Item
1. Business.
Introduction
We
are a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination with one or more businesses. We have neither engaged in any operations nor generated any operating revenue
to date. Based on our business activities, the Company is a “shell company” as defined under the Exchange Act because we
have no operations and nominal assets consisting almost entirely of cash.
Our
executive offices are located at Suite 201, 42 Edward Street, George Town, Grand Cayman, Cayman Islands and our telephone number is +1
(345) 749-7570. Our corporate website address is www.oxbridgeaq.com. Our website and the information contained on, or that can
be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this annual report.
You should not rely on any such information in making your decision whether to invest in our securities.
Company
History
On
April 12, 2021, our sponsor purchased an aggregate of 2,875,000 Class B ordinary shares (our “founder shares”) for an aggregate
purchase price of $25,000, or approximately $0.009 per share. Our Class B ordinary shares will automatically convert into Class A ordinary
shares, on a one-for-one basis, upon the completion of a business combination. The number of founder shares issued was based on the expectation
that the founder shares would represent 20% of the outstanding Class A ordinary shares and our Class B ordinary shares (collectively,
our “ordinary shares”) upon completion of our initial public offering (the “IPO”).
On
August 16, 2021, we consummated our IPO of 10,000,000 Units at $10.00 per Unit, generating gross proceeds of $100,000,000 and
incurring offering costs of approximately $6,624,000, inclusive of approximately $3,500,000 in deferred underwriting commissions. The
underwriter was granted a 45-day option from the date of the final prospectus relating to the initial public offering to purchase
up to 1,500,000 additional Units to cover over-allotments, if any, at $10.00 per Unit. On August 16, 2021, the underwriters exercised
the over-allotment option in full and, purchased an additional 1,500,000 Over-Allotment Units, generating additional gross proceeds of
$15,000,000, and incurring additional offering costs of $825,000, inclusive of approximately $525,000 of deferred underwriting commissions.
Each warrant entitles the holder thereof to purchase one share of Class A ordinary shares at a price of $11.50 per share, subject to
certain adjustments.
Simultaneously
with the closing of the IPO, we consummated the sale of 5,760,000 warrants to the sponsor and Maxim Group LLC
(“Maxim”), the underwriter in our initial public offering (the “private placement warrants”), at a
price of $1.00 per private placement warrant, generating gross proceeds of $5,760,000. An aggregate of $116,725,000
from the proceeds of the IPO and the private placement warrants was placed in a trust account (the “trust
account”) such that the trust account held $116,725,000 at the time of closing of the IPO. Each private placement
warrant is exercisable to purchase one Class A ordinary share at $11.50 per share, subject to certain adjustments.
On
September 30, 2021, we announced that, commencing October 1, 2021, holders of the 11,500,000 units sold in the IPO may elect to
separately trade the shares of Class A ordinary shares and the warrants included in the units. Those units not separated continued to
trade on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “OXACU” and the Class A ordinary shares and
warrants that were separated trade under the symbols “OXAC” and “OXACW,” respectively.
Our
units, Class A ordinary shares and warrants are registered under the Exchange Act and we have reporting obligations, including the requirement
that we file annual, quarterly and current reports with the SEC. The SEC’s website (http://www.sec.gov) contains such reports,
proxy and information statements and other information regarding issuers that file electronically with the SEC. In accordance with the
requirements of the Exchange Act, our annual reports contain financial statements audited and reported on by our independent registered
public accounting firm.
Effecting
a Business Combination
Our
Business Strategy
We
believe that the blockchain technology, artificial intelligence and insurtech sectors are highly fragmented and evolving quickly. Our
business strategy is to identify and consummate an initial business combination with a disruptive and differentiated technology company
that focuses on blockchain technology, artificial intelligence or insurtech technologies. We will seek to acquire established businesses
that we believe are fundamentally sound but potentially in need of financial, operational, strategic or managerial redirection to maximize
value. We may also look at earlier stage companies that exhibit the potential to change the industries in which they participate and
which will offer the potential of sustained high levels of revenue growth and path to profitability.
We
intend to employ a thematic acquisition strategy, and are focused on long-term shareholder value growth and building a leading franchise.
Our strategy is to:
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target a company with disruptive and differentiated technology;
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fully leverage the industry experience and broad network of our executive officers, board members and advisors to identify potential
investment opportunities and successfully execute acquisition transactions;
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deliver creative approaches to transaction sourcing, while exercising pricing discipline; and
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utilize an understanding of global financial markets and events, financing, restructuring and overall corporate strategy options.
Our
business combination strategy will leverage the following attributes of our management team:
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Broad network, proprietary contacts, corporate relationships including financing providers and investment market participants, private
equity groups, investment banks, accounting firms, target management teams and companies or individuals that represent sellers);
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Industry experience developed through operating, managing, marketing and growing businesses in the insurance industry;
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Investing and building companies in the insurance and InsurTech sector with unique market insights;
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Substantial experience in navigating the challenges of operating public companies; and
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Engaging with public market analysts and investors to help companies better communicate their business model, opportunity and strategy
to maximize value for their shareholders.
In
addition to assisting in the sourcing of a potential transaction, members of our management team may join the acquired company as a board
member or in a senior executive capacity or assist in the operation of the acquired company in order to enhance shareholder value by
improving the operational performance of the combined company and undertaking broader strategic initiatives.
Business
Combination Criteria
Our
intent is to seek potential target businesses globally. The maturity and judgment of our team will guide our acquisition process. When
potential targets are being evaluated, we expect to use the following, non-exclusive criteria listed below for determining opportunities.
We will use these criteria when evaluating business combination opportunities, but we may decide to enter into our initial business combination
with a target business that does not meet all or some of these criteria:
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Is
Established and of Sufficient Scale. We will seek to acquire an established business with an enterprise value suitable for
the size of our company, and without excessive leverage. |
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Has
a Defensible Market Position. We will seek to acquire a business that has a defensible position within a target market as
a result of a differentiated technology, distribution capabilities, customer service or other competitive advantages. |
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Generates
Stable Free Cash-Flow. We will seek to acquire a business that has historically generated, or has the near-term potential
to generate, strong and sustainable free cash flow. |
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Is
Sourced Through our Proprietary Channels. We expect to acquire a business that we source by leveraging the extensive network
of our management team and do not expect to participate in broadly marketed processes. |
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Can
Benefit from our Capabilities. We will seek to acquire a business whose performance and operations can benefit from the collective
capabilities of our sponsor, founders and management team and their expertise to tangibly improve the operations and market position
of the target, including improving operations with enhanced managing capabilities and growing InsurTech and disruptive blockchain
companies. |
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Has
a Committed and Capable Management Team. We will seek to acquire a business with a professional management team whose interests
are aligned with those of our shareholders and complement the expertise of our management team. Where necessary, we may also look
to complement and enhance the capabilities of the target business’s management team by recruiting additional talent through
our network of contacts. |
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Has
the Potential to Grow Through Further Acquisition Opportunities. We will seek to acquire a business that has the potential
to grow through additional acquisitions. |
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Has
publicly traded peers. We will seek to acquire a business that has publicly traded comparable companies that operate in a
similar industry sector or which have similar operating metrics which may help establish that the valuation of our initial business
combination is attractive relative to such public peers; |
These
criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be
based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management
may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet
the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder communications
related to our initial business combination, which, would be in the form of proxy solicitation materials or tender offer documents that
we would file with the Securities and Exchange Commission, or SEC.
Additional
Disclosures
Our
Acquisition Process
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 to
such entity. Accordingly, if any of our directors or officers 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 may need to honor these fiduciary or contractual
obligations to present such business combination opportunity to such entity, subject to his or her fiduciary duties under Cayman Islands
law. We do not believe, however, that the fiduciary duties or contractual obligations of our directors or officers will materially affect
our ability to identify and pursue business combination opportunities or complete our initial business combination.
Initial
Business Combination
Nasdaq
rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value
of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable) at the time of our signing
a definitive agreement in connection with our initial business combination. We refer to this as the 80% of net assets test. If our Board
of Directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion
from an independent investment banking firm or another independent firm that commonly renders valuation opinions for the type of company
we are seeking to acquire or an independent accounting firm. We do not intend to purchase multiple businesses in unrelated industries
in conjunction with our initial business combination. Additionally, pursuant to Nasdaq rules, any initial business combination must be
approved by a majority of our independent directors. Our amended and restated memorandum and articles of association will also provide
that any initial business combination must be approved by at least 75% of our Board of Directors.
We
anticipate structuring our initial business combination so that the post-transaction company in which our public shareholders own shares
will own or acquire 100% of the issued and outstanding equity interests or assets of the target business or businesses. We may, however,
structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or
assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons,
but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding
voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required
to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 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-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example,
we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the issued and outstanding
capital stock, shares or other equity securities of a target business or issue a substantial number of new shares to third-parties in
connection with financing our initial business combination. 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 issued and outstanding shares subsequent to our initial business combination. If less
than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company,
the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% fair market value
test. If our initial business combination involves more than one target business, the 80% fair market value test will be based on the
aggregate value of all of the target businesses.
Extension
of Time to Complete Business Combination
We will have until
November 16, 2022 to consummate an initial business combination. However, if we anticipate that we may not be able to consummate our
initial business combination by November 16, 2022, we will, by resolution of our Board of Directors if requested by our sponsor, extend
the period of time to consummate a business combination by an additional three months up to twice (for a total of 21 months through May
16, 2023 to complete a business combination), (each an “Extension Period”), subject to the sponsor depositing additional
funds into the trust account as set out below. In connection with any such extension, public shareholders will not be offered the opportunity
to vote on or redeem their shares. Pursuant to the terms of our amended and restated memorandum and articles of association and the trust
agreement to be entered into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, in order to
extend the time available for us to consummate our initial business combination for an additional three months, our sponsor or its affiliates
or designees must deposit into the trust account $ $1,150,000 on or prior to the date of the deadline. We will only be able to extend
the period of time to consummate a business combination by an additional three months twice (for a total of six months). We will issue
a press release announcing each extension, at least three days prior to the deadline. In addition, we will issue a press release the
day after the deadline, announcing whether the funds have been timely deposited. Our sponsor and its affiliates or designees are obligated
to fund the trust account in order to extend the time for us to complete our initial business combination, but our sponsor will not be
obligated to extend such time.
Facilities
We
maintains our principal executive offices
at Suite 201, 42 Edward Street, George Town, Grand Cayman, Cayman Islands. We pays our sponsor $10,000 per month for office
space, administrative and support services pursuant to the terms of an administrative services agreement between us and our
sponsor. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly
fees. We considers our current office space 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 has completed our initial business combination. The amount of time
that any such person will devote in any time period to our company will vary based on whether a target business has been selected for
our initial business combination and the current stage of the business combination process. We do not intend to have any
full-time employees prior to the consummation of an initial business combination.
Competition
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. Additionally, the number of blank check
companies looking for business combination targets has increased compared to recent years and many of these blank check companies are
sponsored by entities or persons that have significant experience with completing business combinations. While we believe there are numerous
target businesses we could potentially acquire with the net proceeds from our initial public offering and private placement
warrants, if we have not completed our initial business combination within the required time period, our public shareholders may
receive only approximately $10.15 per share, or less in certain circumstances, on the liquidation of our trust account and our
warrants will expire worthless.
Emerging
Growth Company
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 Jumpstart our
Business Startups Act of 2012, (the “JOBS Act”), and 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 its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory
vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such election to opt out is irrevocable.
We
have elected not to opt out of such extended transition
period which means that when a standard is issued or revised and it has different application dates for public or private companies,
we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised
standard. This may make comparison of our financial statements with another public company which is neither an emerging growth
company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of
the potential differences in accounting standards used.
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 initial public offering, or December 31, 2026, (b) in which we have total annual gross revenue of at
least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares
that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the
date on which we have issued more than $1.00 billion in non-convertible debt during the prior three-year period.
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 Annual Report, including our financial statements and related notes, and the prospectus
relating to our IPO, 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. The risks and uncertainties described below are not the only ones we face. Additional
risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that
adversely affect our business, financial condition and operating results.
Summary
of Risk Factors
Our
business is subject to numerous risks and uncertainties. These risks include, but are not limited to, risks associated
with:
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being
a newly incorporated exempted company without an operating history; |
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our
ability to continue as a “going concern;” |
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delay
in receiving distributions from the trust account; |
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lack
of opportunity to vote on our proposed business combination; |
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lack
of protections afforded to investors of blank check companies; |
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issuance
of equity and/or debt securities to complete a business combination; |
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lack
of working capital; |
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third-party
claims reducing the per-share redemption price; |
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negative
interest rate for securities in which we may invest the funds held in the trust account; |
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our
shareholders being held liable for claims by third parties against us; |
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failure
to enforce our sponsor’s indemnification obligations; |
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warrant
holders limited to exercising warrants only on a “cashless basis;” |
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the
ability of warrant holders to obtain a favorable judicial forum for disputes with our company; |
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dependence
on key personnel; |
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conflicts
of interest of our sponsor, officers and directors; |
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the
delisting of our securities by Nasdaq; |
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dependence
on a single target business with a limited number of products or services; |
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our
shareholders’ inability to vote or redeem their shares in connection with our extensions; |
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shares
being redeemed and warrants becoming worthless; |
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our
competitors with advantages over us in seeking business combinations; |
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ability
to obtain additional financing; |
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our
initial shareholders controlling a substantial interest in us; |
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warrants
adverse effect on the market price of our ordinary shares; |
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disadvantageous
timing for redeeming warrants; |
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registration
rights’ adverse effect on the market price of our ordinary shares; |
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impact
of COVID-19 and related risks; |
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business
combination with a company located in a foreign jurisdiction; |
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changes
in laws or regulations; |
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tax consequences to business combinations; and |
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exclusive
forum provisions in our amended and restated memorandum and articles of association. |
RISKS
RELATING TO OUR SEARCH FOR, CONSUMMATION OF, OR INABILITY TO CONSUMMATE, A BUSINESS COMBINATION AND POST-BUSINESS COMBINATION RISKS
Our
public shareholders may not be afforded an opportunity to vote on our proposed business combination, which means we may complete our
initial business combination even though a majority of our public shareholders do not support such a combination.
We
may not hold a shareholder vote to approve our initial business combination unless the business combination would require shareholder
approval under applicable Cayman Islands law or the rules of Nasdaq or if we decide to hold a shareholder vote for business or other
reasons. Examples of transactions that would not ordinarily require shareholder approval under Cayman Islands law or the rules of Nasdaq
include asset acquisitions and capital stock or share purchases, while transactions such as direct mergers with our company or transactions
where we issue more than 20% of our outstanding shares would require shareholder approval. For instance, Nasdaq rules currently allow
us to engage in a tender offer in lieu of a general meeting but would still require us to obtain shareholder approval if we were seeking
to issue more than 20% of our outstanding shares to a target business as consideration in any business combination. Therefore, if we
were structuring a business combination that required us to issue more than 20% of our outstanding shares, we would seek shareholder
approval of such business combination. Except as required by applicable law or Nasdaq rules, the decision as to whether we will seek
shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will
be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether
the terms of the transaction would otherwise require us to seek shareholder approval. Accordingly, we may consummate our initial business
combination even if holders of a majority of the issued and outstanding ordinary shares do not approve of the business combination we
consummate.
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 we decide to obtain shareholder approval for business or other legal 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 are unable
to complete our initial business combination, our public shareholders may receive only approximately $10.15 per share on the liquidation
of our trust account and our warrants will expire worthless.
Your
only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your
right to redeem your shares from us for cash, unless we seek shareholder approval of the business combination.
At
the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of one or more
target businesses. Since our Board of Directors may 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, if
we do not seek shareholder approval, your only opportunity to affect the investment decision regarding a potential business combination
may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in
our tender offer documents mailed to our public shareholders in which we describe our initial business combination.
Because
of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete
our initial business combination. If we are unable to complete our initial business combination, our public shareholders may receive
only approximately $10.15 per share, or less in certain circumstances, on our redemption, and our warrants will expire worthless.
We
expect to encounter intense competition from other entities having a business objective similar to ours, including private investors
(which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing
for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience
in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries.
Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial
resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target
businesses we could potentially acquire with the net proceeds of our initial public offering and the sale of the private placement warrants,
our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available
financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses.
Furthermore, if we are obligated to pay cash for the Class A ordinary shares redeemed and, in the event we seek shareholder approval
of our initial business combination, we make purchases of our Class A ordinary shares, the resources available to us for our initial
business combination may be reduced. Any of these obligations may place us at a competitive disadvantage in successfully negotiating
a business combination. If we are unable to complete our initial business combination, our public shareholders may receive only approximately
$10.15 per share (or less in certain circumstances) on the liquidation of our trust account and our warrants will expire worthless. In
certain circumstances, our public shareholders may receive less than $10.15 per share on the redemption of their shares. See “—
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount
received by shareholders may be less than $10.15 per share” and other risk factors herein.
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.
The
ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business
combination targets, which may make it difficult for us to enter into a business combination with a target.
We
may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that
we have a minimum net worth or a certain amount of cash. If too many public shareholders exercise their redemption rights, we would not
be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. Furthermore, we
will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately
prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (so that
we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may
be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption
requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition,
each 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 we will need to structure the transaction based on our expectations as to the number of shares that will be submitted
for redemption. If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the
purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust
account to meet such requirements, or arrange for third party financing. In addition, if a larger number of shares are submitted for
redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust
account or arrange for third party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence
of indebtedness at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provisions
of the Class B ordinary shares result in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of
the Class B shares at the time of the initial business combination. The above considerations may limit our ability to complete the most
desirable business combination available to us or optimize our capital structure.
The
ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability
that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If
our 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 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 complete our initial business combination within the prescribed time frame may give potential target businesses leverage
over us in negotiating a business combination and may decrease our ability to conduct due diligence on potential business combination
targets 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 complete
our initial business combination by November 16, 2022 or any Extension Period. 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 timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial
business combination on terms that we would have rejected upon a more comprehensive investigation.
We
may not be able to complete our initial business combination within the prescribed time frame, in which case we would cease all operations
except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public shareholders may only
receive approximately $10.15 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
Our
initial shareholder, officers and directors have agreed that we must complete by November 16, 2022 or during any Extension Period.
We may not be able to find a suitable target business and complete our initial business combination within such time period. If we have
not completed our initial business combination within such 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 any interest (which interest shall
be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public
shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive
further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of our remaining shareholders and our Board of Directors, liquidate and dissolve, subject in each case to our
obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such case, our
public shareholders may only receive approximately $10.15 per share, and our warrants will expire worthless. In certain circumstances,
our public shareholders may receive less than $10.15 per share on the redemption of their shares. See “— If third parties
bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders
may be less than $10.15 per share” and other risk factors herein.
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.
In
December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout
China and other parts of 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”.
A significant outbreak of COVID-19 and other infectious diseases has resulted in a widespread health crisis, which has adversely affected
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 restrict travel, limit the ability to have meetings with potential investors or the target company’s
personnel, vendors or service 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.
If
we seek shareholder approval of our initial business combination, our initial shareholder, directors, officers, advisors and their affiliates
may elect to purchase shares from public shareholders, which may influence a vote on a proposed business combination and reduce the public
“float” of our 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 initial shareholder, directors, officers, advisors or their respective affiliates,
may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial
business combination, although they are under no obligation to do so. Such a purchase may include a contractual acknowledgement that
such shareholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to
exercise its redemption rights. In the event that our initial shareholders, directors, officers, or their respective affiliates purchase
shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such
selling shareholders would be required to revoke their prior elections to redeem their shares. The price per share paid in any such transaction
may be different than the amount per share a public shareholder would receive if it elected to redeem its shares in connection with our
initial business combination. The purpose of such purchases could be to vote such shares in favor of the business combination and thereby
increase the likelihood of obtaining shareholder approval of the business combination or to satisfy a closing condition in an agreement
with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,
where it appears that such requirement would otherwise not be met. This may result in the completion of our initial business combination
that may not otherwise have been possible.
In
addition, if such purchases are made, the public “float” of our ordinary shares and the number of beneficial holders of our
securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on
a national securities exchange.
If
a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or
fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We
will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial business
combination. Despite our compliance with these rules, if a shareholder fails to receive our tender offer or proxy materials, as applicable,
such shareholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials,
as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe
the various procedures that must be complied with in order to validly tender or redeem public shares. In the event that a shareholder
fails to comply with these procedures, its shares may not be redeemed.
You
will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your
investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss.
Our public shareholders will be entitled to receive
funds from the trust account only upon the earlier to occur of: (i) the completion of our initial business combination, (ii) the redemption
of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles
of association (A) to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection
with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by
November 16, 2022 or during any Extension Period, or (B) with respect to any other provision relating to shareholders’ rights
or pre-initial business combination activity and (iii) the redemption of all of our public shares if we are unable to complete our initial
business combination by November 16, 2022 or during any Extension Period, subject to applicable law and as further described herein.
In no other circumstances will a public shareholder have any right or interest of any kind in the trust account. 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.
You
are not entitled to protections normally afforded to investors of many other blank check companies.
Because
we had net tangible assets in excess of $5,000,000 upon the successful completion of our initial public offering and the private
placement and filed a Current Report on Form 8-K, including an audited balance sheet of the company demonstrating this fact, we are
exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors are
not afforded the benefits or protections of those rules. Among other things, this means we will have a longer period of time to complete
our initial business combination than do companies subject to Rule 419. Moreover, if our initial public offering was subject to
Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until
the funds in the trust account were released to us in connection with our completion of an initial business combination.
If
the net proceeds of our initial public offering and the sale of private placement warrants that not being held in the trust account
are insufficient to allow us to operate for at least through to November 16, 2022 (or through a 3 or 6-month extension period),
we may be unable to complete our initial business combination.
The
funds available to us outside of the trust account may not be sufficient to allow us to operate for at least through November 16,
2022 (or 3 or 6 months thereafter), assuming that our initial business combination is not completed during that
time. We expect to incur significant costs in pursuit of our acquisition plans. Management’s plans to address this need for capital
through our initial public offering and potential loans from certain of our affiliates. However, our affiliates are not obligated
to make loans to us in the future, and we may not be able to raise additional financing from unaffiliated parties necessary to fund our
expenses. Any such event in the future may negatively impact the analysis regarding our ability to continue as a going concern at such
time.
We
believe that the funds available to us outside of the trust account will be sufficient to allow us to operate for at through to November
16, 2022; however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could use a portion of the
funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the
funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses
from “shopping” around for transactions with other companies on terms more favorable to such target businesses) with respect
to a particular proposed business combination, although we do not have any current intention to do so. If we entered into a letter of
intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds
(whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence
with respect to, a target business. If we are unable to complete our initial business combination, our public shareholders may receive
only approximately $10.15 per share (or less in certain circumstances) on the liquidation of our trust account and our warrants will
expire worthless. In certain circumstances, our public shareholders may receive less than $10.15 per share on the redemption of their
shares.
If
the net proceeds of the initial public offering and the sale of the private placement warrants not being held in the trust account are
insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial business
combination and we will depend on loans from our initial shareholders or management team to fund our search and to complete our initial
business combination.
If
we are required to seek additional capital, we would need to borrow funds from our initial shareholders, management team or other third
parties to operate or may be forced to liquidate. Neither our initial shareholders, members of our management team nor any of their affiliates
is under any obligation to advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside
the trust account or from funds released to us upon completion of our initial business combination. If we are unable to complete our
initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate
the trust account. Consequently, our public shareholders may only receive approximately $10.15 per share (or less in certain circumstances)
on our redemption of our public shares, and our warrants will expire worthless. In such case, our public shareholders may only receive
$10.15 per share, and our warrants will expire worthless.
Subsequent
to the 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 our share price,
which could cause you to lose some or all of your investment.
Even
if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will surface
all material issues that may be present inside a particular target business, that it would be possible to uncover all material issues
through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later
arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment
or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected
risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though
these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature
could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate
net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue
of our obtaining post-combination debt financing. Accordingly, any shareholders who choose to remain shareholders following the business
combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction
in value.
If
third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received
by shareholders may be less than $10.15 per share.
Our
placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to have all
vendors, service providers (other than our independent registered accounting firm), prospective target businesses or other entities with
which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the
trust account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute such
agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement,
breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case
in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third-party
refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis
of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management
believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
Examples
of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant
whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would
agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition,
there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of,
any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption
of our public shares, if we are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise
of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors
that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount
received by public shareholders could be less than the $10.15 per share initially held in the trust account, due to claims of such creditors.
Our
sponsor has agreed that it will be liable to us if and to the extent any claims by a vendor (other than our independent registered 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 amount of funds in the trust account to below (i) $10.15 per public share or (ii) such lesser amount per public
share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets,
in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver
of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of our
initial public offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed
waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such
third party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy their indemnity obligations
and believe that our sponsor’s only assets are securities of our company. Our sponsor may not have sufficient funds available to
satisfy those obligations. We have not asked our sponsor to reserve for such obligations, and therefore, no funds are currently set aside
to cover any such obligations. As a result, if any such claims were successfully made against the trust account, the funds available
for our initial business combination and redemptions could be reduced to less than $10.15 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) $10.15 per public share or (ii) such lesser amount
per share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust
assets, in each case net of the interest which may be withdrawn to pay taxes, and 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, who are also members
of our sponsor, 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. 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 $10.15 per share.
If,
after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary
bankruptcy or winding-up petition is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such
proceeds, and the members of our Board of Directors may be viewed as having breached their fiduciary duties to our creditors, thereby
exposing the members of our Board of Directors and us to claims of punitive damages.
If,
after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary
bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed
under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent
conveyance.” As a result, a bankruptcy or insolvency court could seek to recover all amounts received by our shareholders. In addition,
our Board of Directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby
exposing itself and us to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims
of creditors.
If,
before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary
bankruptcy or winding-up petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority
over the claims of our shareholders and the per-share amount that would otherwise be received by our shareholders in connection with
our liquidation may be reduced.
If,
before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary
bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject
to applicable bankruptcy 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, and thereby exposing themselves and our company to claims, by paying public shareholders from the trust account prior to addressing
the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons. We and our directors and
officers who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium account while we were
unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable to a fine
of up to $18,292 and to imprisonment for five years in the Cayman Islands.
We
may not hold an annual general meeting until after the consummation of our initial business combination. Our public shareholders will
not have the right to appoint directors prior to the consummation of our initial business combination.
In
accordance with Nasdaq corporate governance requirements, we are not required to hold an annual general meeting until no later than one
full year after our first fiscal year end following our listing on Nasdaq. There is no requirement under the Companies Act for us to
hold annual or extraordinary general meetings in order to appoint directors. Until we hold an annual general meeting, public shareholders
may not be afforded the opportunity to discuss company affairs with management. In addition, prior to our initial business combination,
only holders of our founder shares will have the right to vote on the appointment of our directors. Our initial shareholders have agreed
that, subject to applicable law, neither of our initial shareholders will vote their founder shares to change the size of our board of
directors or, without the others’ consent, with respect to appointment of directors. As holders of our Class A ordinary shares,
our public shareholders will not have the right to vote on the appointment of directors prior to consummation of our initial business
combination.
Because
we are not limited to a particular industry or any specific target businesses with which to pursue our initial business combination,
you will be unable to ascertain the merits or risks of any particular target business’s operations.
We
may pursue acquisition opportunities in any one of numerous industries, except that we will not, under our amended and restated memorandum
and articles of association, be permitted to effectuate our business combination with another blank check company or similar company
with nominal operations. Because we have not yet identified 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’ operations, results of operations,
cash flows, liquidity, financial condition or prospects. To the extent we complete our 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 an early 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 shareholders who choose to remain shareholders following the business combination
could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction in value unless
they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other
fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the tender offer materials
or proxy statement relating to the business combination contained an actionable material misstatement or material omission.
We
may seek acquisition opportunities in industries or sectors that may be outside of our management’s areas of expertise.
We
will consider a business combination outside of our management’s areas of expertise if a business combination candidate is presented
to us and we determine that such candidate offers an attractive acquisition opportunity for our company. In the event we elect to pursue
an acquisition outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable
to its evaluation or operation, and the information contained in this Annual Report on Form 10-K regarding the areas of
our management’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our
management may not be able to adequately ascertain or assess all of the significant risk factors. Accordingly, any shareholders who choose
to remain shareholders following our initial business combination could suffer a reduction in the value of their shares. Such shareholders
are unlikely to have a remedy for such reduction in value.
We
may seek acquisition opportunities with a financially unstable business or an entity lacking an established record of revenue or earnings.
To
the extent we complete our initial business combination with a financially unstable business or an entity lacking an established record
of sales or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks
include volatile revenues or earnings and difficulties in obtaining and retaining key personnel. Although our officers and directors
will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all
of the significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be
outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target
business.
We
are not required to obtain an opinion from an independent investment banking or from an independent registered public accounting firm,
and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our company
from a financial point of view.
Unless
we complete our business combination with an affiliated entity, or our Board of Directors cannot independently determine the fair market
value of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm or another
independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or from an independent accounting
firm that the price we are paying for a target is fair to our company from a financial point of view. If no opinion is obtained, our
shareholders will be relying on the judgment of our Board of Directors, who will determine fair market value based on standards generally
accepted by the financial community. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials,
as applicable, related to our initial business combination. However, if our Board of Directors is unable to determine the fair value
of an entity with which we seek to complete an initial business combination based on such standards, we will be required to obtain an
opinion as described above.
Because
we must furnish our shareholders with target business financial statements, we may lose the ability to complete an otherwise advantageous
initial business combination with some prospective target businesses.
The
federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance
tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement
disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial
statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United
States of America, or U.S. GAAP, or international financing reporting standards as issued by the International Accounting Standards Board,
or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the
standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit
the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to
disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time
frame.
Compliance
obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial
financial and management resources, and increase the time and costs of completing an acquisition.
Section
404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report
on Form 10-K for the year ending December 31, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated
filer will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control
over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent
registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank
check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public
companies because a target company with which we seek to complete our 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 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
do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete
a business combination with which a substantial majority of our shareholders do not agree.
Our
amended and restated memorandum and articles of association will not provide a specified maximum redemption threshold, except that we
will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately
prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (such
that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which
may be contained in the agreement relating to our initial business combination. As a result, we may be able to complete our 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
initial shareholders, directors, officers or advisors, or their respective affiliates. In the event the aggregate cash consideration
we would be required to pay for all 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 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 modified governing instruments. We cannot assure you that we will not seek to amend our amended and restated memorandum
and articles of association or governing instruments in a manner that will make it easier for us to complete our initial business combination
that our shareholders may not support.
In
order to effectuate a business combination, blank check companies have, in the past, amended various provisions of their charters and
modified governing instruments. For example, blank check companies have amended the definition of business combination, increased redemption
thresholds and extended the period of time in which it had to consummate a business combination. We cannot assure you that we will not
seek to amend our amended and restated memorandum and articles of association or governing instruments or extend the time in which we
have to consummate a business combination through amending our amended and restated memorandum and articles of association will require
at least a special resolution of our shareholders as a matter of Cayman Islands law.
The
provisions of our amended and restated memorandum and articles of association that relate to our pre-initial business combination activity
(and corresponding provisions of the agreement governing the release of funds from our trust account), including an amendment to permit
us to withdraw funds from the trust account such that the per share amount investors will receive upon any redemption or liquidation
is substantially reduced or eliminated, may be amended with the approval of holders of at least two-thirds of our ordinary shares who
attend and vote in a general meeting, which is a lower amendment threshold than that of some other blank check companies. It may be easier
for us, therefore, to amend our amended and restated memorandum and articles of association and the trust agreement to facilitate the
completion of an initial business combination that some of our shareholders may not support.
Some
other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those
which relate to a company’s pre-initial business combination activity, without approval by a certain percentage of the company’s
shareholders. In those companies, amendment of these provisions requires approval by between 90% and 100% of the company’s public
shareholders. Our amended and restated memorandum and articles of association provide that any of its provisions, including those
related to pre-initial business combination activity (including the requirement to deposit proceeds of our initial public offering 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 and in our amended and restated memorandum and articles of association or
an amendment to permit us to withdraw funds from the trust account such that the per share amount investors will receive upon any redemption
or liquidation is substantially reduced or eliminated), but excluding the provision of the articles relating to the appointment of directors,
may be amended if approved by holders of at least two-thirds of our ordinary shares who attend and vote in a general meeting, and corresponding
provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65%
of our ordinary shares. Should our initial shareholders vote all their shares in favor of any such amendment at a meeting at which only
the minimum quorum is present (and if the representative shares are voted in favor of the amendment), we would require approximately
1,600,001, or 16%, of the public shares issued in our initial public offering to be voted in favor of any such amendment for its approval
(assuming no exercise of the underwriters’ overallotment option and no purchase by our initial shareholders or their affiliates
of public shares in the initial public offering or thereafter). We may not issue additional securities that can vote on amendments to
our amended and restated memorandum and articles of association. Our initial shareholders, which collectively beneficially own 20%
of our ordinary shares, will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement
and will have the discretion to vote in any manner it chooses. 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-initial business combination behavior more easily than some other
blank check companies, and this may increase our ability to complete a business combination with which you do not agree. Our shareholders
may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
We
may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target
business, which could compel us to restructure or abandon a particular business combination.
Although
we believe that the net proceeds of the initial public offering and the sale of the private placement warrants will be sufficient to
allow us to complete our initial business combination, because we have not yet identified any prospective target business we cannot ascertain
the capital requirements for any particular transaction. If the net proceeds of the initial public offering and the sale of the private
placement warrants prove to be insufficient, either because of the size of our initial business combination, the obligation to redeem
for cash a significant number of shares from shareholders who elect redemption in connection with our initial business combination or
the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek
additional financing or to abandon the proposed business combination. We cannot assure you that such financing will be available on acceptable
terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination,
we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target
business candidate. In addition, even if we do not need additional financing to complete our 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. If we are unable to complete our initial
business combination, our public shareholders may only receive approximately $10.15 per share on the liquidation of our trust account,
and our warrants will expire worthless. In certain circumstances, our public shareholders may receive less than $10.15 per share on the
redemption of their shares.
Resources
could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate
and acquire or merge with another business. If we are unable to complete our initial business combination, our public shareholders may
receive only approximately $10.15 per share, or less than such amount in certain circumstances, on the liquidation of our trust account
and our warrants will expire worthless.
We
anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements,
disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants,
attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the
proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we
may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will
result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire
or merge with another business. If we are unable to complete our initial business combination, our public shareholders may receive only
approximately $10.15 per share on the liquidation of our trust account and our warrants will expire worthless.
Our
key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination.
These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them
to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Our
key personnel may be able to remain with the company after the 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. The personal and financial
interests of such individuals may influence their motivation in identifying and selecting a target business, subject to his or her fiduciary
duties under Cayman Islands law. However, we believe the ability of such individuals to remain with us after the completion of our initial
business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business
combination. There is no certainty, however, that any of our key personnel will remain with us after the completion of our initial business
combination. We cannot assure you that any of our key personnel will remain in senior management or advisory positions with us. The determination
as to whether any of our key personnel will remain with us will be made at the time of our initial business combination.
We
may 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’ management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities
we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company,
the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any shareholders who choose
to remain shareholders following the business combination could suffer a reduction in the value of their shares. Such shareholders are
unlikely to have a remedy for such reduction in value.
The
officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The departure of a
business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition candidates’ key personnel upon the completion of our initial business combination cannot be ascertained
at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated
with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition
candidate will not wish to remain in place.
If
we effect our initial business combination with a company with operations or opportunities outside of the United States, we would be
subject to a variety of additional risks that may negatively impact our operations.
If
we effect our initial business combination with a company with operations or opportunities outside of the United States, we would be
subject to any special considerations or risks associated with companies operating in an international setting, including any of the
following:
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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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tariffs
and trade barriers; |
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regulations
related to customs and import/export matters; |
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longer
payment cycles; |
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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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rates
of inflation; |
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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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crime,
strikes, riots, civil disturbances, terrorist attacks and wars; and |
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deterioration
of political relations with the United States. |
We
may not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer, which may adversely
impact our results of operations and financial condition.
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 Annual Report on Form10-K to issue any notes or other debt securities, or to otherwise
incur outstanding debt following our initial public offering, we may choose to incur substantial debt to complete our initial business
combination. We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title,
interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per-share amount
available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
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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 security is payable on demand; |
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our
inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such
financing while the debt security is outstanding; |
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our
inability to pay dividends on our 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 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. |
We
may only be able to complete one business combination with the proceeds of our initial public offering and the sale of the private placement
warrants, which will cause us to be solely dependent on a single business which may have a limited number of products or services. This
lack of diversification may negatively impact our operations and profitability.
Of
the net proceeds from our initial public offering and the sale of the private placement warrants, $116,725,000 is available to complete
our business combination and pay related fees and expenses (which includes up to $4,025,000 for the payment of deferred underwriting
commissions).
We
may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within
a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business
because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma
financial statements with the SEC that present operating results and the financial condition of several target businesses as if they
had been operated on a combined basis. By completing our initial business combination with only a single entity our lack of diversification
may subject us to numerous economic, competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit
from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several
business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may
be:
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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. |
This
lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial
adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We
may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete
our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If
we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers
to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make
it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we
could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence
investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations
and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks,
it could negatively impact our profitability and results of operations.
We
may attempt to complete our initial business combination with a private company about which little information is available, which may
result in a business combination with a company that is not as profitable as we suspected, if at all.
In
pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company. Very little
public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential
initial business combination on the basis of limited information, which may result in a business combination with a company that is not
as profitable as we suspected, if at all.
As
the number of special purpose acquisition companies evaluating targets increases, attractive targets may become scarcer and there may
be more competition for attractive targets. This could increase the cost of our initial business combination and could even result in
our inability to find a target or to consummate an initial business combination.
In
recent years, the number of special purpose acquisition companies that have been formed has increased substantially. Many potential targets
for special purpose acquisition companies have already entered into an initial business combination, and there are still many special
purpose acquisition companies seeking targets for their initial business combination, as well as many such companies currently in registration.
As a result, at times, fewer attractive targets may be available, and it may require more time, more effort and more resources to identify
a suitable target and to consummate an initial business combination.
In
addition, because there are more special purpose acquisition companies seeking to enter into an initial business combination with available
targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause targets
companies to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry
sector downturns, geopolitical tensions, or increases in the cost of additional capital needed to close business combinations or operate
targets post-business combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find and
consummate an initial business combination, and may result in our inability to consummate an initial business combination on terms favorable
to our investors altogether.
We
face risks related to insurance sector companies.
Business
combinations with companies in the insurance sector entail special considerations and risks. If we are successful in completing a business
combination with such a target business, we will be subject to, and possibly adversely affected by, the following risks:
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Compliance
with governmental regulations and changes in laws and regulations and risks from investigations and legal proceedings could be costly
and could adversely affect operating results; |
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We
may not be able to obtain regulatory approvals in connection with a business combination in a timely manner, or at all, and this
delay or failure may result in additional expenditures of money and resources, jeopardize our efforts to consummate a business combination
within required time periods and force us to liquidate; |
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Each
of our target businesses in the insurance sector will be subject to extensive regulation, which may adversely affect our ability
to achieve our business objectives; in addition, if a target business fails to comply with these regulations, it may be subject to
penalties, including fines and suspensions, which could reduce our earnings significantly; |
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If
we fail to properly evaluate the financial position and reserves of a target business with which we enter into a business combination,
our losses and benefits from the operation of that business may exceed our loss and benefit reserves, which could have a significantly
adverse effect on our results of operations; |
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A
downgrade in the claims paying and financial strength ratings of a target business may cause significant declines in its revenues
and earnings; |
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Changes
in market interest rates or in the equity security markets may impair the performance of a target business’ investments, the
sales of its investment products and issuers of securities held in the portfolio of the target business; |
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The
exclusions and limitations in policies written by a target business may not be enforceable; |
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Cyclical
changes in the property/casualty insurance industry may negatively impact a target business’ results of operations; |
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Catastrophic
losses are unpredictable and may adversely affect the results of operations, liquidity and financial condition of a target business; |
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A
target business may be subject to assessments and other surcharges from state guaranty funds, mandatory reinsurance arrangements
and state insurance facilities, which may reduce or otherwise impair profitability; |
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Reliance
by a target business on information technology and telecommunications systems and the failure or disruption of these systems could
disrupt its operations and adversely affect its results of operations; |
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If
our target business’ established reserves for insurance claims are insufficient, its earnings may be reduced or it could suffer
losses; and |
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If
a target business is engaged in insurance brokerage, a reduction in insurance premium rates and commission rates may have an adverse
effect on its operations and profits. |
Any
of the foregoing could have a negative adverse impact on our operations following a business combination. However, our efforts in identifying
prospective target businesses will not be limited to the insurance sector. Accordingly, if we acquire a target business in another industry,
these risks will likely not affect us and we will be subject to other risks attendant with the specific industry in which we operate
or target business which we acquire, none of which can be presently ascertained.
We
may face risks related to businesses in the InsurTech sector.
Business
combinations with businesses in the InsurTech sector may involve special considerations and risks. If we complete our initial business
combination with a business in the financial services industry or a business providing technology services to the financial industry,
we will be subject to the following risks, any of which could be detrimental to us and the business we acquire:
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If
we are unable to keep pace with evolving technology and changes in the InsurTech sector, our revenues and future prospects may decline; |
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Our
ability to provide InsurTech products and services to customers may be reduced or eliminated by regulatory changes; |
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Any
business or company we acquire could be vulnerable to cyberattack or theft of individual identities or personal data; |
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Difficulties
with any products or services we provide could damage our reputation and business; |
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A
failure to comply with privacy regulations could adversely affect relations with customers and have a negative impact on business;
and |
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We
may not be able to protect our intellectual property and we may be subject to infringement claims. |
Any
of the foregoing could have an adverse impact on our operations following a business combination. However, our efforts in identifying
prospective target businesses will not be limited to businesses in the InsurTech sector. Accordingly, if we acquire a target business
in another industry, these risks will likely not affect us and we will be subject to other risks attendant with the specific industry
in which the target business which we acquire operates, none of which can be presently ascertained.
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. The role of our key
personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target
business in senior management or advisory positions following our initial business combination, it is likely that some or all of the
management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial
business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be
unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources
helping them become familiar with such requirements.
We
are dependent upon our officers and directors and their departure could adversely affect our ability to operate.
Our
operations are dependent upon a relatively small group of individuals and, in particular, Mr. Madhu, our Chief Executive Officer, Mr.
Timothy, our Chief Financial Officer, and our 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 officers and directors are not required
to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time
among various business activities, including identifying potential business combinations and monitoring the related due diligence. We
do not have an employment agreement with, or key-man insurance on the life of, any of our directors or officers. The unexpected loss
of the services of one or more of our directors or officers could have a detrimental effect on us.
Since
our initial shareholders, executive officers and directors will lose their entire investment in us if our initial business combination
is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for
our initial business combination.
On
April 12, 2021, our sponsor purchased 2,875,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.009 per
share. Prior to the initial investment in the company of $25,000 by our sponsor, the company had no assets, tangible or intangible. Our
initial shareholders own approximately 20% of our issued and outstanding shares. The founder shares will be worthless if we do not complete
an initial business combination.
In
addition, our sponsor and Maxim, the representative to the underwriters in our initial public offering, have purchased 5,760,000 private
placement warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.00 per warrant, Our
sponsor and Maxim have purchased purchase 4,897,500 and 862,500 warrants, respectively, but such warrants will be worthless if we do
not complete our initial business combination. Each of our officers (and directors) has made an investment in our sponsor and is a member
of our sponsor. 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 the initial business combination. This risk may become more acute as the 15-month anniversary of the closing of our initial
public offering nears, which is the deadline for our completion of an initial business combination.
The
founder shares are identical to the ordinary shares included in the units being sold in our initial public offering except that (i) holders
of the founder shares have the right to vote on the appointment of our directors prior to our initial business combination, (ii) the
founder shares are subject to certain transfer restrictions, (iii) our initial shareholders, officers and directors have entered into
a letter agreement with us, pursuant to which they have agreed (A) to waive their redemption rights with respect to their founder shares
and public shares in connection with the completion of our initial business combination and (B) to waive their rights to liquidating
distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination by
November 16, 2022 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)
and (iv) the founder shares will automatically convert into our Class A ordinary shares at the time of our initial business combination,
or earlier at the option of the holder, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described
herein and in our amended and restated memorandum and articles of association.
Our
officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to
how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial
business combination.
Our
officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest
in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend
to have any full-time employees prior to the completion of our initial business combination. Each of our officers is engaged in several
other business endeavors for which he or she may be entitled to substantial compensation and our officers are not obligated to contribute
any specific number of hours per week to our affairs. Our independent directors also serve as officers and board members for other entities.
If our officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs
in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact
on our ability to complete our initial business combination.
Certain
of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities
similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular
business opportunity should be presented.
Until
we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses.
Our initial shareholders and officers and directors are, or may in the future become, affiliated with entities (such as operating companies
or investment vehicles) that are engaged in making and managing investments in a similar business, although they may not participate
in the formation of, or become an officer or director of, any other special purpose acquisition companies with a class of securities
registered under the Exchange Act until we have entered into a definitive agreement regarding our initial business combination or we
have failed to complete our initial business combination by November 16, 2022 or during any Extension Period.
Our
officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the other
entities to which they owe certain fiduciary or contractual duties. As a result, they will have a duty to offer acquisition opportunities
to certain clients or other entities. Accordingly, our officers and directors may have conflicts of interest in determining to which
entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target
business may be presented to other entities prior to its presentation to us, subject to his or her fiduciary duties under Cayman Islands
law.
Our
officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our
interests.
We
have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect
pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or
have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our initial shareholders,
our directors or officers. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business
activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
We
may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated
with our initial shareholders, officers, directors or existing holders which may raise potential conflicts of interest.
In
light of the involvement of our initial shareholders, officers and directors with other entities, we may decide to acquire one or more
businesses affiliated with our initial shareholders, officers and directors. Our officers and directors also serve as officers and board
members for other entities, including, without limitation, those described under “Conflicts of Interest.” Such entities may
compete with us for business combination opportunities. Our initial shareholders, 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 preliminary discussions concerning a business combination with any such entity or entities. Although we will not be specifically
focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such
affiliated entity met our criteria for a business combination and such transaction was approved by a majority of our independent directors. Despite our agreement to obtain an opinion
from an independent investment banking firm or another independent firm that commonly renders valuation opinions for the type of company
we are seeking to acquire or an independent accounting firm, regarding the fairness to our company from a financial point of view of
a business combination with one or more domestic or international businesses affiliated with our officers, directors or existing holders,
potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to
our public shareholders as they would be absent any conflicts of interest.
Since
our sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any bona-fide, documented out-of-pocket
expenses if our initial business combination is not completed, a conflict of interest may arise in determining whether a particular business
combination target is appropriate for our initial business combination.
At
the closing of our initial business combination, our sponsor, officers and directors, or any of their respective affiliates, will be
reimbursed for any bona-fide, documented out-of-pocket expenses incurred in connection with activities on our behalf such as identifying
potential target businesses and performing due diligence on suitable business combinations. There is no cap or ceiling on the reimbursement
of out-of-pocket expenses incurred in connection with activities on our behalf. These financial interests of our sponsor, officers and
directors may influence their motivation in identifying and selecting a target business combination and completing an initial business
combination.
Our
management may not be able to maintain control of a target business after our initial business combination. We cannot provide assurance
that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably
operate such business.
We
may structure a business combination so that the post-transaction company in which our public shareholders own shares will own less than
100% of the equity interests or assets of a target business, but we will only complete such business combination if the post-transaction
company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest
in the target sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not
consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities
of the target, our shareholders prior to the business combination may collectively own a minority interest in the post business combination
company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue
a transaction in which we issue a substantial number of new ordinary shares in exchange for all of the issued and outstanding capital
stock, shares or other equity interests of a target. In this case, we would acquire a 100% interest in the target. However, as a result
of the issuance of a substantial number of new ordinary shares, our shareholders immediately prior to such transaction could own less
than a majority of our issued and outstanding ordinary shares subsequent to such transaction. In addition, other minority shareholders
may subsequently combine their holdings resulting in a single person or group obtaining a larger portion 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 our control of
the target business.
Our
initial shareholders will control the appointment of our Board of Directors until consummation of our initial business combination and
will hold a substantial interest in us. As a result, they will appoint all of our directors and may exert a substantial influence on
actions requiring shareholder vote, potentially in a manner that you do not support.
Our
initial shareholders owns approximately 20% of our issued and outstanding ordinary shares. In addition, the founder shares, all of which
are held by our initial shareholders, will entitle the initial shareholders to appoint all of our directors prior to our initial business
combination. Holders of our public shares will have no right to vote on the appointment of directors during such time. These provisions
of our amended and restated memorandum and articles of association may only be amended by a special resolution passed by at least 90%
of our ordinary shares voting in a general meeting. As a result, you will not have any influence over the appointment of directors prior
to our initial business combination.
Neither
our initial shareholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities.
Factors that would be considered in making such additional purchases would include consideration of the current trading price of our
Class A ordinary shares. In addition, as a result of its substantial ownership in our company, our initial shareholders may exert a substantial
influence on other actions requiring a shareholder vote, potentially in a manner that you do not support, including amendments to our
amended and restated memorandum and articles of association and approval of major corporate transactions. If our initial shareholders
purchase any additional ordinary shares in the aftermarket or in privately negotiated transactions, this would increase its influence
over these actions. Accordingly, our initial shareholders will exert significant influence over actions requiring a shareholder vote
at least until the completion of our initial business combination.
RISKS
RELATING TO OUR SECURITIES
The
securities in which we may invest the funds held in the trust account could bear a negative rate of interest, which could reduce the
value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.15 per
share.
The
proceeds held in the trust account can be invested only in U.S. government treasury obligations with a maturity of 185 days or less or
in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government
treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly
yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years,
and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies
in the United States. In the event that we are unable to complete our initial business combination or make certain amendments to our
amended and restated memorandum and articles of association, our public shareholders are entitled to receive their pro-rata share of
the proceeds held in the trust account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete
our initial business combination, $100,000 of interest). Negative interest rates could reduce the value of the assets held in trust such
that the per-share redemption amount received by public shareholders may be less than $10.15 per share.
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
cannot assure you that our securities will continue to be listed on Nasdaq in the future or prior to our initial business combination.
In order to continue listing our securities on Nasdaq prior to our initial business combination, we must maintain certain financial,
distribution and share price levels. Generally, we must maintain a minimum amount in shareholders’ equity (generally $2,500,000)
and a minimum number of holders of our securities (generally 300 public holders). Additionally, in connection with our initial business
combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements, which are more rigorous
than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq. For instance,
our share price would generally be required to be at least $4.00 per share, our shareholders’ equity would generally be required
to be at least $5.0 million and we would be required to have a minimum of 300 round lot holders (with at least 50% of such round lot
holders holding securities with a market value of at least $2,500) of our securities. We cannot assure you that we will be able to meet
those initial listing requirements at that time. If Nasdaq delists our securities from trading on its exchange and we are not able to
list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market.
If this were to occur, we could face significant material adverse consequences, including:
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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. |
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 we expect that our units and eventually
our Class A ordinary shares and warrants will be listed on Nasdaq, our units, Class A ordinary shares and warrants will be covered securities.
Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate
companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the
sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the
sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check
companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies
in their states. Further, if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject
to regulation in each state in which we offer our securities, including in connection with our initial business combination.
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 seeking redemption rights with respect
to more than an aggregate of 15% of the shares sold in our initial public offering, which we refer to as the “Excess Shares.”
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. As a result, you would 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.
We
may issue additional Class A ordinary or preference shares to complete our initial business combination or under an employee incentive
plan after completion of our initial business combination. We may also issue Class A ordinary shares upon the conversion of the Class
B ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution
provisions contained in our amended and restated memorandum and articles of association. Any such issuances would dilute the interest
of our shareholders and likely present other risks.
Our
amended and restated memorandum and articles of association will authorize the issuance of up to 400,000,000 Class A ordinary shares,
par value $0.0001 per share, 40,000,000 Class B ordinary shares, par value $0.0001 per share and 4,000,000 undesignated preference shares,
par value $0.0001 per share. There will be 371,125,000 and 37,125,000 authorized but unissued Class A and Class B ordinary shares available,
respectively, for issuance, which amount takes into account shares issuable to the underwriter and shares reserved for issuance upon
exercise of outstanding warrants but not upon conversion of the Class B ordinary shares. Class B ordinary shares are convertible into
Class A ordinary shares, initially at a one-for-one ratio but subject to adjustment as set forth herein and in our amended and restated
memorandum and articles of association. Immediately after our initial public offering, there will be no preference shares issued and
outstanding.
We
may issue a substantial number of additional ordinary shares, and may issue preference shares, in order to complete our initial business
combination or under an employee incentive plan after completion of our initial business combination. We may also issue Class A ordinary
shares upon conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business combination
as a result of the anti-dilution provisions contained in our amended and restated memorandum and articles of association. However, our
amended and restated memorandum and articles of association provide, among other things, that prior to our initial business combination,
we may not issue additional ordinary shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii)
vote on any initial business combination. The issuance of additional ordinary shares or preference shares:
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may
significantly dilute the equity interest of investors in our initial public offering; |
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may
subordinate the rights of holders of ordinary shares if preference shares are issued with rights senior to those afforded our ordinary
shares; |
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could
cause a change in control if a substantial number of ordinary shares are issued, which may affect, among other things, our ability
to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and
directors; and |
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may
adversely affect prevailing market prices for our units, ordinary shares and/or warrants. |
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
have not registered 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 15 business days after the closing of our initial business combination, we will use our best efforts to file, and within 60 business
days following our initial business combination to have declared effective, a registration statement covering such shares and maintain
a current prospectus relating to the Class A ordinary shares issuable upon exercise of the warrants, until the expiration of the warrants
in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts
or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial
statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable
upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise their warrants
on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any
shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified
under the securities laws of the state of the exercising holder, or an exemption is available. Notwithstanding the foregoing, if a registration
statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective within a specified period following
the consummation of our initial business combination, warrant holders may, until such time as there is an effective registration statement
and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis
pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption,
or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. We will use our best
efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In no event will
we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that
we are unable to register or qualify the shares underlying the warrants under applicable state securities laws and no exemption is available.
If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification,
the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In
such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for
the Class A ordinary shares included in the units. If and when the warrants become redeemable by us, we may not exercise our redemption
right if the issuance of shares upon exercise of the warrants is not exempt from registration or qualification under applicable state
blue sky laws or we are unable to effect such registration or qualification. We will use our best efforts to register or qualify such
shares under the blue sky laws of the state of residence in those states in which the warrants were offered by us in our initial public
offering.
The
grant of registration rights to our initial shareholder and holders of our private placement warrants 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 concurrently with the issuance and sale of the securities in our initial public offering, our initial
shareholders and their permitted transferees can demand that we register their founder shares, after those shares convert to our Class
A ordinary shares at the time of our initial business combination. In addition, holders of our private placement warrants and their permitted
transferees can demand that we register the private placement warrants and the Class A ordinary shares issuable upon exercise of the
private placement warrants, and holders of warrants that may be issued upon conversion of working capital loans, may demand that we register
such warrants or the Class A ordinary shares issuable upon exercise of such warrants. We will bear the cost of registering these securities.
The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect
on the market price of our Class A ordinary shares. In addition, the existence of the registration rights may make our initial business
combination more costly or difficult to conclude. This is because the shareholders of the target business may increase the equity stake
they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A
ordinary shares that is expected when the ordinary shares owned by our initial shareholders, holders of our private placement warrants
or holders of our working capital loans or their respective permitted transferees are registered.
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 will contain provisions that may discourage unsolicited takeover proposals
that shareholders may consider to be in their best interests. These provisions include two-year director terms and the ability of the
Board of Directors to designate the terms of and issue new series of preference shares, which may make more difficult the removal of
management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
If
we seek shareholder approval of our initial business combination, our initial shareholders, officers and directors have agreed to vote
in favor of such initial business combination, regardless of how our public shareholders vote.
Unlike
other blank check companies in which the initial shareholders agree to vote their founder shares in accordance with the majority of the
votes cast by the public shareholders in connection with an initial business combination, our initial shareholders, officers and directors
have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote any
founder shares held by them, as well as any public shares purchased after our initial public offering, in favor of our initial business
combination. We expect that our initial shareholders and their permitted transferees will own at least 20% of our issued and outstanding
ordinary shares at the time of any such shareholder vote. As a result, in addition to our initial shareholders’ founder shares,
we would need only 4,312,501, or 37.5%, of the 11,500,000 public shares to be voted in favor of a transaction (assuming all outstanding
shares are voted) in order to have our initial business combination approved (assuming the over-allotment option is not exercised). Accordingly,
if we seek shareholder approval of our initial business combination, it is more likely that the necessary shareholder approval will be
received than would be the case if such persons agreed to vote their founder shares in accordance with the majority of the votes cast
by our public shareholders.
The
exercise price for the public warrants is higher than in many similar blank check company offerings in the past, and, accordingly, the
warrants are more likely to expire worthless.
The
exercise price of the public warrants is higher than is typical in many similar blank check companies in the past. Historically, the
exercise price of a warrant was generally a fraction of the purchase price of the units in the initial public offering. The exercise
price for our public warrants is $11.50 per share, subject to adjustment as provided herein. As a result, the warrants are less likely
to ever be in the money and more likely to expire worthless.
A
provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.
Unlike
some other blank check companies, if
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(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 share; |
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|
|
(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 |
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|
|
|
(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 price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market
Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business combination with a target
business.
Our
warrant agreement designates 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 of
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 team.
We
may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of
at least 65% of the then outstanding public warrants.
Our
warrants 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 warrants may be amended without the consent of any holder to cure
any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then outstanding public
warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend
the terms of the public warrants in a manner adverse to a holder if holders of at least 65% of the then outstanding public warrants approve
of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 65% of the then outstanding
public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of
the warrants, shorten the exercise period or decrease the number of ordinary shares purchasable upon exercise of a warrant.
A
provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.
If
(i) we issue additional 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 Class A 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 (net of redemptions), and (iii) the Market Value of our Class A ordinary shares is below $9.20 per share, the exercise
price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued
Price, the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the
Market Value and the Newly Issued Price, and the $10.15 per share redemption trigger price 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.
Our
warrants are accounted for as a warrant liability and are recorded at fair value upon issuance with changes in fair value each period
reported in earnings, which may have an adverse effect on the market price of our Class A ordinary shares or may make it more difficult
for us to consummate an initial business combination.
We
have issued an aggregate of 17,260,000 warrants in connection with our initial public offering (comprised of the 11,500,000 warrants
included in the units in our initial public offering and the 5,760,000 private placement warrants). We have accounted for these as a
warrant liability and have recorded at fair value upon issuance with any changes in fair value period reported in earnings. The impact
of changes in fair value on earnings may have an adverse effect on the market price of our Class A ordinary shares. In addition, potential
targets may seek a SPAC that does not have warrants that are accounted for as a warrant liability, which may make it more difficult for
us to consummate an initial business combination with a target business.
We
may redeem your unexpired warrants prior to their expiration at a time that is disadvantageous to you, thereby making your warrants
worthless.
We
have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of
$0.01 per warrant, provided that the last reported sales price of our Class A ordinary shares equals or exceeds $18.00 per share (as
adjusted for share sub-divisions, share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the like)
for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of redemption
to the warrant holders. If and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of
shares upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are
unable to effect such registration or qualification. We will use our best efforts to register or qualify such shares under the blue sky
laws of the state of residence in those states in which the warrants were offered by us in our initial public offering. Redemption of
the outstanding warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous
for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or
(iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially
less than the market value of your warrants. None of the private placement warrants will be redeemable by us so long as they are held
by our initial shareholders or their permitted transferees.
Our
management’s ability to require holders of our warrants to exercise such warrants on a cashless basis will cause holders to receive
fewer Class A ordinary shares upon their exercise of the warrants than they would have received had they been able to exercise their
warrants for cash.
If
we call our public warrants for redemption after the redemption criteria have been satisfied,
our management will have the option to require any holder that wishes to exercise his or her warrant (including any warrants held by
our initial shareholders, officers or directors, other purchasers of our founders’ private placement warrants, or their permitted
transferees) to do so on a “cashless basis.” If our management chooses to require holders to exercise their warrants on a
cashless basis, the number of Class A ordinary shares received by a holder upon exercise will be fewer than it would have been had such
holder exercised his or her warrant for cash. This will have the effect of reducing the potential “upside” of the holder’s
investment in our company.
Our
warrants and founder shares may have an adverse effect on the market price of our Class A ordinary shares and make it more difficult
to effectuate our initial business combination.
We
have issued warrants to purchase 17,260,000 of our Class A ordinary shares at a price of $11.50 per share (subject to adjustment). Our
initial shareholders own an aggregate of 2,875,000 founder shares. The founder shares are convertible into Class A ordinary shares
on a one-for-one basis, subject to adjustment as set forth herein and in our amended and restated memorandum and articles of association.
In addition, if our initial shareholders make any working capital loans, up to $1,500,000 of such loans may be converted into warrants,
at the price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants. To
the extent we issue Class A ordinary shares to effectuate a business transaction, the potential for the issuance of a substantial number
of additional Class A ordinary shares upon exercise of these warrants or conversion rights could make us a less attractive acquisition
vehicle to a target business. Any such issuance will increase the number of 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 and founder shares may
make it more difficult to effectuate a business combination or increase the cost of acquiring the target business.
The
private placement warrants are identical to the warrants sold as part of the units in our initial public offering except that, so long
as they are held by our initial shareholders or their permitted transferees, (i) they will not be redeemable by us, (ii) they (including
the Class A ordinary shares issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred,
assigned or sold by the sponsor until 30 days after the completion of our initial business combination, (iii) they may be exercised by
the holders on a cashless basis and (iv) the holders thereof (including with respect to ordinary shares issuable upon exercise of such
warrants) are entitled to registration rights.
If we are unable to consummate our initial
business combination by November 16, 2022, our public shareholders may be forced to wait beyond November 16, 2022 before
redemption from our trust account.
If we are unable to consummate our initial business
combination by November 16, 2022 or during any Extension Period, we will distribute the aggregate amount then on deposit in the
trust account (less up to $100,000 of any net interest earned thereon to pay dissolution expenses), pro rata to our public shareholders
by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described herein. Any
redemption of public shareholders from the trust account shall be effected automatically by function of our amended and restated memorandum
and articles of association prior to any voluntary winding up. If we are required to 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 Act. In that case, investors may be forced to wait beyond November 16,
2022 before the redemption proceeds of our trust account become available to them and they receive the return of their pro rata portion
of the proceeds from our trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation
unless we consummate our initial business combination prior thereto and only then in cases where investors have sought to redeem their
ordinary shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we are unable to
complete our initial business combination.
GENERAL
RISK FACTORS
We
are a newly incorporated company with limited operating history and no revenues, and you have no basis on which to evaluate our ability
to achieve our business objective.
We
are a newly incorporated exempted company incorporated under the laws of the Cayman Islands with limited operating results. Because we
lack a substantial 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. If we fail to complete our initial business combination, we will
never generate any operating revenues.
Past
performance by our management team and their respective affiliates may not be indicative of future performance of an investment in us.
Information
regarding performance by, or businesses associated with, our management team and their affiliates is presented for informational purposes
only. Past performance by our management team, including their affiliates’ past performance, is not a guarantee either (i) of success
with respect to any business combination we may consummate or (ii) that we will be able to locate a suitable candidate for our initial
business combination. You should not rely on the historical record of our management team and their affiliates as indicative of our future
performance and you may lose all or part of your invested capital. Additionally, in the course of their respective careers, members of
our management team have been involved in businesses and deals that were unsuccessful. Our officers and directors have not had management
experience with blank check companies or special purpose acquisition corporations in the past.
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
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 Act, reincorporate
in the jurisdiction in which the target company or business is located. The transaction may require a shareholder to recognize taxable
income in the jurisdiction in which the shareholder is a tax resident or in which its members are resident if it is a tax transparent
entity. We do not intend to make any cash distributions to shareholders to pay such taxes. Shareholders may be subject to withholding
taxes or other taxes with respect to their ownership of us after the reincorporation.
Certain
agreements related to our initial public offering may be amended without shareholder approval.
Certain
agreements, including the underwriting agreement relating to our initial public offering, the investment management trust agreement between
us and Continental Stock Transfer & Trust Company, the letter agreement among us and our initial shareholders, officers, directors
and director nominees, the registration rights agreement among us and our initial shareholders and the administrative services agreement
between us and our sponsor, may be amended without shareholder approval. These agreements contain various provisions that our public
shareholders might deem to be material. For example, the underwriting agreement related to our initial public offering contains a covenant
that the target company that we acquire must have a fair market value equal to at least 80% of the balance in the trust account at the
time of signing the definitive agreement for the transaction with such target business (excluding the deferred underwriting commissions
and taxes payable on any income earned on the trust account) so long as we obtain and maintain a listing for our securities on Nasdaq.
While we do not expect our board to approve any amendment to any of these agreements prior to our initial business combination, it may
be possible that our board, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments
to any such agreement in connection with the consummation of our initial business combination. Any such amendment may have an adverse
effect on the value of an investment in our securities.
We
may be a passive foreign investment company, or “PFIC,” which could result in adverse U.S. federal income tax consequences
to U.S. investors.
If
we are a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of our ordinary shares
or warrants, the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting
requirements. Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception.
Depending on the particular circumstances the application of the start-up exception may be subject to uncertainty, and there cannot be
any assurance that we will qualify for the start-up exception. Accordingly, there can be no assurances with respect to our status as
a PFIC for our current taxable year or any subsequent taxable year. Our actual PFIC status for any taxable year, however, will not be
determinable until after the end of such taxable year. Moreover, if we determine we are a PFIC for any taxable year, we will endeavor
to provide to a U.S. Holder such information as the Internal Revenue Service (“IRS”) may require, including a PFIC annual
information statement, in order to enable the U.S. Holder to make and maintain a “qualified electing fund” election, but
there can be no assurance that we will timely provide such required information, and such election would be unavailable with respect
to our warrants in all cases. We urge U.S. Holders to consult their own tax advisors regarding the possible application of the PFIC rules
to holders of our ordinary shares and warrants.
An
investment in our securities may result in uncertain or adverse United States federal income tax consequences.
An
investment in our securities may result in uncertain United States federal income consequences. There are no authorities that directly
address instruments similar to the units we have issued in our initial public offering and therefore, the allocation an investor makes
with respect to the purchase price of a unit between the ordinary share and the warrant included in each unit could be challenged by
the IRS or the courts. If such a challenge were to be successful, an investor could be subjected to adverse U.S. federal income tax consequences
that would be different than those described herein. Furthermore, it is unclear whether the redemption rights with respect to the ordinary
shares suspend the running of the holding period for a U.S. Holder for purposes of determining whether any
gain or loss realized by such holder upon a disposition of the ordinary shares is long-term capital gain or loss and determining whether
any dividend we pay would be considered “qualified dividend income” for U.S. federal income tax purposes. Accordingly, each
prospective investor is urged to consult a tax advisor with respect to the specific tax consequences of the acquisition, ownership and
disposition of our ordinary shares and warrants, including the applicability and effect of state, local or non-U.S. tax laws, as well
as U.S. federal tax laws.
We
are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure
requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more
difficult to compare our performance with other public companies.
We
are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage
of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth
companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and
exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and 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 ordinary shares held by non-affiliates 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 accountant standards used.
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; |
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; |
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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. |
We
do not believe that our anticipated principal activities will subject us to the Investment Company Act. The proceeds held in the trust
account may be invested by the trustee only in United States government treasury bills with a maturity of 185 days or less or in money
market funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company
Act. Because the investment of the proceeds will be restricted to these instruments, we believe we will meet the requirements for the
exemption provided in Rule 3a-1 promulgated under the Investment Company Act. If we were deemed to be subject to the Investment Company
Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may
hinder our ability to complete a business combination. If we are unable to complete our initial business combination, our public shareholders
may receive only approximately $10.15 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants
will expire worthless.
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 officers, or enforce judgments obtained in the United States courts against
our directors or officers.
Our
corporate affairs are governed by our amended and restated memorandum and articles of association, the Companies Act (as the same may
be supplemented or amended from time to time) and the common law of the Cayman Islands. The rights of shareholders to take action against
the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are
to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively
limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive
authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of
our directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions
in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and
certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman
Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the United States.
We
have been advised by Maples and Calder (Cayman) LLP, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely
(i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the
federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities
against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as
the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in
the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign
money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a
competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain
conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a
liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the
same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural
justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public
policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
As
a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken
by management, members of the Board of Directors or controlling shareholders than they would as public shareholders of a United States
company.
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.
We
may seek acquisition opportunities in foreign countries that are subject to political, economic, and other uncertainties.
We
may seek acquisitions opportunities that have operations outside the United States. As a result, we could face political and economic
risks and other uncertainties with respect these potential international operations. These risks may include the following, among other
things:
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loss
of revenue, property, and equipment or delays in operations as a result of hazards such as expropriation, war, piracy, acts of terrorism,
insurrection, civil unrest, and other political risks, including tension and confrontations among political parties; |
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transparency
issues in general and, more specifically, the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and other anti-corruption
compliance laws and issues; |
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increases
in taxes and governmental royalties; |
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unilateral
renegotiation of contracts by governmental entities; |
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redefinition
of international boundaries or boundary disputes; |
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difficulties
enforcing our rights against a governmental agency because of the doctrine of sovereign immunity and foreign sovereignty over international
operations; |
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difficulties
enforcing our rights against a governmental agency in the absence of an appropriate and adequate dispute resolution mechanism to
address contractual disputes, such as international arbitration; |
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changes
in laws and policies governing operations of foreign-based companies; |
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foreign-exchange
restrictions; and |
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international
monetary fluctuations and changes in the relative value of the U.S. dollar as compared to the currencies of other countries in which
we conduct business. |
Outbreaks
of civil and political unrest and acts of terrorism have occurred in countries in Europe, Africa, South America, and the Middle East,
including countries close to or where we may seek an acquisition. Continued or escalated civil and political unrest and acts of terrorism
in the countries in which we may operate could result in our curtailing operations or delays in project completions. In the event that
countries in which we may operate experience civil or political unrest or acts of terrorism, especially in events where such unrest leads
to an unseating of the established government, our operations could be materially impaired. Our potential international operations may
also be adversely affected, directly or indirectly, by laws, policies, and regulations of the United States affecting foreign trade and
taxation, including U.S. trade sanctions. Realization of any of the factors listed above could materially and adversely affect our financial
condition, results of operations, or cash flows.
If
our management following our initial business combination is unfamiliar with United States securities laws, they may have to expend time
and resources becoming familiar with such laws, which could lead to various regulatory issues.
Following
our initial business combination, any or all of our management could resign from their positions as officers of the company, and
the management of the target business at the time of the business combination will remain in place. Management of the target business
may not be familiar with United States securities laws. If new management is unfamiliar with United States securities laws, they may
have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various
regulatory issues which may adversely affect our operations.
After
our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue
will be derived from our operations in such country. Accordingly, our results of operations and prospects will be subject, to a significant
extent, to the economic, political and legal policies, developments and conditions in the country in which we operate.
The
economic, political and social conditions, as well as government policies, of the country in which our operations are located could affect
our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such growth may not be
sustained in the future. If in the future such country’s economy experiences a downturn or grows at a slower rate than expected,
there may be less demand for spending in certain industries. A decrease in demand for spending in certain industries could materially
and adversely affect our ability to find an attractive target business with which to consummate our initial business combination and
if we effect our initial business combination, the ability of that target business to become profitable.
Exchange
rate fluctuations and currency policies may cause a target business’ ability to succeed in the international markets to be diminished.
In
the event we acquire a non-U.S. target, all revenues and income would likely be received in a foreign currency, and the dollar equivalent
of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency. The value
of the currencies in our target regions fluctuate and are affected by, among other things, changes in political and economic conditions.
Any change in the relative value of such currency against our reporting currency may affect the attractiveness of any target business
or, following consummation of our initial business combination, our financial condition and results of operations. Additionally, if a
currency appreciates in value against the dollar prior to the consummation of our initial business combination, the cost of a target
business as measured in dollars will increase, which may make it less likely that we are able to consummate such transaction.
Changes
in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results
of operations.
We
are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply
with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult,
time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and
those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to
comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business and results
of operations.
Risks
Relating to Restatement of Our Previously Issued Financial Statements
We
have identified a material weakness in our internal control over financial reporting. This material weakness could continue to adversely
affect our ability to report our results of operations and financial condition accurately and in a timely manner.
Following
the re-evaluation of the application of ASC 480-10-S99-3A to our accounting classification of the Public Shares, our management and our
audit committee concluded that it was appropriate to restate previously issued and audited financial statements as of and for the period
from April 12, 2021 (inception) to December 31, 2021.
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with GAAP. Our management is likewise required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose
any changes and material weaknesses identified through such evaluation of those internal controls. A material weakness is a deficiency,
or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material
misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
As
described elsewhere in this Amendment No. 1, we have identified a material weakness in our internal control over financial reporting
related to the Company’s application of ASC 480-10-S99-3A to its accounting classification of the Public Shares. As a result of this material weakness, our management has concluded that our internal control over financial reporting
was not effective as of December 31, 2021. Historically, a portion of the Public Shares was classified as permanent equity to maintain
shareholders’ equity greater than $5 million on the basis that the Company will not redeem its Public Shares in an amount that
would cause its net tangible assets to be less than $5,000,001, as described in the amended and restated memorandum and articles of association.
Pursuant to the Company’s re-evaluation of the Company’s application of ASC 480-10-S99-3A to its accounting classification
of the Public Shares, the Company’s management has determined that the Public Shares include certain provisions that require classification
of all of the Public Shares as temporary equity regardless of the net tangible assets redemption limitation contained in the amended
and restated memorandum and articles of association. For a discussion of management’s consideration of the material weakness identified
related to the Company’s application of ASC 480-10-S99-3A to its accounting classification of the Public Share, see “Note
2- Restatement of Previously Issued Financial Statements” to the accompanying financial statements, as well as Part II, Item 9A:
Controls and Procedures included in this Amendment No. 1.
As
described in Item 9A. “Controls and Procedures,” we have concluded that our internal control over financial reporting was
ineffective as of December 31, 2021 because material weaknesses existed in our internal control over financial reporting. We have taken
a number of measures to remediate the material weaknesses described therein; however, if we are unable to remediate our material weaknesses
in a timely manner or we identify additional material weaknesses, we may be unable to provide required financial information in a timely
and reliable manner and we may incorrectly report financial information. Likewise, if our financial statements are not filed on a timely
basis, we could be subject to sanctions or investigations by the stock exchange on which our Class A ordinary shares are listed, the
SEC or other regulatory authorities. Failure to timely file will cause us to be ineligible to utilize short form registration statements
on Form S-3 or Form S-4, which may impair our ability to obtain capital in a timely fashion to execute our business strategies of issue
shares to effect an acquisition. In either case, there could result a material adverse effect on our business. The existence of material
weaknesses or significant deficiencies in internal control over financial reporting could adversely affect our reputation or investor
perceptions of us, which could have a negative effect on the trading price of our stock. In addition, we will incur additional costs
to remediate material weaknesses in our internal control over financial reporting, as described in Item 9A. “Controls and Procedures”.
We
can give no assurance that the measures we have taken and plan to take in the future will remediate the material weakness identified
or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement
and maintain adequate internal control over financial reporting or circumvention of these controls. In addition, even if we are successful
in strengthening our controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify
irregularities or errors or to facilitate the fair presentation of our financial statements.