candidate
for a mergers and acquisitions auction process, so a negotiated acquisition by us could
offer a better means of providing liquidity for the target business’s current owners.
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These criteria are not intended to be exhaustive. We may or
may not consummate our business combination with a company that exhibits all or any of the qualities above. 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 sponsors and management team may deem relevant. In the event that
we decide to enter into a 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 shareholder communications related to our initial
business combination, which, as discussed in this report, would be in the form of proxy solicitation or tender offer materials,
as applicable, that we would file with the U.S. Securities and Exchange Commission (the “SEC”). Although we intend
to focus on identifying business combination candidates in sectors including the consumer, food, branded products, e-commerce
and retail disruptors and consumerization of healthcare, as well as certain service sectors and the technology underlying and
driving changes across these sectors and related industries described above, we will consider a business combination candidate
outside of these industries if we determine that such candidate offers an attractive opportunity for our company.
We are not prohibited from pursuing an initial business combination
with a company that is affiliated with members of our management team or their affiliates. In the event we seek to complete our
initial business combination with a company that is affiliated with our management team or their affiliates, we, or a committee
of independent directors, will obtain an opinion from an independent accounting firm or an independent investment banking firm
which is a member of the Financial Industry Regulatory Authority, or FINRA, that our initial business combination is fair to our
company from a financial point of view.
Initial Business Combination
So long as our securities are then listed on Nasdaq, our initial
business combination must occur with one or more target businesses that together have an aggregate fair market value of at least
80% of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest
earned on the trust account) at the time of signing a definitive agreement in connection with our initial business combination.
We refer to this as the 80% of fair market value test. If our securities are no longer listed on Nasdaq, we will not be obligated
to satisfy the 80% of fair market value test. Our board of directors will make the determination as to the fair market value of
our initial business combination. The fair market value of the target or targets will be determined by our board of directors,
based upon one or more standards generally accepted by the financial community (such as actual and potential sales, earnings,
cash flow and/or book value.) Even though our board of directors will rely on generally accepted standards, our board of directors
will have discretion to select the standards employed. In addition, the application of the standards generally involves a substantial
degree of judgment. Accordingly, investors will be relying on the business judgment of the board of directors in evaluating the
fair market value of the target or targets. The proxy solicitation materials or tender offer documents used by us in connection
with any proposed initial business combination will provide public shareholders with our analysis of our satisfaction of the 80%
of fair market value test, as well as the basis for our determinations. If our board is not able to determine the fair market
value of the target business independently, we will obtain an opinion from an independent investment banking firm or an independent
valuation or appraisal firm with respect to the satisfaction of such criteria. While we consider it unlikely that our board will
be unable to make an independent determination of the fair market value of a target business, it may be unable to do so if: (1) our
board is less familiar or inexperienced with the target company’s business, (2) there is a significant amount of uncertainty
as to the value of the company’s assets or prospects, including if such company is at an early stage of development, operations
or growth, or (3) if the anticipated transaction involves a complex financial analysis or other specialized skills, and our board
determines that outside expertise would be helpful or necessary in conducting such analysis. Since any opinion, if obtained, would
merely state that the fair market value of the target business meets the 80% of fair market value test, unless such opinion includes
material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that
copies of such opinion would be distributed to our shareholders. However, if required under applicable law, any proxy statement
that we deliver to shareholders and file with the SEC in connection with a proposed transaction will include such opinion.
We anticipate structuring our initial business combination
so that the post-business combination company in which our public shareholders own shares will own or acquire 100% of the equity
interests or assets of the target business. We may, however, structure our initial business combination such that the post-business
combination company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain
objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination
if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise
acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under
the Investment Company Act of 1940, as amended (the “Investment Company Act”). Even if the post-business combination
company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination
may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target
and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares
in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire
a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders
immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our
initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned
or acquired by the post-business combination company, the portion of such business or businesses that is owned or acquired is
what will be valued for purposes of the 80% of fair market value test. If the business combination involves more than one target
business, the 80% of fair market value test will be based on the aggregate value of all of the target businesses. In addition,
we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of
our sponsor. If our securities are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing
80% of fair market value test.
To the extent we effect our initial business combination with
a company or business that may be financially unstable or in its early stages of development or growth, we may be affected by
numerous risks inherent in such company or business. Although our management team will endeavor to evaluate the risks inherent
in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
The time required to select and evaluate a target business
and to structure and complete our initial business combination, and the costs associated with this process, are not currently
ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective
target business with which our initial business combination is not ultimately completed will result in our incurring losses and
will reduce the funds we can use to complete another business combination
Acquisition Process
In evaluating a potential target business, we expect to conduct
a due diligence review to seek to determine a company’s quality and its intrinsic value. That due diligence review may include,
among other things, financial statement analysis, detailed document reviews, multiple meetings with management (which may be virtual
or in person), consultations with relevant industry experts, competitors, customers and suppliers, as well as a review of additional
information that we will seek to obtain as part of our analysis of a target company.
We are not prohibited from pursuing an initial business combination
with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business
combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors,
will obtain an opinion from an independent investment banking firm or an independent accounting firm that our initial business
combination is fair to our company from a financial point of view.
Members of our management team, including our officers and
directors, directly or indirectly own our securities and, accordingly, may have a conflict of interest in determining whether
a particular target company is an appropriate business with which to effectuate our initial business combination. Each of our
officers and directors, as well as management team, may have a conflict of interest with respect to evaluating a particular business
combination if the retention or resignation of any such officers, directors and management team members was included by a target
business as a condition to any agreement with respect to such business combination.
Each of our directors and officers presently has, and any of
them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer
or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers or directors
becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary
or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to
such entity. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will
materially affect our ability to complete our initial business combination.
Our amended and restated memorandum and articles of association
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, and to the
extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.
Our Founder, sponsor, officers and directors may sponsor, form
or participate in other blank check companies similar to ours during the period in which we are seeking an initial business combination.
Any such companies may present additional conflicts of interest in pursuing an acquisition target, particularly in the event there
is overlap among investment mandates. However, we do not currently expect that any such other blank check company would materially
affect our ability to complete our initial business combination. In addition, our Founder, sponsor, officers and directors are
not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating
management time among various business activities, including identifying potential business combinations and monitoring the related
due diligence.
Our distributable redeemable warrants provide our public shareholders
with an incentive not to redeem their Class A ordinary shares in connection with our initial business combination. Public shareholders
who choose to redeem their shares will lose the right to receive distributable redeemable warrants. Public shareholders who choose
not to redeem their shares will receive one-sixth of a distributable redeemable warrant per public share they hold (up to a total
of 5,000,000 distributable redeemable warrants assuming that no public shareholders redeem their Class A ordinary shares). We
believe this structure may lead to a lower level of redemptions.
Status as a Public Company
We believe our structure will make us an attractive business
combination partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional
initial public offering through a merger or other business combination with us. In a business combination transaction with us,
the owners of the target business may, for example, exchange their shares of stock, shares or other equity interests in the target
business for our Class A ordinary shares (or shares of a new holding company) or for a combination of our Class A ordinary shares
and cash, allowing us to tailor the consideration to the specific needs of the sellers. We believe target businesses will find
this method a more expeditious and cost effective method to becoming a public company than the typical initial public offering.
The typical initial public offering process takes a significantly longer period of time than the typical business combination
transaction process, and there are significant expenses in the initial public offering process, including underwriting discounts
and commissions, that may not be present to the same extent in connection with a business combination with us.
Furthermore, once a proposed business combination is completed,
the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’
ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring
or have negative valuation consequences. Once public, we believe the target business would then have greater access to capital,
an additional means of providing management incentives consistent with shareholders’ interests and the ability to use its
shares as currency for acquisitions. Being a public company can offer further benefits by augmenting a company’s profile
among potential new customers and vendors and aid in attracting talented employees.
While we believe that our structure and our management team’s
backgrounds will make us an attractive business partner, some potential target businesses may view our status as a blank check
company, such as our lack of an operating history and our ability to seek shareholder approval of any proposed initial business
combination, negatively.
We are an “emerging growth company,” as defined
in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the JOBS Act. As
such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other
public companies that are not “emerging growth companies” including, but not limited to, not being required to comply
with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory
vote on executive compensation and shareholder approval of any golden parachute payments not previously approved, If some investors
find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of
our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that
an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of
the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company”
can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend
to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier
of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our IPO, which we completed
on January 14, 2021 (our “IPO”), (b) in which we have total annual gross revenue of at least $1.07 billion, or (c)
in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that are held
by non-affiliates equals or exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued
more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Financial Position
With funds available for a business combination initially in
the amount of up to $290,850,000 after payment of the estimated expenses of our IPO and $10,500,000 of deferred underwriting commissions,
we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential
growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete
our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility
to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit
its needs and desires. However, we have not taken any steps to secure third-party financing and there can be no assurance it will
be available to us.
Effecting Our Initial Business Combination
General
We are not presently engaged in, and we will not engage in,
any operations for an indefinite period of time following our IPO. We intend to effectuate our initial business combination using
cash from the proceeds of our IPO and the sale of the private placement warrants, our equity, debt or a combination of these as
the consideration to be paid in our initial business combination. We may seek to complete our initial business combination with
a company or business that may be financially unstable or in its early stages of development or growth, which would subject us
to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for using equity
or debt, or not all of the funds released from the trust account are used for payment of the consideration in connection with
our initial business combination or used for redemptions of our Class A ordinary shares, we may apply the balance of the cash
released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of
the post-business combination company, the payment of principal or interest due on indebtedness incurred in completing our initial
business combination, to fund the purchase of other companies or for working capital.
There is no current basis for investors in us to evaluate the
possible merits or risks of the target business with which we may ultimately complete our initial business combination. Although
our management will assess the risks inherent in a particular target business with which we may combine, we cannot assure you
that this assessment will result in our identifying all risks that a target business may encounter.
Furthermore, some of those risks may be outside of our control,
meaning that we can do nothing to control or reduce the chances that those risks will adversely affect a target business.
Sources of Target Businesses
We anticipate that target business candidates will be brought
to our attention from various unaffiliated sources, including investment market participants, private equity groups, investment
banking firms, consultants, accounting firms and large business enterprises. Target businesses may be brought to our attention
by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may also introduce
us to target businesses in which they think we may be interested on an unsolicited basis, since some of these sources will have
read this report and know what types of businesses we are targeting. Our officers and directors, as well as their affiliates,
may also bring to our attention target business candidates that they become aware of through their business contacts as a result
of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions. In addition, we
expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a
result of the business relationships of our officers and directors. While we do not presently anticipate engaging the services
of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these firms
or other individuals in the future, in which event we may pay a finder’s fee, consulting fee or other compensation to be
determined in an arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the extent
our management determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or
if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest
to pursue. Payment of finder’s fees is customarily tied to completion of a transaction, in which case any such fee will
be paid out of the funds held in the trust account. In no event, however, will our sponsor or any of our existing officers, or
their respective affiliates, be paid by us any finder’s fee, consulting fee or other compensation prior to, or for any services
they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction
that it is). However, we may pay any of our existing directors who are not also officers, or any entity with which they are affiliated,
a finder’s fee, consulting fee or other compensation in connection with identifying, investigating and completing our initial
business combination, to the extent such payment is in compliance with all laws and is consistent with independent director requirements.
Such payment may be paid from the proceeds held in the trust account upon consummation of an initial business combination. Some
of our officers and directors may enter into employment or consulting agreements with the post-business combination company following
our initial business combination. The presence or absence of any such fees or arrangements will not be used as a criterion in
our selection process of an acquisition candidate.
We are not prohibited from pursuing an initial business combination
with a company that is affiliated with our sponsor, Founder, officers or directors. In the event we seek to complete our initial
business combination with a company that is affiliated with our sponsor or any of our Founder, officers or directors, we, or a
committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent
entity that commonly renders valuation opinions that such initial business combination is fair to our company from a financial
point of view. We are not required to obtain such an opinion in any other context.
Each of our officers and directors presently has, and any of
them in the future may have, additional, fiduciary or contractual obligations to other entities, including entities that are affiliates
of our sponsor, pursuant to which such officer or director is or will be required to present a business combination opportunity
to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is
suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her
fiduciary or contractual obligations to present such business combination opportunity to such entity, subject to their fiduciary
duties under Cayman Islands law.
Evaluation of a Target Business and Structuring of Our
Initial Business Combination
In evaluating a prospective target business, we expect to conduct
a due diligence review which may encompass, as applicable and among other things, meetings with incumbent management and employees,
document reviews, interviews of customers and suppliers, inspection of facilities (subject to any applicable COVID restrictions)
and a review of financial and other information about the target and its industry. We will also utilize our management team’s
operational and capital planning experience. If we determine to move forward with a particular target, we will proceed to structure
and negotiate the terms of the business combination transaction.
The time required to select and evaluate a target business
and to structure and complete our initial business combination, and the costs associated with this process, are not currently
ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of, and negotiation
with, a prospective target business with which our initial business combination is not ultimately completed will result in our
incurring losses and will reduce the funds we can use to complete another business combination. We will not pay any consulting
fees to members of our management team, or their respective affiliates, for services rendered to or in connection with our initial
business combination. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination
without the prior consent of our sponsor.
Lack of Business Diversification
For an indefinite period of time after the completion of our
initial business combination, the prospects for our success may depend entirely on the future performance of a single business.
Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries,
it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line
of business. By completing our initial business combination with only a single entity, our lack of diversification may:
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subject us to
negative economic, competitive and regulatory developments, any or all of which may have
a substantial adverse impact on the particular industry in which we operate after our
initial business combination; and
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cause us to depend
on the marketing and sale of a single product or limited number of products or services.
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Limited Ability to Evaluate the Target’s Management
Team
Although we intend to closely scrutinize the management of
a prospective target business when evaluating the desirability of effecting our initial business combination with that business,
our assessment of the target business’s management may not prove to be correct. In addition, the future management may not
have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of
our management team, if any, in the target business cannot presently be stated with any certainty. The determination as to whether
any of the members of our management team will remain with the combined company will be made at the time of our initial business
combination. While it is possible that one or more of our directors will remain associated in some capacity with us following
our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to
our initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience
or knowledge relating to the operations of the particular target business.
We cannot assure you that any of our key personnel will remain
in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel
will remain with the combined company will be made at the time of our initial business combination.
Following a business combination, we may seek to recruit additional
managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to
recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to
enhance the incumbent management.
Shareholders May Not Have the Ability to Approve Our
Initial Business Combination
We may conduct redemptions without a shareholder vote pursuant
to the tender offer rules of the SEC subject to the provisions of our amended and restated memorandum and articles of association.
However, we will seek shareholder approval if it is required by applicable law or stock exchange listing requirement, or we may
decide to seek shareholder approval for business or other reasons.
Under Nasdaq’s listing rules, shareholder approval would
typically be required for our initial business combination if, for example:
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We issue ordinary
shares that will be equal to or in excess of 20% of the number of our ordinary shares
then-outstanding (other than in a public offering);
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Any of our directors,
officers or substantial security holder (as defined by Nasdaq rules) has a 5% or greater
interest (or such persons collectively having a 10% or greater interest), directly or
indirectly, in the target business or assets to be acquired or otherwise and the present
or potential issuance of ordinary shares could result in an increase in issued and outstanding
ordinary shares or voting power of 5% or more; or
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The issuance or
potential issuance of ordinary shares will result in our undergoing a change of control.
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The decision as to
whether we will seek shareholder approval of a proposed business combination in those instances in which shareholder approval
is not required by law will be made by us, solely in our discretion, and will be based on business and reasons, which include
a variety of factors, including, but not limited to:
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the timing of
the transaction, including in the event we determine shareholder approval would require
additional time and there is either not enough time to seek shareholder approval or doing
so would place the company at a disadvantage in the transaction or result in other additional
burdens on the company;
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the expected cost
of holding a shareholder vote;
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the risk that
the shareholders would fail to approve the proposed business combination;
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other time and
budget constraints of the company; and
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additional legal
complexities of a proposed business combination that would be time-consuming and burdensome
to present to shareholders.
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Permitted Purchases and Other Transactions with Respect
to Our Securities
If we seek shareholder approval of our initial business combination
and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our
sponsor, directors, executive officers, advisors or their affiliates may purchase public shares or warrants in privately negotiated
transactions or in the open market either prior to or following the completion of 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 non-public information), our sponsor, directors,
executive officers, advisors or 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, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms
or conditions for any such transactions. None of the funds in the trust account will be used to purchase public shares or warrants
in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are
in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation
M under the Exchange Act.
In the event that our sponsor, directors, officers, advisors
or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to
exercise their redemption rights or submitted a proxy to vote against our initial business combination, such selling shareholders
would be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial business combination.
We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules
under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the
purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will be required
to comply with such rules.
The purpose of any such transaction could be to (i) vote in
favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination,
(ii) reduce the number of public warrants outstanding or vote such warrants on any matters submitted to the warrant holders for
approval in connection with our initial business combination or (iii) 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 purchases of our securities 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 ordinary shares or public warrants may be reduced and the number of beneficial holders of our securities may be
reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities
exchange.
Our sponsor, officers, directors and/or their affiliates anticipate
that they may identify the shareholders with whom our sponsor, officers, directors or their affiliates may pursue privately negotiated
transactions by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders
(in the case of Class A ordinary shares) following our mailing of tender offer or proxy materials in connection with our initial
business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into a private transaction,
they would identify and contact only potential selling or redeeming shareholders who have expressed their election to redeem their
shares for a pro rata share of the trust account or vote against our initial business combination, whether or not such shareholder
has already submitted a proxy with respect to our initial business combination but only if such shares have not already been voted
at the general meeting related to our initial business combination. Our sponsor, executive officers, directors, advisors or their
affiliates will select which shareholders to purchase shares from based on the negotiated price and number of shares and any other
factors that they may deem relevant, and will be restricted from purchasing shares if such purchases do not comply with Regulation
M under the Exchange Act and the other federal securities laws.
Our sponsor, officers, directors and/or their affiliates will
be restricted from making purchases of shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.
We expect any such purchases would be reported by such person pursuant to Section 13 and Section 16 of the Exchange Act to the
extent such purchasers are subject to such reporting requirements.
Redemption Rights for Public Shareholders upon Completion
of Our Initial Business Combination
We will provide our public shareholders with the opportunity
to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination at a
per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business
days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account
and not previously released to us to pay our income taxes, if any, divided by the number of then-outstanding public shares, subject
to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The
per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting
commissions we will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must
identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of our initial business
combination with respect to our warrants. Further, we will not proceed with redeeming our public shares, even if a public shareholder
has properly elected to redeem its shares, if a business combination does not close. Our sponsor and each member of our management
team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect
to any founder shares and public shares held by them in connection with (i) the completion of our initial business combination,
and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that
would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their
shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete
our initial business combination within 24 months from the closing of our IPO or during any Extension Period or (B) with respect
to any other provision relating to the rights of holders of our Class A ordinary shares.
Distribution of Distributable Redeemable Warrants to
Holders of Class A Ordinary Shares Not Electing Redemption
At the distribution time, we will effect a distribution of
a number of warrants up to the Aggregate Warrant Amount, as follows: (i) to the extent that no public shareholders redeem their
public shares in connection with our initial business combination, each public shareholder will receive one-sixth of one distributable
redeemable warrant per public share held and (ii) to the extent that any public shareholders redeem any of their public shares
in connection with our initial business combination, then (A) one-sixth of one distributable redeemable warrant will be distributed
to the holder of each non-redeemed (or “remaining”) public share and (B) no distributable redeemable warrants will
be distributed in respect of any public shares that were redeemed.
Public shareholders who exercise their redemption rights are
not entitled to receive any distribution of distributable redeemable warrants in respect of such redeemed public shares. If any
such redemptions occur, the distributable redeemable warrants attached to the redeemed public shares will not be redistributed.
The contingent right to receive distributable redeemable warrants will remain attached to our Class A ordinary shares, will not
be separately transferrable, assignable or salable and will not be evidenced by any certificate or instrument.
Our distributable redeemable warrants are otherwise identical
to our detachable redeemable warrants, including with respect to exercise price, exercisability and exercise period. No fractional
distributable redeemable warrants will be issued, no cash will be paid in lieu of fractional distributable redeemable warrants
and only whole warrants will trade. The distributable redeemable warrants will be fungible with our detachable redeemable warrants
and will become tradable upon their distribution under the same stock symbol as the detachable redeemable warrants.
Limitations on Redemptions
Our amended and restated memorandum and articles of association
provide 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 either prior to or upon consummation of an initial business combination (so that we do not then become subject to the
SEC’s “penny stock” rules). However, the proposed business combination may require: (i) cash consideration to
be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate
purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination.
In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted
for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination
exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all
Class A ordinary shares submitted for redemption will be returned to the holders thereof.
Manner of Conducting Redemptions
We will provide our public shareholders with the opportunity
to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination either (i)
in connection with a general meeting called to approve the business combination or (ii) by means of a tender offer. The decision
as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us,
solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms
of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirement or
whether we were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval
under SEC rules). Asset acquisitions and share purchases would not typically require shareholder approval while direct mergers
with our company where we do not survive and any transactions where we issue more than 20% of our issued and outstanding ordinary
shares or seek to amend our amended and restated memorandum and articles of association would typically require shareholder approval.
We currently intend to conduct redemptions in connection with a shareholder vote unless shareholder approval is not required by
applicable law or stock exchange listing requirement or we choose to conduct redemptions pursuant to the tender offer rules of
the SEC for business or other reasons. So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required
to comply with Nasdaq rules.
If we held a shareholder vote to approve our initial business
combination, we will, pursuant to our amended and restated memorandum and articles of association:
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conduct the redemptions
in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act,
which regulates the solicitation of proxies, and not pursuant to the tender offer rules;
and
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file proxy materials
with the SEC.
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In the event that we seek shareholder approval of our initial
business combination, we will distribute proxy materials and, in connection therewith, provide our public shareholders with the
redemption rights described above upon completion of our initial business combination.
If we seek shareholder approval, we will complete our initial
business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, being the affirmative
vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at a general
meeting. In such case, our sponsor and each member of our management team have agreed to vote founder shares and public shares
of theirs, if any, in favor of our initial business combination. As a result, in addition to our initial purchaser’s founder
shares, we would need 11,250,000, or 37.5% (assuming all issued and outstanding shares are voted), or 1,875,000, or 6.25% (assuming
only the minimum number of shares representing a quorum are voted), of the 30,000,000 public shares sold in our IPO to be voted
in favor of an initial business combination in order to have our initial business combination approved. Each public shareholder
may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all.
In addition, our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they
have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with
(i) the completion of a business combination, and (ii) a shareholder vote to approve an amendment to our amended and restated
memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our
Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem
100% of our public shares if we do not complete our initial business combination within 24 months from the closing of our IPO
or during any Extension Period or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary
shares.
If we conduct redemptions pursuant to the tender offer rules
of the SEC, we will, pursuant to our amended and restated memorandum and articles of association:
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conduct the redemptions
pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer
tender offers; and
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file tender offer
documents with the SEC prior to completing our initial business combination which contain
substantially the same financial and other information about our initial business combination
and the redemption rights as is required under Regulation 14A of the Exchange Act, which
regulates the solicitation of proxies.
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Upon the public announcement of our initial business combination,
if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate any plan established
in accordance with Rule 10b5-1 to purchase Class A ordinary shares in the open market, in order to comply with Rule 14e-5
under the Exchange Act.
In the event we conduct redemptions pursuant to the tender
offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange
Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period.
In addition, the tender offer will be conditioned on public shareholders not tendering more than the number of public shares we
are permitted to redeem. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender
offer and not complete such initial business combination.
Limitation on Redemption upon Completion of Our Initial
Business Combination If We Seek Shareholder Approval
If we seek shareholder approval of our initial business combination
and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our
amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of
such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under
Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of
the shares sold in our IPO, which we refer to as “Excess Shares,” without our prior consent. We believe this restriction
will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability
to exercise their redemption rights against a proposed business combination as a means to force us or our management to purchase
their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a
public shareholder holding more than an aggregate of 15% of the shares sold in our IPO could threaten to exercise its redemption
rights if such holder’s shares are not purchased by us, our sponsor or our management at a premium to the then-current market
price or on other undesirable terms. By limiting our shareholders’ ability to redeem no more than 15% of the shares sold
in our IPO without our prior consent, we believe we will limit the ability of a small group of shareholders to unreasonably attempt
to block our ability to complete our initial business combination, particularly in connection with a business combination with
a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.
However, we would not be restricting our shareholders’
ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Tendering Share Certificates in Connection with a Tender
Offer or Redemption Rights
Public shareholders seeking to exercise their redemption rights,
whether they are record holders or hold their shares in “street name,” will be required to either tender their certificates
(if any) to our transfer agent prior to the date set forth in the proxy solicitation or tender offer materials, as applicable,
mailed to such holders, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s
DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, in each case up to two business days prior to the
initially scheduled vote to approve the business combination. The proxy solicitation or tender offer materials, as applicable,
that we will furnish to holders of our public shares in connection with our initial business combination will indicate the applicable
delivery requirements, which will include the requirement that a beneficial holder must identify itself in order to validly redeem
its shares. Accordingly, a public shareholder would have from the time we send out our tender offer materials until the close
of the tender offer period, or up to two business days prior to the initially scheduled vote on the proposal to approve the business
combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption
rights. Given the relatively short period in which to exercise redemption rights, it is advisable for shareholders to use electronic
delivery of their public shares.
There is a nominal cost associated with the above-referenced
tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will
typically charge the tendering broker a fee of approximately $80.00 and it would be up to the broker whether or not to pass this
cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to
exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights
regardless of the timing of when such delivery must be effectuated.
The foregoing is different from the procedures used by many
blank check companies. In order to perfect redemption rights in connection with their business combinations, many blank check
companies would distribute proxy materials for the shareholders’ vote on an initial business combination, and a holder could
simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise
his or her redemption rights. After the business combination was approved, the company would contact such shareholder to arrange
for him or her to deliver his or her certificate to verify ownership. As a result, the shareholder then had an “option window”
after the completion of the business combination during which he or she could monitor the price of the company’s shares
in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market before
actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which shareholders
were aware they needed to commit before the general meeting, would become “option” rights surviving past the completion
of the business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery
prior to the meeting ensures that a redeeming shareholder’s election to redeem is irrevocable once the business combination
is approved.
Any request to redeem such shares, once made, may be withdrawn
at any time up to two business days prior to the initially scheduled vote on the proposal to approve the business combination,
unless otherwise agreed to by us. Furthermore, if a holder of a public share delivered its certificate in connection with an election
of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may
simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds
to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion
of our initial business combination.
If our initial business combination is not approved or completed
for any reason, then our public shareholders who elected to exercise their redemption rights would not be entitled to redeem their
shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered
by public holders who elected to redeem their shares.
If our initial proposed business combination is not completed,
we may continue to try to complete a business combination with a different target until 24 months from the closing of our IPO.
Redemption of Public Shares and Liquidation If No Initial
Business Combination
Our amended and restated memorandum and articles of association
provide that we will have only 24 months from the closing of our IPO to consummate an initial business combination. If we have
not consummated an initial business combination within 24 months from the closing of our IPO, we will: (i) cease all operations
except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter,
redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account,
including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if
any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares,
which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive
further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to
the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses
(ii) and (iii) to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable
law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless
and no distributable redeemable warrants will have been issued if we fail to consummate an initial business combination within
24 months from the closing of our IPO. Our amended and restated memorandum and articles of association provide that, if we wind
up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures
with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter,
subject to applicable Cayman Islands law.
Our sponsor and each member of our management team have entered
into an agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust
account with respect to any founder shares they hold if we fail to consummate an initial business combination within 24 months
from the closing of our IPO or during any Extension Period (although they will be entitled to liquidating distributions from the
trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed
time frame).
Our sponsor, executive officers and directors have agreed,
pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles
of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares
the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares
if we do not complete our initial business combination within 24 months from the closing of our IPO or (B) with respect to any
other provision relating to the rights of holders of our Class A ordinary shares, unless we provide our public shareholders with
the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal
to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account
and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares.
However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001
either prior to or upon consummation of an initial business combination (so that we do not then become subject to the SEC’s
“penny stock” rules). If this optional redemption right is exercised with respect to an excessive number of public
shares such that we cannot satisfy the net tangible asset requirement, we would not proceed with the amendment or the related
redemption of our public shares at such time. This redemption right shall apply in the event of the approval of any such amendment,
whether proposed by our sponsor, any executive officer, director or any other person.
We expect that all costs and expenses associated with implementing
our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the proceeds from
our IPO held outside the trust account plus up to $100,000 of funds from the trust account available to us to pay dissolution
expenses, although we cannot assure you that there will be sufficient funds for such purpose.
If we were to expend all of the net proceeds of our IPO and
the sale of the private placement warrants, other than the proceeds deposited in the trust account, and without taking into account
interest, if any, earned on the trust account, the per-share redemption amount received by shareholders upon our dissolution would
be $10.00. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would
have higher priority than the claims of our public shareholders. We cannot assure you that the actual per-share redemption amount
received by shareholders will not be less than $10.00. While we intend to pay such amounts, if any, we cannot assure you that
we will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have all vendors, service providers,
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 shareholders, there
is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from
bringing claims against the trust account including, but not limited, to fraudulent inducement, breach of fiduciary responsibility
or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage
with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute
an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives
available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes
that such third-party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible
instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant
whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that
would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver.
UBS Securities LLC and RBC Capital Markets, LLC will not execute an agreement with us waiving such claims to the monies held in
the trust account. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future
as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust
account for any reason. In order to protect the amounts held in the trust account, our sponsor has agreed that it will be liable
to us if and to the extent any claims by a third party for services rendered or products sold to us (other than our independent
registered public accounting firm), or a prospective target business with which we have discussed entering into a transaction
agreement, reduce the amounts in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount
per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public
share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax
obligations, provided that such liability will not apply to any claims by a third party or prospective target business
that executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity
of the underwriters of our IPO against certain liabilities, including liabilities under the Securities Act. In the event that
an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any
liability for such third-party claims. However, we have not asked our sponsor to reserve for such indemnification obligations,
nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe
that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be
able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including,
without limitation, claims by vendors and prospective target businesses.
In the event that the proceeds in the trust account are reduced
below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the
date of the liquidation of the trust account if less than $10.00 per public share 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 our income tax obligations, and our sponsor asserts
that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular
claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification
obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor
to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment
may choose not to do so in any particular instance. Accordingly, due to the potential claims of creditors, we cannot assure you
that the actual value of the per-share redemption price will not be less than $10.00 per public share.
We will seek to reduce the possibility that our sponsor will
have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers, prospective
target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or
claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity
of the underwriters of our IPO against certain liabilities, including liabilities under the Securities Act. We have had access
to over $1,350,000 following our IPO and the sale of the private placement warrants with which to pay any such potential claims
(including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately
$100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient,
shareholders who received funds from our trust account could be liable for claims made by creditors. However, any such liability
would not be greater than the amount of funds from our trust account received by any such shareholder. In the event that our IPO
expenses exceed our estimate of $1,000,000, we may fund such excess with funds from the funds not to be held in the trust account.
In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely,
in the event that our IPO expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside
the trust account would increase by a corresponding amount.
If we file a bankruptcy or insolvency petition or an involuntary
bankruptcy or insolvency petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject
to applicable bankruptcy or insolvency law, and may be included in our bankruptcy or insolvency estate and subject to the claims
of third parties with priority over the claims of our shareholders. To the extent any bankruptcy or insolvency claims deplete
the trust account, we cannot assure you we will be able to return $10.00 per public share to our public shareholders. Additionally,
if we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is
not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or
insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy
or insolvency court could seek to recover some or all amounts received by our shareholders. Furthermore, our board of directors
may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing
itself and our company to claims of punitive damages, by paying public shareholders from the trust account prior to addressing
the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public shareholders will be entitled to receive funds from
the trust account only (i) in the event of the redemption of our public shares if we do not complete our initial business combination
within 24 months from the closing of our IPO, (ii) in connection with a shareholder vote to amend our amended and restated memorandum
and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary
shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public
shares if we do not complete our initial business combination within 24 months from the closing of our IPO or (B) with respect
to any other provision relating to the rights of holders of our Class A ordinary shares, or (iii) if they redeem their respective
shares for cash upon the completion of our initial business combination. Public shareholders who redeem their Class A ordinary
shares in connection with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds
from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not consummated
an initial business combination within 24 months from the closing of our IPO, with respect to such Class A ordinary shares so
redeemed. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. In the
event we seek shareholder approval in connection with our initial business combination, a shareholder’s voting in connection
with the business combination alone will not result in a shareholder’s redeeming its shares to us for an applicable pro
rata share of the trust account. Such shareholder must have also exercised its redemption rights described above. These provisions
of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum
and articles of association, may be amended with a shareholder vote.
Competition
In identifying, evaluating and selecting a target business
for our initial business combination, we may encounter intense competition from other entities having a business objective similar
to ours, including other blank check companies, private equity groups and leveraged buyout funds, public companies, and operating
businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying
and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial,
technical, human and other resources than us. Our ability to acquire larger target businesses will be limited by our available
financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore,
our obligation to pay cash in connection with our public shareholders who exercise their redemption rights may reduce the resources
available to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent,
may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in
successfully negotiating an initial business combination.
Facilities
We have no physical facilities; we expect that our officers
and the investment professionals who provide services to us under the Services Agreement (as defined below) will work remotely.
Our address is 7 Rye Ridge Plaza Suite 350, Rye Brook, NY 10573. We consider these arrangements adequate for our current operations.
Employees
We currently have two executive officers. These individuals
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 they will devote in
any time period will vary based on whether a target business has been selected for our initial business combination and the stage
of the business combination process we are in. We are also being provided the services of one or more investment professionals,
pursuant to the Services Agreement (as defined below). We do not intend to have any full time employees prior to the completion
of our initial business combination.
Periodic Reporting and Financial Information
We have registered our units, Class A ordinary shares and warrants
under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports
with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will contain financial statements audited
and reported on by our independent registered public accountants.
We will provide shareholders with audited financial statements
of the prospective target business as part of the proxy solicitation or tender offer materials, as applicable, sent to shareholders.
These financial statements may be required to be prepared in accordance with, or reconciled to, GAAP, or IFRS, depending on the
circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB.
These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may
be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete
our initial business combination within the prescribed time frame. We cannot assure you that any particular target business identified
by us as a potential acquisition candidate will have financial statements prepared in accordance with the requirements outlined
above, or that the potential target business will be able to prepare its financial statements in accordance with the requirements
outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed target business.
While this may limit the pool of potential acquisition candidates, we do not believe that this limitation will be material.
We will be required to evaluate our internal control procedures
for the fiscal year ending December 31, 2021 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large
accelerated filer or an accelerated filer and no longer qualify as an emerging growth company, will we not be required to comply
with the independent registered public accounting firm attestation requirement 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 have filed a Registration Statement on Form 8-A with the
SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we are subject to the rules
and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting
or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
We are a Cayman Islands exempted company. Exempted companies
are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying with
certain provisions of the Companies Law. As an exempted company, we have applied for and received a tax exemption undertaking
from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Act (2018 Revision) of the Cayman
Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any
tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to
be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable
(i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a
payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest
or other sums due under a debenture or other obligation of us.
We are an “emerging growth company,” as defined
in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions
from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”
including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions
from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden
parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a
less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that
an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of
the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company”
can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend
to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier
of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our IPO, (b) in which we
have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which
means the market value of our Class A ordinary shares that are held by non-affiliates exceeds $700 million as of the prior June
30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the
prior three-year period.
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 aggregate worldwide market value of our ordinary shares held by non-affiliates
equals or exceeds $250 million as of the prior June 30, or (2) our annual revenues exceeded $100 million during such completed
fiscal year and the aggregate worldwide market value of our ordinary shares held by non-affiliates equals or exceeds $700 million
as of the prior June 30.
Summary of Risk
Factors
An investment in our securities involves a high degree of risk.
The occurrence of one or more of the events or circumstances described in the section entitled “Risk Factors,” alone
or in combination with other events or circumstances, may materially adversely affect our business, financial condition and operating
results. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.
Such risks include, but are not limited to, the following:
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We are a recently
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.
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Past
performance by our management team or their respective affiliates may not be indicative
of future performance of an investment in us.
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Our
shareholders 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 shareholders do not support such a combination.
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Your
only opportunity to affect the investment decision regarding a potential business combination
may be limited to the exercise of your right to redeem your shares from us for cash.
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If
we seek shareholder approval of our initial business combination, our initial shareholders
have agreed to vote in favor of such initial business combination, regardless of how
our public shareholders vote.
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The
ability of our public shareholders to redeem their shares for cash may make our financial
condition unattractive to potential business combination targets, which may make it difficult
for us to enter into a business combination with a target.
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The
ability of our public shareholders 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.
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The
requirement that we consummate an initial business combination within 24 months (or such
later date as approved by our shareholders) after the closing of our IPO 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 shareholders.
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Our
search for a business combination, and any target business with which we ultimately consummate
a business combination, may be materially adversely affected by the coronavirus (COVID-19)
outbreak and the status of debt and equity markets.
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If
we seek shareholder approval of our initial business combination, our initial shareholders,
directors, executive officers, advisors and their affiliates may elect to purchase public
shares or warrants, which may influence a vote on a proposed business combination and
reduce the public “float” of our Class A ordinary shares or public warrants.
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If
a shareholder fails to receive notice of our offer to redeem our public shares in connection
with our initial business combination, or fails to comply with the procedures for tendering
shares, such shares may not be redeemed.
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You
will not have any rights or interests in funds from the trust account, except under certain
limited circumstances. Therefore, to liquidate your investment, you may be forced to
sell your public shares or warrants, potentially at a loss.
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Nasdaq
may delist our securities from trading on its exchange, which could limit investors’
ability to enter into transactions in our securities and subject us and them to additional
trading restrictions.
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You
will not be entitled to protections normally afforded to investors of many other blank
check companies.
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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 have
not consummated our initial business combination within the required time period, our
public shareholders may receive only approximately $10.00 per public share, or less in
certain circumstances, on the liquidation of our trust account and our detachable redeemable
warrants will expire worthless and no distributable redeemable warrants will be issued.
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If
the net proceeds of our IPO and the concurrent sale of private placement warrants not
being held in the trust account are insufficient to allow us to operate for the 24 months
following the closing of our IPO, it could limit the amount available to fund our search
for a target business or businesses and our ability to complete our initial business
combination, and we will depend on loans from our sponsor, its affiliates or members
of our management team to fund our search and complete our initial business combination.
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Item 1A.
Risk Factors
An investment in our securities involves a high degree of
risk. You should consider carefully all of the risks described below, together with the other information contained in this report,
before making a decision to invest in our securities. If any of the following events occur, our business, financial condition
and operating results may be materially adversely affected. In that event, the trading price of our securities could decline,
and you could lose all or part of your investment.
Risks Relating to our Search for, Consummation
of, or Inability to Consummate a Business Combination and Post-Business Combination Risks
Our shareholders 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 shareholders do not support such a combination.
We may choose not to hold a shareholder vote before we complete
our initial business combination if the business combination would not require shareholder approval under applicable law or stock
exchange listing requirement. For instance, if we were seeking to acquire a target business where the consideration we were paying
in the transaction was all cash, we would typically not be required to seek shareholder approval to complete such a transaction.
Except for as required by applicable law or stock exchange listing requirement, the decision as to whether we will seek shareholder
approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will be made
by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether
the terms of the transaction would otherwise require us to seek shareholder approval. Accordingly, we may complete our initial
business combination even if holders of a majority of our issued and outstanding ordinary shares do not approve of the business
combination we complete.
If we seek shareholder approval of our initial business
combination, our sponsor and members of our management team have agreed to vote in favor of such initial business combination,
regardless of how our public shareholders vote.
Our sponsor owns, on an as-converted basis, 20% of our outstanding
ordinary shares. Our sponsor and members of our management team also may from time to time purchase Class A ordinary shares prior
to our initial business combination. Our amended and restated memorandum and articles of association provide that, if we seek
shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution
under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and
entitled to vote thereon and who vote at a general meeting. As a result, in addition to our initial purchaser’s founder
shares, we would need 11,250,000, or 37.5% (assuming all issued and outstanding shares are voted), or 1,875,000, or 6.25% (assuming
only the minimum number of shares representing a quorum are voted), of the 30,000,000 public shares sold in our IPO to be voted
in favor of an initial business combination in order to have our initial business combination approved. Accordingly, if we seek
shareholder approval of our initial business combination, the agreement by our sponsor and each member of our management team
to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite shareholder
approval for such initial business combination.
Your only opportunity to affect the investment decision
regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
At the time of your investment in us, you will not be provided
with an opportunity to evaluate the specific merits or risks of any target businesses. Since our board of directors may complete
a business combination without seeking shareholder approval, public shareholders may not have the right or opportunity to vote
on the business combination, unless we seek such shareholder approval. Accordingly, 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 shareholders in which we
describe our initial business combination.
The ability of our public shareholders to redeem their shares
for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult
for us to enter into a business combination with a target.
We may seek to enter into a business combination transaction
agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount
of cash. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing condition
and, as a result, would not be able to proceed with the business combination. Furthermore, 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 either prior to or upon consummation of
an initial business combination (so that we do not then become subject to the SEC’s “penny stock” rules).
Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001
either prior to or upon consummation of an initial business combination or such greater amount necessary to satisfy a closing
condition as described above, we would not proceed with such redemption and the related business combination and may instead search
for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into
a business combination transaction with us.
The ability of our public shareholders to exercise redemption
rights with respect to a large 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 shareholders may exercise their redemption rights, and therefore will need to structure
the transaction based on our expectations as to the number of shares that will be submitted for redemption. If a large number
of shares are submitted for redemption, we may need to restructure the transaction to reserve a greater portion of the cash in
the trust account or arrange for additional 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 amount of the deferred
underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with
an initial business combination. The per-share amount we will distribute to shareholders who properly exercise their redemption
rights will not be reduced by the deferred underwriting commissions and after such redemptions, the amount held in trust will
continue to reflect our obligation to pay the entire deferred underwriting commissions.
The ability of our public shareholders to exercise redemption
rights with respect to a large number of our shares could increase the probability that our initial business combination would
be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination agreement requires us to
use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing,
the probability that our initial business combination would be unsuccessful is increased. If our initial business combination
is unsuccessful, you would not receive your pro rata portion of the funds in the trust account until we liquidate the trust account.
If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our
shares may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material
loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are
able to sell your shares in the open market.
The requirement that we consummate an initial business combination
within 24 months after the closing of our IPO 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 shareholders.
Any potential target business with which we enter into negotiations
concerning a business combination will be aware that we must consummate an initial business combination within 24 months from
the closing of our IPO. 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 time frame
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.
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, 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. If we are unable to consummate an initial business combination, our public shareholders may receive
only $10.00 per public share, or less than $10.00 per public share, on the redemption of their shares, our detachable redeemable
warrants will expire worthless and no distributable redeemable warrants will have been distributed.
Our search for a business combination, and any target business
with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19)
outbreak and the status of debt and equity markets.
In December 2019, a novel strain of coronavirus was reported
to have surfaced, which has and is continuing to spread throughout the world, including the United States. On January 30,
2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency
of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared
a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11,
2020 the World Health Organization characterized the outbreak as a “pandemic.” The pandemic, together with
resulting voluntary and U.S. federal and state and non-U.S. governmental actions, including, without limitation, mandatory business
closures, public gathering limitations, restrictions on travel and quarantines, has meaningfully disrupted the global economy
and markets. Although the long-term economic fallout of COVID-19 is difficult to predict, it has and is expected to continue to
have ongoing material adverse effects across many, if not all, aspects of the regional, national and global economy. The COVID-19
outbreak has and a significant outbreak of other infectious diseases could result in a widespread health crisis that could adversely
affect the economies and financial markets worldwide, and the business of any potential target business with which we consummate
a business combination could be materially and adversely affected. Furthermore, we may be unable to complete a business combination
if continued concerns relating to COVID-19 continues to restrict travel, limit the ability to have meetings with potential investors
or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction
in a timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments,
which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19
and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of
global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of
a target business with which we ultimately consummate a business combination, may be materially adversely affected.
In addition, our ability to consummate a transaction may be
dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events, including as a
result of increased market volatility, decreased market liquidity in third-party financing being unavailable on terms acceptable
to us or at all.
We may not be able to consummate an initial business combination
within 24 months after the closing of our IPO, in which case we would cease all operations except for the purpose of winding up
and we would redeem our public shares and liquidate, in which case our public shareholders may receive only $10.00 per share,
or less than such amount in certain circumstances, and our detachable redeemable warrants will expire worthless, and our distributable
redeemable warrants will never have been distributed.
We may not be able to find a suitable target business and consummate
an initial business combination within 24 months after the closing of our IPO. 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 outbreak of COVID-19 continues to grow 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. Additionally, the outbreak of COVID-19 may negatively impact businesses we may seek to acquire.
If we have not consummated an initial business combination within such applicable time period, we will: (i) cease all operations
except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter,
redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account,
including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if
any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares,
which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive
further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses
(ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other
applicable law. Our amended and restated memorandum and articles of association provide that, if we wind up for any other reason
prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation
of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable
Cayman Islands law. In either such case, our public shareholders may receive only $10.00 per public share, or less than $10.00
per public share, on the redemption of their shares, our detachable redeemable warrants will expire worthless and no distributable
redeemable warrants will have been distributed.
If we have not consummated an initial business combination
within 24 months from the closing of our IPO, our public shareholders may be forced to wait beyond such 24 months before redemption
from our trust account.
If we have not consummated an initial business combination
within 24 months from the closing of our IPO, the proceeds then on deposit in the trust account, including interest earned on
the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of
interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein.
Any redemption of public shareholders from the trust account will be effected automatically by function of our amended and restated
memorandum and articles of association prior to any voluntary winding up. If we are required to wind up, liquidate the trust account
and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up,
liquidation and distribution must comply with the applicable provisions of the Companies Law. In that case, investors may be forced
to wait beyond 24 months from the closing of our IPO before the redemption proceeds of our trust account become available to them,
and they receive the return of their pro rata portion of the proceeds from our trust account. We have no obligation to return
funds to investors prior to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business
combination or amend certain provisions of our amended and restated memorandum and articles of association, and only then in cases
where investors have sought to redeem their Class A ordinary shares. Only upon our redemption or any liquidation will public shareholders
be entitled to distributions if we do not complete our initial business combination and do not amend certain provisions of our
amended and restated memorandum and articles of association. Our amended and restated memorandum and articles of association provide
that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing
procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business
days thereafter, subject to applicable Cayman Islands law.
If we seek shareholder approval of our initial business
combination, our sponsor, directors, executive officers, advisors and their affiliates may elect to purchase public shares or
warrants, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A
ordinary shares or public warrants.
If we seek shareholder approval of our initial business combination
and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our
sponsor, directors, executive officers, advisors or their affiliates may purchase public shares or detachable redeemable 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 to do so. However, they have no current commitments,
plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions.
None of the funds in the trust account will be used to purchase public shares or warrants in such transactions.
In the event that our sponsor, directors, executive officers,
advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected
to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their
shares. The purpose of any such transaction could be to (1) vote in favor of the business combination and thereby increase
the likelihood of obtaining shareholder approval of the business combination, (2) reduce the number of public warrants outstanding
or 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 purchases of our securities 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 ordinary
shares or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make
it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange. Any
such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers
are subject to such reporting requirements.
If a shareholder fails to receive notice of our offer to
redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering
its shares, such shares may not be redeemed.
We will comply with the proxy rules or tender offer rules,
as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these
rules, if a shareholder fails to receive our proxy solicitation or tender offer materials, as applicable, such shareholder may
not become aware of the opportunity to redeem its shares. In addition, the proxy solicitation or tender offer 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 redeem or tender public shares. In the event that a shareholder fails
to comply with these procedures, its shares may not be redeemed.
You will not have any rights or interests in funds from
the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell
your public shares or warrants, potentially at a loss.
Our public shareholders will be entitled to receive funds from
the trust account only upon the earliest to occur of: (i) our completion of an initial business combination, and then only
in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations
described herein, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend
our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to
provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business
combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from
the closing of our IPO or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary
shares, and (iii) the redemption of our public shares if we have not consummated an initial business within 24 months from
the closing of our IPO, subject to applicable law and as further described herein. Public shareholders who redeem their Class A
ordinary shares in connection with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled
to funds from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not
consummated an initial business combination within 24 months from the closing of our IPO, with respect to such Class A ordinary
shares so redeemed. In no other circumstances will a public shareholder have any right or interest of any kind in 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.
The provisions of our amended and restated memorandum and
articles of association that relate to the rights of holders of our Class A ordinary shares (and corresponding provisions of the
agreement governing the release of funds from our trust account) may be amended with the approval of a special resolution which
requires the approval of the holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of
the company, 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 memorandum and articles of association to facilitate the completion of an initial business combination
that some of our shareholders 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 the rights of a company’s
shareholders, without approval by a certain percentage of the company’s shareholders. In those companies, amendment of these
provisions typically requires approval by between 90% and 100% of the company’s shareholders. Our amended and restated memorandum
and articles of association provide that any of its provisions related to the rights of holders of our Class A ordinary shares
(including the requirement to deposit proceeds of our IPO and the private placement of warrants into the trust account and not
release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein)
may be amended if approved by special resolution, meaning holders of at least two-thirds of our ordinary shares who attend and
vote at a general meeting of the company, 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 ordinary shares; provided that the provisions of
our amended and restated memorandum and articles of association governing the appointment or removal of directors prior to our
initial business combination may only be amended by a special resolution passed by not less than two-thirds of our ordinary shares
who attend and vote at our general meeting which shall include the affirmative vote of a simple majority of our Class B ordinary
shares. Our sponsor and its permitted transferees, if any, who will collectively beneficially own, on an as-converted basis, 20%
of our Class A ordinary shares upon the closing of our IPO (assuming they do not purchase any units in our IPO), will participate
in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the
discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated
memorandum and articles of association which govern our pre-business combination behavior more easily than some other blank check
companies, and this may increase our ability to complete a business combination with which you do not agree. Our shareholders
may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
Our sponsor, executive officers and directors have agreed,
pursuant to agreements with us, that they will not propose any amendment to our amended and restated memorandum and articles of
association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares
the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares
if we do not complete our initial business combination within 24 months from the closing of our IPO or (B) with respect to any
other provision relating to the rights of holders of our Class A ordinary shares, unless we provide our public shareholders with
the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account
and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares.
Our shareholders 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, executive officers or directors for any breach of these agreements. As a result, in the
event of a breach, our shareholders would need to pursue a shareholder derivative action, subject to applicable law.
We may amend the terms of the contingent rights in a way
that may be adverse to holders with the consent or vote of the holders of not less than two-thirds of the then outstanding contingent
rights, as evidenced by their ownership of the ordinary shares.
Our contingent rights have been issued under a contingent rights
agreement between Continental Stock Transfer & Trust Company, as rights agent, and us. The contingent rights agreement provides
that the terms of the contingent rights may be amended without the consent of any holder for the purpose of curing any ambiguity,
or of curing, correcting or supplementing any defective provision contained therein or adding or changing any other provision
with respect to matters or questions arising under the contingent rights agreement as the parties may deem necessary or desirable.
The contingent rights agreement requires the consent or vote of the holders of not less than two-thirds of the then outstanding
contingent rights, as evidenced by their ownership of the ordinary shares, in order to make any change that will adversely affect
the interests of the holders of the contingent rights. As a result, a change that is approved by two-third of the holders of the
contingent rights, as evidenced by their ownership of the ordinary shares, could adversely affect your contingent rights, without
your approval.
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. If we have not consummated our initial business combination within the required
time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances,
on the liquidation of our trust account and our detachable redeemable warrants will expire worthless and no distributable redeemable
warrants will have been issued.
Although we believe that the net proceeds of our IPO 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 prospective target business we cannot ascertain the capital requirements for any particular transaction.
If the net proceeds of our IPO 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 shareholders who elect redemption in connection with our initial business
combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we
may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you that such financing
will be available on acceptable terms, if at all. The current economic environment may make it difficult for companies to obtain
acquisition financing. 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. If we have not consummated our initial business combination within the required time
period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the
liquidation of our trust account and our detachable redeemable warrants will expire worthless and no distributable redeemable
warrants will have been issued. 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 shareholders is required to provide any financing to us in connection with or after our initial business combination.
You will not be entitled to protections normally afforded
to investors of many other blank check companies.
Since the net proceeds of our IPO 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 be deemed to be a “blank check” company under the United States securities laws. However,
because we will have net tangible assets in excess of $5,000,000 upon the completion of our IPO and the sale of the private placement
warrants and have filed a current report on Form 8-K, including an audited balance sheet demonstrating this fact, we are
exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors
will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately
tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419.
Moreover, if our IPO had been subject to Rule 419, that rule would prohibit the release of any interest earned on funds held
in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion
of an initial business combination.
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 have
not consummated our initial business combination within the required time period, our public shareholders may receive only approximately
$10.00 per public share, or less in certain circumstances, on the liquidation of our trust account, our detachable redeemable
warrants will expire worthless and no distributable redeemable warrants will have been issued.
We expect to encounter intense competition from other entities
having a business objective similar to ours, including private investors (which may be individuals or investment partnerships),
other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to
acquire. Many of these individuals and entities are well established and have extensive experience in identifying and effecting,
directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors
possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will
be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses
we could potentially acquire with the net proceeds of our IPO and the sale of the private placement warrants, our ability to compete
with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources.
This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore,
we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial business
combination in conjunction with a shareholder vote or via a tender offer. Target companies will be aware that this may reduce
the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage
in successfully negotiating a business combination. If we have not consummated our initial business combination within the required
time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances,
on the liquidation of our trust account, our detachable redeemable warrants will expire worthless and no distributable redeemable
warrants will have been issued.
If the net proceeds of our IPO and the sale of the private
placement warrants not being held in the trust account are insufficient to allow us to operate for the 24 months following the
closing of our IPO, it could limit the amount available to fund our search for a target business or businesses and our ability
to complete our initial business combination, and we will depend on loans from our sponsor, its affiliates or members of our management
team to fund our search and to complete our initial business combination.
Of the net proceeds of our IPO and the sale of the private
placement warrants, over $1,350,000 will be available to us initially outside the trust account to fund our working capital requirements.
We believe that, upon the closing of our IPO, the funds available to us outside of the trust account, together with funds available
from loans from our sponsor, its affiliates or members of our management team will be sufficient to allow us to operate for at
least the 24 months following the closing of our IPO; however, we cannot assure you that our estimate is accurate, and our sponsor,
its affiliates or members of our management team are under no obligation to advance funds to us in such circumstances. Of the
funds available to us, we expect to use a portion of the funds available to us to pay fees to consultants to assist us with our
search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop”
provision (a provision in letters of intent designed to keep target businesses from “shopping” around for
transactions with other companies 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 a letter of intent where
we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether
as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence
with respect to, a target business.
In the event that our IPO expenses exceed our estimate of $1,000,000,
we may fund such excess with funds not to be held in the trust account. In such case, unless funded by the proceeds of loans available
from our sponsor, its affiliates or members of our management team the amount of funds we intend to be held outside the trust
account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate
of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. The
amount held in the trust account will not be impacted as a result of such increase or decrease. If we are required to seek additional
capital, we would need to borrow funds from our sponsor, its affiliates, members of our management team or other third parties
to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor their affiliates is under any
obligation to us in such circumstances. Any such advances may be repaid only from funds held outside the trust account or from
funds released to us upon completion of our initial business combination. Up to $2,000,000 of such loans may be convertible into
warrants of the post-business combination entity at a price of $1.50 per warrant at the option of the lender. The warrants would
be identical to the private placement warrants. Prior to the completion of our initial business combination, we do not expect
to seek loans from parties other than our sponsor, its affiliates or members of our management team as we do not believe third
parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust
account. If we have not consummated our initial business combination within the required time period because we do not have sufficient
funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public shareholders
may only receive an estimated $10.00 per public share, or possibly less, on our redemption of our public shares, our detachable
redeemable warrants will expire worthless and no distributable redeemable warrants will have been issued.
We may have a limited ability to assess the management of
a prospective target business and, as a result, may affect our initial business combination with a target business whose management
may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting our initial business
combination with a prospective target business, our ability to assess the target business’s management may be limited due
to a lack of time, resources or information. Our assessment of the capabilities of the target business’s management, therefore,
may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target
business’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 holders who choose to retain their
securities following the business combination could suffer a reduction in the value of their securities. Such 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 loss of a business combination target’s key personnel could
negatively impact the operations and profitability of our post-combination business.
The role of an acquisition candidate’s key personnel
upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain
members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our
initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain
in place.
A provision of our warrant agreement may make it more difficult
for us to consummate an initial business combination.
Unlike most blank check companies, if (i) we issue additional
Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial
business combination at a Newly Issued Price of less than $9.20 per ordinary share, (ii) 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 consummation of our initial business combination (net of redemptions), and (iii) the Market
Value is below $9.20 per share, then the exercise price of the warrants will be adjusted 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 prices described in the prospectus for
our IPO under “Description of Securities—Warrants—Public Shareholders’ Warrants—Redemption of warrants
when the price per Class A ordinary share equals or exceeds $18.00” and “Redemption of warrants when the price per
Class A ordinary share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher
of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described in the prospectus
for our IPO under “Description of Securities—Warrants—Public Shareholders’ Warrants—Redemption of
warrants when the price per Class A ordinary share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be
equal to 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.
Subsequent to our completion of our initial business combination,
we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant
negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose
some or all of your investment.
Even if we conduct due diligence on a target business with
which we combine, we cannot assure you that this diligence will identify all material issues 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 holders who choose to retain their securities following the business combination
could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value.
We may issue notes or other debt securities, or otherwise
incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and
thus negatively impact the value of our shareholders’ investment in us.
Although we have no commitments as of the date of this report
to issue any notes or other debt securities, or to otherwise incur outstanding debt following our IPO, we may choose to incur
substantial debt to complete our initial business combination. We and our officers 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:
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default and foreclosure
on our assets if our operating revenues after an initial business combination are insufficient
to repay our debt obligations;
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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;
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our immediate
payment of all principal and accrued interest, if any, if the debt is payable on demand;
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our inability
to obtain necessary additional financing if the debt contains covenants restricting our
ability to obtain such financing while the debt is outstanding;
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our inability
to pay dividends on our Class A ordinary shares;
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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 Class A ordinary shares if declared, expenses,
capital expenditures, acquisitions and other general corporate purposes;
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limitations on
our flexibility in planning for and reacting to changes in our business and in the industry
in which we operate;
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increased vulnerability
to adverse changes in general economic, industry and competitive conditions and adverse
changes in government regulation; and
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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.
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We may only be able to complete one business combination
with the proceeds of our IPO and the sale of the private placement warrants, which will cause us to be solely dependent on a single
business which may have a limited number of products or services. This lack of diversification may negatively impact our operations
and profitability.
The proceeds from our IPO and the sale of the private placement
warrants, after deducting underwriting commissions and estimated offering expenses, will provide us with up to $290,850,000 that
we may use to complete our initial business combination (after taking into account the $10,500,000 of deferred underwriting commissions
being held in the trust account and the estimated expenses of our IPO).
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 developments. Further, we would not be able to diversify our operations or benefit from the possible spreading
of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations
in different industries or different areas of a single industry.
Accordingly, the prospects for our success may be:
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solely dependent
upon the performance of a single business, property or asset; or
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dependent upon
the development or market acceptance of a single or limited number of products, processes
or services.
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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 (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.
Because we must furnish our shareholders with target business
financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective
target businesses.
The federal proxy rules require that a proxy statement with
respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial
statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender
offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to
be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America,
or 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 statements in time for us
to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed
time frame.
Our management may not be able to maintain control of a
target business after our initial business combination. Upon the loss of control of a target business, new management may not
possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination so that the
post-business combination company in which our public shareholders own shares will own less than 100% of the equity interests
or assets of a target business, but we will only complete such business combination if the post-business combination 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-business combination company owns 50% or
more of the voting securities of the target, our shareholders 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 the business
combination. For example, we could pursue a transaction in which we issue a substantial number of new Class A ordinary shares
in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire
a 100% interest in the target. However, as a result of the issuance of a substantial number of new Class A ordinary shares, our
shareholders immediately prior to such transaction could own less than a majority of our outstanding Class A ordinary shares subsequent
to such transaction. In addition, other minority shareholders may subsequently combine their holdings resulting in a single person
or group obtaining a larger share of the company’s shares than we initially acquired. Accordingly, this may make it more
likely that our management will not be able to maintain control of the target business.
We may seek business combination opportunities with a high
degree of complexity that require significant operational improvements, which could delay or prevent us from achieving our desired
results.
We may seek business combination opportunities with large,
highly complex companies that we believe would benefit from operational improvements. While we intend to implement such improvements,
to the extent that our efforts are delayed or we are unable to achieve the desired improvements, the business combination may
not be as successful as we anticipate.
To the extent we complete our initial business combination
with a large complex business or entity with a complex operating structure, we may also be affected by numerous risks inherent
in the operations of the business with which we combine, which could delay or prevent us from implementing our strategy. Although
our management team will endeavor to evaluate the risks inherent in a particular target business and its operations, we may not
be able to properly ascertain or assess all of the significant risk factors until we complete our business combination. If we
are not able to achieve our desired operational improvements, or the improvements take longer to implement than anticipated, we
may not achieve the gains that we anticipate. Furthermore, some of these risks and complexities may be outside of our control
and leave us with no ability to control or reduce the chances that those risks and complexities will adversely impact a target
business. Such combination may not be as successful as a combination with a smaller, less complex organization.
We do not have a specified maximum redemption threshold.
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 shareholders do not agree.
Our amended and restated memorandum and articles of association
do 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 either prior to or upon consummation of an initial business
combination (so that we do not then become subject to the SEC’s “penny stock” rules). As a result, we may be
able to complete our initial business combination even though a substantial majority of our public shareholders do not agree with
the transaction and have redeemed their shares or, if we seek shareholder approval of our initial business combination and do
not conduct redemptions in connection with our 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 their affiliates. In the
event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted
for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination
exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all Class
A ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate
business combination.
In order to effectuate an initial business combination,
blank check companies have, in the recent past, amended various provisions of their charters and other governing instruments,
including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated memorandum and
articles of association or governing instruments in a manner that will make it easier for us to complete our initial business
combination that our shareholders may not support.
In order to effectuate a business combination, blank check
companies have, in the recent past, amended various provisions of their charters and 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. Amending our amended and restated memorandum and articles
of association requires at least a special resolution of our shareholders as a matter of Cayman Islands law, meaning the approval
of holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company, and amending
our warrant agreement will require a vote of holders of at least 50% of the public warrants. In addition solely with respect to
any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private
placement warrants, a vote of holders of 50% of the number of the then outstanding private placement warrants is required. In
addition, our amended and restated memorandum and articles of association require us to provide our public shareholders with the
opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum and articles
of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares
the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares
if we do not complete our initial business combination within 24 months from the closing of our IPO or (B) with respect to any
other provision relating to the rights of holders of our Class A ordinary shares. To the extent any of such amendments would be
deemed to fundamentally change the nature of any of our outstanding public securities, we would register, or seek an exemption
from registration for, the affected securities.
If third parties bring claims against us, the proceeds held
in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per
public share.
Our placing of funds in the trust account may not protect those
funds from third-party claims against us. Although we will seek to have all vendors, service providers, prospective target businesses
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 shareholders, such parties may not execute such agreements,
or even if they execute such agreements, they may not be prevented from bringing claims against the trust account, including,
but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging
the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including
the funds held in the trust account. If any third-party refuses to execute an agreement waiving such claims to the monies held
in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an
agreement with a third-party that has not executed a waiver if management believes that such third-party’s engagement would
be significantly more beneficial to us than any alternative.
Examples of possible instances where we may engage a third-party
that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed
by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where
management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities
will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements
with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we have
not consummated an initial business combination within 24 months from the closing of our IPO, 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 ten years following redemption. Accordingly, the per-share redemption
amount received by public shareholders could be less than the $10.00 per public share initially held in the trust account, due
to claims of such creditors. Pursuant to the letter agreement the form of which is filed as an exhibit to this report, our sponsor
has agreed that it will be liable to us if and to the extent any claims by a third-party (other than our independent registered
public accounting firm) 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 amounts in the trust account to below the lesser of (i) $10.00 per public share
and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account
if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that
may be withdrawn to pay our tax obligations, provided that such liability will not apply to any claims by a third-party
or prospective target business that executed a waiver of any and all rights to seek access to the trust account nor will it apply
to any claims under our indemnity of the underwriters of our IPO 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.
However, we have not asked our sponsor to reserve for such
indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity
obligations and we believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you
that our sponsor would be able to satisfy those obligations. 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.
Our directors may decide not to enforce the indemnification
obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to
our public shareholders.
In the event that the proceeds in the trust account are reduced
below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the
date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust
assets, in each case net of the interest that may be withdrawn to pay our tax obligations, 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 and subject to their fiduciary
duties may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification
obligations, the amount of funds in the trust account available for distribution to our public shareholders may be reduced below
$10.00 per public share.
We may not have sufficient funds to satisfy indemnification
claims of our directors and executive officers.
We have agreed to indemnify our officers and directors to the
fullest extent permitted by law. However, our officers and directors have agreed to waive any right, title, interest or claim
of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any reason whatsoever
(except to the extent they are entitled to funds from the trust account due to their ownership of public shares). Accordingly,
any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the trust account
or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and directors may discourage shareholders
from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the
effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if
successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected
to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification
provisions.
If, after we distribute the proceeds in the trust account
to our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is
filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of
our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members
of our board of directors and us to claims of punitive damages.
If, after we distribute the proceeds in the trust account to
our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed
against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor
and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.”
As a result, a bankruptcy or insolvency court could seek to recover some or all amounts received by our shareholders. In addition,
our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith,
thereby exposing itself and us to claims of punitive damages, by paying public shareholders from the trust account prior to addressing
the claims of creditors.
If, before distributing the proceeds in the trust account
to our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is
filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders
and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust account to
our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed
against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or insolvency
law, and may be included in our bankruptcy or insolvency estate and subject to the claims of third parties with priority over
the claims of our shareholders. To the extent any bankruptcy or insolvency claims deplete the trust account, the per-share amount
that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
Our shareholders may be held liable for claims by third
parties against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an insolvent liquidation, any
distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the
date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business.
As a result, a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors may
be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing
themselves and our company to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors.
We cannot assure you that claims will not be brought against us for these reasons. We and our directors and officers who knowingly
and willfully authorized or permitted any distribution to be paid out of our share premium account while we were unable to pay
our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable for a fine of $18,292.68
and imprisonment for five years in the Cayman Islands.
We may not hold an annual general meeting until after the
consummation of our initial business combination.
In accordance with Nasdaq corporate governance requirements,
we are not required to hold an annual general meeting until one year after our first fiscal year end following our listing on
Nasdaq. There is no requirement under the Companies Law for us to hold annual or extraordinary general meetings to appoint directors.
Until we hold an annual general meeting, public shareholders may not be afforded the opportunity to appoint directors and to discuss
company affairs with management. Our board of directors is divided into three classes with only one class of directors being appointed
in each year and each class (except for those directors appointed prior to our first annual general meeting) serving a three-year
term.
Holders of Class A ordinary shares will not be entitled
to vote on any appointment of directors prior to our initial business combination.
Prior to our initial business combination, only holders of
our founder shares will have the right to vote on the appointment of directors. Holders of our public shares will not be entitled
to vote on the appointment of directors during such time. In addition, prior to our initial business combination, holders of a
majority of our founder shares may remove a member of the board of directors for any reason. Accordingly, you may not have any
say in the management of our company prior to the consummation of an 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 have not consummated our initial business combination within the required time period, our public shareholders may receive
only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our
detachable redeemable warrants will expire worthless and no distributable redeemable warrants will have been issued.
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 have not consummated our initial business combination within the required time period, our public shareholders
may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account
and our detachable redeemable warrants will expire worthless and no distributable redeemable warrants will have been issued.
Because we are neither limited to evaluating a target business
in a particular industry sector 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.
We may pursue business combination opportunities in any sector,
except that we will not, under our amended and restated memorandum and articles of association, be permitted to effectuate our
initial business combination solely with another blank check company or similar company with nominal operations. Because we have
not yet selected or approached any specific target business with respect to a business combination, there is no basis to evaluate
the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity,
financial condition or prospects. To the extent we 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 will endeavor to evaluate the risks
inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant
risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of
our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct
investment, if such opportunity were available, in a business combination target. Accordingly, any holders who choose to retain
their securities following the business combination could suffer a reduction in the value of their securities. Such holders are
unlikely to have a remedy for such reduction in value.
We may seek acquisition opportunities in industries or sectors
which may or may not be outside of our management’s area of expertise.
We will consider a business combination outside of our management’s
area of expertise if a business combination target is presented to us and we determine that such candidate offers an attractive
acquisition opportunity for our company. Although our management will endeavor to evaluate the risks inherent in any particular
business combination target, we cannot assure you that we will adequately ascertain or assess all of the significant risk factors.
We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in us than
a direct investment, if an opportunity were available, in a business combination target. In the event we elect to pursue an acquisition
outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable to its
evaluation or operation, and the information contained in this report regarding the areas of our management’s expertise
would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able
to adequately ascertain or assess all of the significant risk factors. Accordingly, any holders who choose to retain their securities
following the business combination could suffer a reduction in the value of their securities. Such 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 guidelines, such combination may not be as successful as a combination with a business that
does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target
that does not meet our general criteria and guidelines, a greater number of shareholders may exercise their redemption rights,
which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net
worth or a certain amount of cash. In addition, if shareholder approval of the transaction is required by applicable law or stock
exchange listing requirements, or we decide to obtain shareholder approval for business or other reasons, it may be more difficult
for us to attain shareholder approval of our initial business combination if the target business does not meet our general criteria
and guidelines. If we have not consummated our initial business combination within the required time period, our public shareholders
may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account
and our detachable redeemable warrants will expire worthless and no distributable redeemable warrants will have been issued.
We are not required to obtain an opinion from an independent
accounting or investment banking firm, and consequently, you may have no assurance from an independent source that the price we
are paying for the business is fair to our shareholders from a financial point of view.
Unless we complete our initial business combination with an
affiliated entity, we are not required to obtain an opinion from an independent investment banking firm or another independent
entity that commonly renders valuation opinions that the price we are paying is fair to our shareholders from a financial point
of view. If no opinion is obtained, our shareholders will be relying on the judgment of our board of directors, who will determine
fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our
proxy solicitation or tender offer materials, as applicable, related to our initial business combination.
We may reincorporate in another jurisdiction in connection
with our initial business combination, and such reincorporation may result in taxes imposed on shareholders.
We may, in connection with our initial business combination
and subject to requisite shareholder approval under the Companies Law, reincorporate in the jurisdiction in which the target company
or business is located or in another jurisdiction. The transaction may require a shareholder or warrant holder to recognize taxable
income in the jurisdiction in which the shareholder or warrant holder is a tax resident or in which its members are resident if
it is a tax transparent entity. We do not intend to make any cash distributions to shareholders or warrant holders to pay such
taxes.
Shareholders or warrant holders may be subject to withholding
taxes or other taxes with respect to their ownership of us after the reincorporation.
Risks Relating to our Sponsor and Management
Team
Our ability to successfully effect our initial business
combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may
join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability
of our post-combination business.
Our ability to successfully effect our initial business combination
is dependent upon the efforts of our key personnel. We believe that our success depends on the continued service of our key personnel,
at least until we have consummated our initial business combination. None of our officers are required to commit any specified
amount of time to our affairs and, accordingly, they will have conflicts of interest in allocating management time among various
business activities, including identifying potential business combinations and monitoring the related due diligence. If our officers’
and directors’ other business affairs require them to devote more substantial amounts of time to their other business activities,
it could limit their ability to devote time to our affairs and could have a negative impact on our ability to consummate our initial
business combination. In addition, we do not have employment agreements with, or key-man insurance on the life of, any of our
officers. The unexpected loss of the services of our key personnel could have a detrimental effect on us.
The role of our key personnel after our initial business combination,
however, remains to be determined. Although some of our key personnel serve in senior management or advisory positions following
our initial business combination, it is likely that most, if not all, of the management of the target business will remain in
place. These individuals may be unfamiliar with the requirements of operating a public company which could cause us to have to
expend time and resources helping them become familiar with such requirements. This could be expensive and time-consuming and
could lead to various regulatory issues which may adversely affect our operations.
We are dependent upon our executive officers and directors
and their loss could adversely affect our ability to operate.
Our operations are dependent upon a relatively small group
of individuals and, in particular, our executive officers and directors. We believe that our success depends on the continued
service of our officers and directors, at least until we have completed our initial business combination. In addition, our executive
officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts
of interest in allocating their time among various business activities, including identifying potential business combinations
and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any
of our directors or executive officers.
The unexpected loss of the services of one or more of our directors
or executive officers could have a detrimental effect on us.
Our 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 provide for them to receive compensation
following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether
a particular business combination is the most advantageous.
Our key personnel may be able to remain with 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. In addition, pursuant to an agreement to be entered into on or
prior to the closing of our IPO, our sponsor, upon and following consummation of an initial business combination, will be entitled
to nominate three individuals for appointment to our board of directors, as long as our sponsor holds any securities covered by
the registration and shareholder rights agreement filed as an exhibit to this report.
Since our sponsor, executive officers and directors will
lose their entire investment in us if our initial business combination is not completed (other than with respect to public shares
they may acquire), a conflict of interest may arise in determining whether a particular business combination target is appropriate
for our initial business combination.
On November 11, 2020, our sponsor paid $25,000, or approximately
$0.003 per share, to cover certain of our IPO and formation costs in consideration of 7,187,500 Class B ordinary shares, par value
$0.0001. On January 11, 2021, we effected a share capitalization resulting in our sponsor holding 7,500,000 Class B ordinary shares.
Prior to the initial investment in the company of $25,000 by our sponsor, the company had no assets, tangible or intangible. The
per-share price of the founder shares was determined by dividing the amount contributed to the company by the number of founder
shares issued. The founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor
has purchased 5,566,667 private placement warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share,
subject to adjustment, at a price of $1.50 per warrant ($8,350,000 in the aggregate). If we do not consummate an initial business
within 24 months from the closing of our IPO, the private placement warrants will expire worthless. The personal and financial
interests of our executive officers and directors may influence their motivation in identifying and selecting a target business
combination, completing an initial business combination and influencing the operation of the business following our initial business
combination. This risk may become more acute as the 24-month anniversary of the closing of our IPO nears, which is generally the
deadline for our consummation of an initial business combination.
Our executive officers and directors will allocate their
time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs.
This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our executive officers and directors are not required to, and
will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our
operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees
prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business
endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute
any specific number of hours per week to our affairs. Our independent directors also serve as officers and board members for other
entities. If our executive officers’ and directors’ other business affairs require them to devote substantial amounts
of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs
which may have a negative impact on our ability to complete our initial business combination.
Our officers and directors presently have, and any of them
in the future may have, additional, fiduciary or contractual obligations to other entities, including another blank check company,
and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Following the completion of our IPO and until we consummate
our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses
or entities. Each of our officers and directors presently has, and any of them in the future may have, additional fiduciary or
contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business
combination opportunity to such entity, subject to his or her fiduciary duties under Cayman Islands law. Accordingly, they may
have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts
may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation
to us, subject to their fiduciary duties under Cayman Islands law.
In addition, our Founder, sponsor, officers and directors may
in the future become affiliated with other blank check companies that may have acquisition objectives that are similar to ours.
Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
These conflicts may not be resolved in our favor and a potential target business may be presented to such other blank check companies
prior to its presentation to us, subject to our officers’ and directors’ fiduciary duties under Cayman Islands law.
Our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law:
(i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract,
to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii)
we renounce any interest or expectancy in, or being offering an opportunity to participate in, any potential transaction or matter
which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.
Our executive officers, directors, security holders and
their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits our directors,
executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment
to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. Nor do we have a policy
that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by
us. Accordingly, such persons or entities may have a conflict between their interests and ours.
The personal and financial interests of our directors and officers
may influence their motivation in timely identifying and selecting a target business and completing a business combination. Consequently,
our directors’ and officers’ discretion in identifying and selecting a suitable target business may result in a conflict
of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and
in our shareholders’ best interest. If this were the case, it would be a breach of their fiduciary duties to us as a matter
of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing on our shareholders’
rights. However, we might not ultimately be successful in any claim we may make against them for such reason.
We may engage in a business combination with one or more
target businesses that have relationships with entities that may be affiliated with our sponsor, executive officers or directors
which may raise potential conflicts of interest.
In light of the involvement of our sponsor, executive officers
and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, executive officers
or directors. Our directors also serve as officers and board members for other entities, including, without limitation, those
described under “Management—Conflicts of Interest.” Our Founder, sponsor, officers and directors may sponsor,
form or participate in other blank check companies similar to ours during the period in which we are seeking an initial business
combination. Such entities may compete with us for business combination opportunities. Our Founder, sponsor, officers and directors
are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with
which they are affiliated, and there have been no substantive discussions concerning a business combination with any such entity
or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we
would pursue such a transaction if we determined that such affiliated entity met our criteria and guidelines for a business combination
as set forth in “Proposed Business—Effecting Our Initial Business Combination—Evaluation of a Target Business
and Structuring of Our Initial 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 or another
independent entity that commonly renders valuation opinions 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, executive officers
or directors, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not
be as advantageous to our public shareholders as they would be absent any conflicts of interest.
Our sponsor controls a substantial interest in us and thus
may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support.
Our sponsor owns, on an as-converted basis, 20% of our issued
and outstanding ordinary shares. Accordingly, it may exert a substantial influence on actions requiring a shareholder vote, potentially
in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association.
If our sponsor purchases any additional Class A ordinary shares in the aftermarket or in privately negotiated transactions, this
would increase its control. Neither our sponsor nor, to our knowledge, any of our officers or directors, have any current intention
to purchase additional securities, other than as disclosed in this report. Factors that would be considered in making such additional
purchases would include consideration of the current trading price of our Class A ordinary shares. In addition, our board of directors,
whose members were appointed by our sponsor, is and will be divided into three classes, each of which will generally serve for
a term of three years with only one class of directors being appointed in each year. We may not hold an annual general meeting
to appoint new directors prior to the completion of our initial business combination, in which case all of the current directors
will continue in office until at least the completion of the business combination. If there is an annual general meeting, as a
consequence of our “staggered” board of directors, only a minority of the board of directors will be considered for
appointment and our sponsor, because of its ownership position, will control the outcome, as only holders of our Class B ordinary
shares will have the right to vote on the appointment of directors and to remove directors prior to our initial business combination.
In addition, the founder shares, all of which are held by our sponsor, will, in a vote to transfer the company by way of continuation
out of the Cayman Islands to another jurisdiction (which requires the approval of at least two thirds of the votes of all ordinary
shares), entitle the holders to ten votes for every founder share. This provision of our amended and restated memorandum and articles
of association may only be amended by a special resolution passed by a majority of at least two-thirds of our ordinary shares
voting in a general meeting. As a result, you will not have any influence over our continuation in a jurisdiction outside the
Cayman Islands prior to our initial business combination. Accordingly, our sponsor will continue to exert control at least until
the completion of our initial business combination. In addition, we have agreed not to enter into a definitive agreement regarding
an initial business combination without the prior consent of our sponsor.
Risks Relating to Our Securities
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 shareholders may be less than
$10.00 per share.
The net proceeds of our IPO and certain proceeds from the sale
of the private placement warrants, in the amount of $275,000,000, will be held in an interest-bearing trust account. The proceeds
held in the trust account may only be invested in direct U.S. Treasury obligations having a maturity of 185 days or less,
or in certain money market funds which invest only in direct U.S. 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 withdraw to pay income taxes, if any) would be reduced. In
the event that we are unable to complete our initial business combination, our public shareholders are entitled to receive their
pro-rata share of the proceeds held in the trust account, plus any interest income. If the balance of the trust account is reduced
below $275,000,000 as a result of negative interest rates, the amount of funds in the trust account available for distribution
to our public shareholders may be reduced below $10.00 per share.
If we are deemed to be an investment company under the Investment
Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may
make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company under the Investment
Company Act, our activities may be restricted, including:
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restrictions on
the nature of our investments; and
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restrictions on
the issuance of securities,
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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:
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registration as
an investment company with the SEC;
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adoption of a
specific form of corporate structure; and
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reporting, record
keeping, voting, proxy and disclosure requirements and other rules and regulations that
we are currently not subject to.
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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 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 securities are 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 either: (i) the completion of our initial business combination; (ii) the redemption of any
public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles
of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares
the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares
if we do not complete our initial business combination within 24 months from the closing of our IPO or (B) with respect to
any other provision relating to the rights of holders of our Class A ordinary shares; or (iii) absent our completing
an initial business combination within 24 months from the closing of our IPO, our return of the funds held in the trust account
to our public shareholders 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 complete a business combination. If we have not consummated our initial business combination within the required
time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances,
on the liquidation of our trust account, our detachable redeemable warrants will expire worthless and no distributable redeemable
warrants will have been issued.
If we seek shareholder approval of our initial business
combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders
are deemed to hold in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess
of 15% of our Class A ordinary shares.
If we seek shareholder approval of our initial business combination
and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our
amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of
such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under
Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of
the shares sold in our IPO, which we refer to as the “Excess Shares,” without our prior consent. However, we would
not be restricting our shareholders’ 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 shares in open market transactions, potentially at a loss.
Nasdaq may delist our securities from trading on its exchange,
which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
We have been approved to have our units listed on Nasdaq and
to have our Class A ordinary shares and detachable redeemable warrants listed on or promptly after their date of separation. Although
after giving effect to our IPO we expect to meet, on a pro forma basis, the minimum initial listing standards set forth in 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 share price levels, such as a minimum market capitalization (generally $50,000,000)
and a minimum number of holders of our securities (generally 400 public holders).
Additionally, our units will not be traded after completion
of our initial business combination and, in connection with our initial business combination, we will be required to demonstrate
compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements,
in order to continue to maintain the listing of our securities on Nasdaq. For instance, our share price would generally be required
to be at least $4.00 per share and our shareholder’s equity would generally be required to be at least $4.0 million. We
may not be able to meet those listing requirements at that time, especially if there are a significant number of redemptions in
connection with our initial business combination.
If Nasdaq delists our securities from trading on its exchange
and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on
an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
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a limited availability
of market quotations for our securities;
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reduced liquidity
for our securities;
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a determination
that our Class A ordinary shares are a “penny stock” which will require brokers
trading in our Class A ordinary shares to adhere to more stringent rules and possibly
result in a reduced level of trading activity in the secondary trading market for our
securities;
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a limited amount
of news and analyst coverage; and
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a decreased ability
to issue additional securities or obtain additional financing in the future.
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The National Securities Markets Improvement Act of 1996, which
is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as
“covered securities.” Because our units are and eventually our Class A ordinary shares and redeemable warrants will
be listed on Nasdaq, our units, Class A ordinary shares and redeemable warrants will qualify as covered securities under the statute.
Although the states are preempted 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 the statute and we would be subject to regulation in each state in which we offer our securities.
We may issue additional Class A ordinary shares or preference
shares to complete our initial business combination or under an employee incentive plan after completion of our initial business
combination. We may also issue Class A ordinary shares upon the conversion of the founder shares at a ratio greater than one-to-one
at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated
memorandum and articles of association. Any such issuances would dilute the interest of our shareholders and likely present other
risks.
Our amended and restated memorandum and articles of association
authorize the issuance of up to 500,000,000 Class A ordinary shares, par value $0.0001 per share, 50,000,000 Class B ordinary
shares, par value $0.0001 per share, and 5,000,000 preference shares, par value $0.0001 per share. There are 470,000,000 and 42,500,000
authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance which amount
does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion
of the Class B ordinary shares, if any. The Class B ordinary shares will automatically convert into Class A ordinary shares (which
such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions
from the trust account if we fail to consummate an initial business combination) at the time of our initial business combination
or earlier at the option of the holders thereof as described herein and in our amended and restated memorandum and articles of
association. There are no preference shares issued and outstanding.
We may issue a substantial number of additional Class A ordinary
shares or preference shares to complete our initial business combination or under an employee incentive plan after completion
of our initial business combination. We may also issue Class A ordinary shares in connection with our redeeming the warrants as
described in “Description of Securities—Warrants—Public Shareholders’ Warrants” or upon conversion
of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result
of the anti-dilution provisions as set forth herein. However, our amended and restated memorandum and articles of association
provide, among other things, that prior to or in connection with our initial business combination, we may not issue additional
shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business
combination or on any other proposal presented to shareholders prior to or in connection with the completion of an initial business
combination. These provisions of our amended and restated memorandum and articles of association,
like all provisions of our amended and restated memorandum
and articles of association, may be amended with a shareholder vote. The issuance of additional ordinary or preference shares:
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may significantly
dilute the equity interest of existing investors, which dilution would increase if the
anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class
A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary
shares;
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may subordinate
the rights of holders of Class A ordinary shares if preference shares are issued with
rights senior to those afforded our Class A ordinary shares;
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could cause a
change in control if a substantial number of Class A ordinary shares are issued, which
may affect, among other things, our ability to use our net operating loss carry forwards,
if any, and could result in the resignation or removal of our present officers and directors;
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may have the effect
of delaying or preventing a change of control of us by diluting the share ownership or
voting rights of a person seeking to obtain control of us;
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may adversely
affect prevailing market prices for our units, Class A ordinary shares and/or warrants;
and
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may not result
in adjustment to the exercise price of our warrants.
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We are not registering the Class A ordinary shares
issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration
may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its
warrants except on a cashless basis and potentially causing such warrants to expire worthless.
We are not registering the Class A ordinary shares issuable
upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of
the warrant agreement, we have agreed that, as soon as practicable, but in no event later than 20 business days after the closing
of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a registration statement
covering the issuance of such shares, and we will use our commercially reasonable efforts to cause the same to become effective
within 60 business days after the closing of our initial business combination and to maintain the effectiveness of such registration
statement and a current prospectus relating to those Class A ordinary shares 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 in accordance with the above requirements, we will be required
to permit holders to exercise their warrants on a cashless basis, in which case, the number of Class A ordinary shares that
you will receive upon cashless exercise will be based on a formula subject to a maximum amount of shares equal to 0.361 Class A
ordinary shares 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 ordinary shares are at the time of any exercise
of a warrant not listed on a national securities exchange such that they satisfy 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. Exercising the warrants on a cashless basis could have the effect of reducing the potential “upside”
of the holder’s investment in our company because the warrant holder will hold a smaller number of Class A ordinary
shares upon a cashless exercise of the warrants they hold. In no event will we be required to net cash settle any warrant, or
issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the
shares underlying the warrants under applicable state securities laws and no exemption is available. If the issuance of the shares
upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such
warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event,
holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the
Class A ordinary shares included in the units. 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 our public warrants. In such an instance, our sponsor and its permitted transferees (which may include our directors and executive
officers) would be able to exercise their warrants and sell the ordinary shares underlying their warrants while holders of our
public warrants would not be able to exercise their warrants and sell the underlying ordinary shares. 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 Class A
ordinary shares for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above
even if the holders are otherwise unable to exercise their warrants.
The warrants may become exercisable and redeemable for a
security other than the Class A ordinary shares, and you will not have any information regarding such other security at this
time.
In certain situations, including if we are not the surviving
entity in our initial business combination, the warrants may become exercisable for a security other than the Class A ordinary
shares. As a result, if the surviving company redeems your warrants for securities pursuant to the warrant agreement, you may
receive a security in a company of which you do not have information at this time. Pursuant to the warrant agreement, the surviving
company will be required to use commercially reasonable efforts to register the issuance of the security underlying the warrants
within twenty business days of the closing of an initial business combination.
If you elect to exercise your redemption rights with respect
to your Class A ordinary shares, you will not receive any distributable redeemable warrants.
In connection with our initial business combination, public
shareholders will have the opportunity to exercise their right to redeem their Class A ordinary shares. However, our distributable
redeemable warrants will be distributed only to the holders of record of those Class A ordinary shares that remain outstanding
after such redemptions. Accordingly, to the extent that you elect to redeem your Class A ordinary shares, you will receive no
distributable redeemable warrants in respect of such shares. The contingent right to receive distributable redeemable warrants
will remain attached to our Class A ordinary shares, will not be separately transferable, assignable or salable and will not be
evidenced by any certificate or instrument.
The grant of registration rights to our sponsor may make
it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the
market price of our Class A ordinary shares.
Pursuant to an agreement to be entered into on or prior to
the closing of our IPO, our sponsor and its permitted transferees can demand that we register the resale of the Class A ordinary
shares into which founder shares are convertible, the private placement warrants and the Class A ordinary shares issuable
upon exercise of the private placement warrants, and warrants that may be issued upon conversion of working capital loans and
the Class A ordinary shares issuable upon conversion of such warrants. The registration and availability of such a significant
number of securities for trading in the public market may have an adverse effect on the market price of our Class A ordinary
shares. In addition, the existence of the registration rights may make our initial business combination more costly or difficult
to conclude. This is because the shareholders of the target business may increase the equity stake they seek in the combined entity
or ask for more cash consideration to offset the negative impact on the market price of our securities that is expected when the
securities owned by our sponsor or its permitted transferees are registered for resale.
Unlike some other similarly structured blank check companies,
our sponsor will receive additional Class A ordinary shares if we issue shares to consummate an initial business combination.
The founder shares will automatically convert into Class A
ordinary shares (which such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled
to liquidating distributions from the trust account if we fail to consummate an initial business combination) at the time of our
initial business combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary
shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of
(i) the total number of our ordinary shares issued and outstanding, plus (ii) the total number of Class A ordinary
shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed
issued, by the company in connection with or in relation to the consummation of our initial business combination, excluding any
Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued,
deemed issued, or to be issued, to any seller in our initial business combination and any private placement warrants issued to
our sponsor, any of its affiliates or any members of our management team upon conversion of working capital loans. In no event
will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one. This is different
than some other similarly structured blank check companies in which our sponsor will only be issued an aggregate of 20% of the
total number of shares to be outstanding prior to our initial business combination.
We may amend the terms of the redeemable 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 redeemable warrants could be converted into
cash or Class A ordinary shares (at a ratio different than initially provided), the exercise period could be shortened and
the number of our Class A ordinary shares purchasable upon exercise of a warrant could be decreased, all without your approval.
Our redeemable warrants will be issued in registered form under
a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement
provides that the terms of the redeemable warrants may be amended without the consent of any holder for the purpose of (i) curing
any ambiguity or correcting any mistake, including to conform the provisions of the warrant agreement to the description of the
terms of the warrants and the warrant agreement set forth in the prospectus for our IPO, or defective provision (ii) amending
the provisions relating to cash dividends on ordinary shares as contemplated by and in accordance with the warrant agreement or
(iii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties
to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered
holders of the warrants, provided that the approval by the holders of at least 50% of the then-outstanding redeemable warrants
is required to make any change that adversely affects the interests of the registered holders of redeemable warrants. Accordingly,
we may amend the terms of the redeemable warrants in a manner adverse to a holder if holders of at least 50% of the then-outstanding
redeemable warrants approve of such amendment, and, solely with respect to any amendment to the terms of the private placement
warrants or any provision of the warrant agreement with respect to the private placement warrants, 50% of the number of the then
outstanding private placement warrants. Although our ability to amend the terms of the redeemable warrants with the consent of
at least 50% of the then-outstanding redeemable 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 Class A ordinary shares (at
a ratio different than initially provided), shorten the exercise period or decrease the number of Class A ordinary shares
purchasable upon exercise of a warrant.
Our warrant agreement will designate the courts of the State
of New York or the United States District Court for the Southern District of New York as the sole and exclusive
forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability
of warrant holders to obtain a favorable judicial forum for disputes with our company.
Our warrant agreement provides that, subject to applicable
law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including
under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District
Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction
shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction
and that such courts represent an inconvenient forum.
Notwithstanding the foregoing, these provisions of the warrant
agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for
which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity
purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented
to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope the forum provisions
of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District
Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants,
such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in
the State of New York 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 warrant holder in any such enforcement action by
service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
This choice-of-forum provision may limit a warrant holder’s
ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such
lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect
to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such
matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations
and result in a diversion of the time and resources of our management and board of directors.
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 the outstanding public warrants
at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that
the closing price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number
of shares issuable upon exercise or the exercise price of a warrant as described in the prospectus for our IPO under the heading
“Description of Securities—Warrants—Public Shareholders’ Warrants—Anti-dilution Adjustments”)
for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption
and provided that certain other conditions are met. 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 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 (i) exercise your warrants and pay the exercise
price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market
price when you might otherwise wish to hold your warrants or (iii) 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 the outstanding
public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant upon
a minimum of 30 days’ prior written notice of redemption provided that the closing price of our Class A
ordinary shares equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise
or the exercise price of a warrant as described in the prospectus for our IPO under the heading “Description of Securities—Warrants—Public
Shareholders’ Warrants—Anti-dilution Adjustments”) for any 20 trading days within a 30 trading-day period
ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions
are met, including that holders will be able to exercise their warrants prior to redemption for a number of Class A ordinary
shares determined based on the redemption date and the fair market value of our Class A ordinary shares. See the discussion
in the prospectus for our IPO under the heading “Description of Securities—Warrants—Public Shareholders’
Warrants—Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00.” The
value received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised
their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the
value of the warrants, including because the number of ordinary shares received is capped at 0.361 Class A ordinary shares
per warrant (subject to adjustment) irrespective of the remaining life of the warrants.
Our
warrants may have an adverse effect on the market price of our Class A ordinary
shares and make it more difficult to effectuate our initial business combination.
We have issued detachable redeemable warrants to purchase 5,000,000
Class A ordinary shares as part of the units offered in our IPO and 5,566,667 private placement warrants, each exercisable
to purchase one Class A ordinary share at $11.50 per share, subject to adjustment. In addition, if our sponsor, its affiliates
or a member of our management team makes any working capital loans, it may convert up to $2,000,000 of such loans into up to an
additional 1,333,333 private placement warrants, at the price of $1.50 per warrant. We may also issue Class A ordinary shares
in connection with our redemption of our warrants.
To the extent we issue ordinary shares for any reason, including
to effectuate a business combination, the potential for the issuance of a substantial number of additional Class A ordinary
shares upon exercise of these warrants could make us a less attractive acquisition vehicle to a target business. Such warrants,
when exercised, will increase the number of issued and outstanding Class A ordinary shares and reduce the value of the Class A
ordinary shares issued to complete the business transaction. Therefore, our warrants may make it more difficult to effectuate
a business transaction or increase the cost of acquiring the target business.
Because each unit contains one-sixth 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 contains one-sixth of one detachable redeemable warrant.
Pursuant to the warrant agreement, no fractional redeemable warrants will be issued upon separation of the units, and only whole
warrants will trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share,
we will, upon exercise, round down to the nearest whole number the number of Class A ordinary shares to be issued to the
warrant holder. In addition, although holders of Class A ordinary shares who elect not to redeem such shares in connection
with our initial business combination will also receive a distribution of redeemable warrants in the form of distributable redeemable
warrants, it may be that the number of distributable redeemable warrants issuable to any such holder, with or without any fractional
detachable redeemable warrants they may hold, will not constitute a whole warrant. This is different from other offerings similar
to ours whose units include one ordinary share 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 detachable redeemable warrants and the distributable redeemable 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 merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less
than if a unit included a warrant to purchase one whole share.
The market for our securities may not develop sufficiently
and remain sufficiently active, 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 outbreak.
An active trading market for our securities may never develop sufficiently or, if developed, it may not be sustained. You may
be unable to sell your securities unless a sufficiently active trading market can be sustained.
Provisions in our amended and restated memorandum and articles
of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our
Class A ordinary shares and could entrench management.
Our amended and restated memorandum and articles of association
contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests.
These provisions will include a staggered board of directors, the ability of the board of directors to designate the terms of
and issue new series of preference shares, and the fact that prior to the completion of our initial business combination only
holders of our Class B ordinary shares, which have been issued to our sponsor, are entitled to vote on the appointment 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.
Additional Risk Factors
We are a recently 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 recently incorporated company, incorporated under
the laws of the Cayman Islands with no operating results. Because we lack an operating history, you have no basis upon which to
evaluate our ability to achieve our business objective of completing our initial business combination with one or more target
businesses. We have no plans, arrangements or understandings with any prospective target business concerning a business combination
and may be unable to complete our initial business combination. If we fail to complete our initial business combination, we will
never generate any operating revenues.
Past performance by our management team or their respective
affiliates may not be indicative of future performance of an investment in us or in the future performance of any business we
may acquire.
Information regarding performance by, or businesses associated
with, our management team and their respective affiliates is presented for informational purposes only, including information
regarding the performance of Purple. Any past experience or performance of our management team and their respective affiliates
is not a guarantee of either (i) our ability to successfully identify and execute a transaction or (ii) success with respect to
any business combination that we may consummate. You should not rely on the historical record of our management team or their
respective affiliates as indicative of the future performance of an investment in us or the returns we will, or are likely to,
generate going forward.
Cyber incidents or attacks directed at us could result in
information theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies, including information systems,
infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and
deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties
or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential
data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected
against such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate
any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse
consequences on our business and lead to financial loss.
Since only holders of our founder shares will have the right
to vote on the appointment of directors, upon the listing of our shares on Nasdaq, Nasdaq may consider us to be a “controlled
company” within the meaning of Nasdaq rules and, as a result, we may qualify for exemptions from certain corporate governance
requirements.
Only holders of our founder shares will have the right to vote
on the appointment of directors. As a result, Nasdaq may consider us to be a “controlled company” within the
meaning of Nasdaq corporate governance standards. Under Nasdaq corporate governance standards, a company of which more than 50%
of the voting power is held by an individual, group or another company is a “controlled company” and may elect
not to comply with certain corporate governance requirements, including the requirements that:
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we have a board
that includes a majority of “independent directors,” as defined under
the rules of Nasdaq;
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we have a compensation
committee of our board that is comprised entirely of independent directors with a written
charter addressing the committee’s purpose and responsibilities; and
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we have a nominating
and corporate governance committee of our board that is comprised entirely of independent
directors with a written charter addressing the committee’s purpose and responsibilities.
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We do not intend to utilize these exemptions and intend to
comply with the corporate governance requirements of Nasdaq, subject to applicable phase-in rules. However, if we determine in
the future to utilize some or all of these exemptions, you will not have the same protections afforded to shareholders of companies
that are subject to all of Nasdaq corporate governance requirements.
We are subject to changing law and regulations regarding
regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.
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 rules and regulations by various national,
regional and local governments. In particular, we will be required to comply with rules and regulations of SEC, which is charged
with the protection of investors and the oversight of companies whose securities are publicly traded, as well as to new and evolving
regulatory measures under applicable law. Compliance with, and monitoring of, applicable laws and regulations may be difficult,
time consuming and costly. Our efforts to comply with new and changing laws and regulations could also result in a diversion of
management time and attention from seeking a business combination target.
Moreover, because these laws, regulations and standards are
subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This
evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions
to our disclosure and governance practices. Those changes could also have a material adverse effect on our business. 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. If we fail
to address and comply with applicable law and regulations and any subsequent changes, we may be subject to penalty and our business
may be harmed.
Compliance obligations under the Sarbanes-Oxley Act may
make it more difficult for us to effectuate a 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, 2021.
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 not be required to comply with the independent registered public accounting firm attestation requirement on our
internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of
the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target 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.
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 shareholder approval of any golden parachute
payments not previously approved. As a result, our shareholders may not have access to certain information they may deem important.
We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier,
including if the market value of our Class A ordinary shares held by non-affiliates equals or exceeds $700 million as of any June
30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot
predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors
find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may
be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of
our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging
growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that
a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth
companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period
which means that when a standard is issued or revised and it has different application dates for public or private companies,
we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised
standard. This may make comparison of our financial statements with another public company which is neither an emerging growth
company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because
of the potential differences in accounting standards used.
Additionally, we are a “smaller reporting company”
as defined in 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 aggregate worldwide market value of our ordinary shares held by non-affiliates
equals or exceeds $250 million as of the prior June 30, or (2) our annual revenues exceeded $100 million during such completed
fiscal year and the aggregate worldwide market value of our ordinary shares held by non-affiliates equals or exceeds $700 million
as of the prior June 30. 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.
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 company’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.
We may be a passive foreign investment company, or “PFIC,”
which could result in adverse U.S. federal income tax consequences to U.S. investors.
If we are a PFIC for any taxable year (or portion thereof)
that is included in the holding period of a U.S. Holder (as defined in the section of the prospectus for our IPO captioned “Taxation—United
States Federal Income Tax Considerations—General”) of our Class A ordinary shares or warrants, the U.S. Holder may
be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting requirements. Our PFIC status
for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception (see the section
of the prospectus for our IPO captioned “Taxation—United States Federal Income Tax Considerations—U.S. Holders—Passive
Foreign Investment Company Rules”). Depending on the particular circumstances, the application of the start-up exception
may be subject to uncertainty, and there cannot be any assurance that we will qualify for the start-up exception. Accordingly,
there can be no assurances with respect to our status as a PFIC for our current taxable year or any subsequent taxable year. Our
actual PFIC status for any taxable year, however, will not be determinable until after the end of such taxable year. Moreover,
if we determine we are a PFIC for any taxable year, upon written request, we will endeavor to provide to a U.S. Holder such information
as the Internal Revenue Service (“IRS”) may require, including a PFIC Annual Information Statement, in order to enable
the U.S. Holder to make and maintain a “qualified electing fund” election, but there can be no assurance that we will
timely provide such required information, and such election would be unavailable with respect to our warrants in all cases. We
urge U.S. investors to consult their tax advisors regarding the possible application of the PFIC rules.
An investment in our securities may result in uncertain
or adverse U.S. federal income tax consequences.
An investment in our securities may result in uncertain U.S.
federal income tax consequences. For instance, because there are no authorities that directly address instruments similar to our
units, the allocation an investor makes with respect to the purchase price of a unit between the Class A ordinary shares and the
one-sixth of a warrant to purchase one Class A ordinary share included in each unit could be challenged by the IRS or courts.
Furthermore, the U.S. federal income tax consequences of a cashless exercise of warrants included in our units is unclear under
current law. Finally, it is unclear whether the redemption rights with respect to our ordinary shares suspend the running of a
U.S. Holder’s (as defined in the prospectus for our IPO under “Taxation—United States Federal Income Tax Considerations—General”)
holding period for purposes of determining whether any gain or loss realized by such holder on the sale or exchange of Class A
ordinary shares is long-term capital gain or loss and for determining whether any dividend we pay would be considered a “qualified
dividend” for U.S. federal income tax purposes. See the section the prospectus for our IPO entitled “Taxation—United
States Federal Income Tax Considerations” for a summary of the U.S. federal income tax considerations of an investment in
our securities. Prospective investors are urged to consult their tax advisors with respect to these and other tax consequences
of purchasing, holding or disposing of our securities.
After our initial business combination, it is possible that
a majority of our directors and officers will live outside the United States and all of our assets will be located outside the
United States; therefore investors may not be able to enforce federal securities laws or their other legal rights.
It is possible that after our initial business combination,
a majority of our directors and officers will reside outside of the United States and all of our assets will be located outside
of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United States to enforce
their legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United States
courts predicated upon civil liabilities and criminal penalties on our directors and officers under United States laws.
Because we are incorporated under the laws of the Cayman
Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal
courts may be limited.
We are an exempted company incorporated under the laws of the
Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon our
directors or executive officers, or enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs will be governed by our amended and restated
memorandum and articles of association, the Companies Law (as the same may be supplemented or amended from time to time) and the
common law of the Cayman Islands. We will also be subject to the federal securities laws of the United States. The rights of shareholders
to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to
us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman
Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common
law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights
of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they
would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has
a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully
developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate
a shareholders derivative action in a Federal court of the United States.
We have been advised by Maples and Calder, our Cayman Islands
legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of
the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state;
and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability
provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions
are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained
in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court
of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes
upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For
a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum,
and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter,
impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural
justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to
public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
As a result of all of the above, public shareholders may have
more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or
controlling shareholders than they would as public shareholders of a United States company.
Risks Associated with Acquiring and
Operating a Business in Foreign Countries
If we pursue a target 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 initial business 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 we pursue a target 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 jurisdiction, having such transaction approved by any local governments, regulators or agencies
and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect 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:
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costs and difficulties
inherent in managing cross-border business operations;
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rules and regulations
regarding currency redemption;
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complex corporate
withholding taxes on individuals;
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laws governing
the manner in which future business combinations may be effected;
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exchange listing
and/or delisting requirements;
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tariffs and trade
barriers;
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regulations related
to customs and import/export matters;
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local or regional
economic policies and market conditions;
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unexpected changes
in regulatory requirements;
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tax issues, such
as tax law changes and variations in tax laws as compared to the United States;
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currency fluctuations
and exchange controls;
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challenges in
collecting accounts receivable;
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cultural and language
differences;
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employment regulations;
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underdeveloped
or unpredictable legal or regulatory systems;
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protection of
intellectual property;
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social unrest,
crime, strikes, riots and civil disturbances;
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regime changes
and political upheaval;
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terrorist attacks,
natural disasters and wars; and
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deterioration
of political relations with the United States.
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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 initial business combination, or, if we complete such combination,
our operations might suffer, either of which may adversely impact our business, financial condition and results of operations.
If our management following our initial business combination
is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such
laws, which could lead to various regulatory issues.
Following our initial business combination, our management
may resign from their positions as officers or directors of the company and the management of the target business at the time
of the business combination will remain in place. Management of the target business may not be familiar with United States
securities laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources
becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which
may adversely affect our operations.
After our initial business combination, substantially all
of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations in any
such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic,
political and social conditions 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.
We may reincorporate in another jurisdiction in connection
with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements
and we may not be able to enforce our legal rights.
In connection with our initial business combination, we may
relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine to do this, the
laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement of
existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The
inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business
opportunities or capital.
