Item
1. BUSINESS
Overview
We are a blank check company
incorporated as a Delaware corporation and 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 or assets, which we refer to as our initial business
combination. We have generated no operating revenues to date, and we do not expect that we will generate operating revenues until we consummate
our initial business combination.
We have concentrated our efforts
on identifying technology and financial services technology, or fintech, companies that power transformation and innovation. Our expertise
lends itself well to pursuing platforms related to the financial services, real estate, insurance, ecommerce and related technology infrastructure
sectors, but we are not required to complete our initial business combination with a business in these industries and, as a result, we
may pursue a business combination outside of these industries. We expect to pursue global businesses but may also acquire a domestic company.
We do not intend to acquire companies that have speculative business plans or are excessively leveraged.
We believe our management
team has the skills and experience to identify, evaluate and consummate a business combination and is positioned to assist businesses
we acquire. However, our management team’s network and investing and operating experience do not guarantee a successful initial
business combination. The members of our management team are not required to devote any significant amount of time to our business and
are concurrently involved with other businesses. There is no guarantee that our current officers and directors will continue in their
respective roles, or in any other role, after our initial business combination, and their expertise may only be of benefit to us until
our initial business combination is completed. Past performance by our management team is not a guarantee of success with respect to any
business combination we may consummate.
At December 31, 2021, we had
not yet commenced operations. All activity through December 31, 2021 relates to the Company’s formation, its initial public offering,
and identifying a target company for our initial business combination.
The registration statement
for our initial public offering was declared effective on November 18, 2021. On November 23, 2021, we consummated the initial public offering
of 40,250,000 units generating gross proceeds of $402,500,000.
Simultaneously with the closing
of the initial public offering, we consummated the sale of 1,778,750 placement units at a price of $10.00 per unit in a private placement
to our sponsor, generating gross proceeds of $17,787,500.
Following the closing of the
initial public offering on November 23, 2021, an amount of $408,537,500 ($10.15 per unit) from the net proceeds of the sale of the units
in the initial public offering and the placement units was placed in a trust account and invested in U.S. government securities, within
the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”),
with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 of the Investment Company Act,
which invest only in direct U.S. government treasury obligations, until the earlier of: (i) the consummation of a business combination,
(ii) the redemption of any public shares in connection with a stockholder vote to amend our amended and restated certificate of incorporation
to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete a business combination during
the completion window; or (iii) the distribution of the trust account, if we are unable to complete a business combination within the
completion window or upon any earlier liquidation of us.
Business Strategy
We have sought to capitalize
on the significant technology, financial services, financial technology and banking experience and contacts of Daniel G. Cohen, our Chairman
of the Board, and Ryan Gilbert, our President and Chief Executive Officer, and our board of directors, to identify, evaluate and acquire
a technology or fintech business, although we may pursue a business combination outside of those industries. If we elect to pursue an
investment outside of those industries, our management’s expertise related to those industries may not be directly applicable to
its evaluation or operation, and the information contained in this prospectus regarding that industry might not be relevant to an understanding
of the business that we elect to acquire.
Our Chairman served as an
executive officer and/or director of FinTech Acquisition Corp., or FinTech I, a former blank check company which raised $100.0 million
in its initial public offering in February 2015 and completed its initial business combination when it acquired FTS Holding Corporation
in July 2016, which we refer to as the FinTech I Acquisition. Our Chairman also served as an executive officer and/or director of FinTech
Acquisition Corp. II, or FinTech II, a blank check company which raised $175.0 million in its initial public offering in January 2017
and completed its initial business combination when it acquired Intermex Holdings II in July 2018, which we refer to as the FinTech II
Acquisition. In addition, our Chairman served as Chief Executive Officer of FinTech Acquisition Corp. III, or FinTech III, a blank check
company which raised $345.0 million in its initial public offering in November 2018 and completed its initial business combination
with Paya, Inc. in October 2020, which we refer to as the FinTech III Acquisition. Further, our Chairman served as Chief Executive
Officer of FinTech Acquisition Corp. IV, or FinTech IV, a blank check company which raised $230.0 million in its initial
public offering in September 2020 and completed its initial business combination with PWP Holdings LP, in June 2021, which we
refer to as the FinTech IV Acquisition. Our Chairman currently serves as: Chief Executive Officer of FinTech Acquisition Corp. V
(NASDAQ: FTCV), or FinTech V, a blank check company which raised $250.0 million in its initial public offering in December 2020;
and Chief Executive Officer of FinTech Acquisition Corp. VI (NASDAQ: FTVI), or FinTech VI, a blank check company which raised $250.0 million
in its initial public offering in June 2021.
Our Chairman and Chief Financial
Officer also served as executive officers and/or directors of Insurance Acquisition Corp., or INSU I, a blank check company which raised
$150.7 million in its initial public offering in March 2019 and completed its initial business combination when it merged with affiliates
of Shift Technologies, Inc. in October 2020, which we refer to as the INSU I Acquisition. Our Chairman and Chief Financial Officer also
served as Chairman and Chief Financial Officer, respectively, of INSU Acquisition Corp. II , or INSU II, a blank check company which raised
$230 million in its initial public offering in September 2020 and completed its initial business combination when it merged with
Metromile, Inc. in February 2021, which we refer to as the INSU II Acquisition. Our Chairman and Chief Financial Officer currently serve
as Chairman and Chief Financial Officer, respectively, of INSU Acquisition Corp. III (NASAQ: IIII), or INSU III, a blank check company
that raised $250 million in its initial public offering in December 2020.
We believe that potential
sellers of target businesses will view the fact that members of our board and management team have successfully closed multiple business
combinations with vehicles similar to our company as a positive factor in considering whether or not to enter into a business combination
with us. However, past performance is not a guarantee of success with respect to any business combination we may consummate.
Mr. Cohen, our Chairman,
and Mr. Gilbert, our Chief Executive Officer, have extensive experience in the technology and financial services industries, generally,
and the financial technology industry, in particular, as well as extensive experience in operating technology and financial services companies
in a public company environment.
Mr. Cohen, with over 22 years
of experience in financial services and financial technology, is the Chairman of the Board of Directors and of the Board of Managers of
Cohen & Company, LLC, and serves as the President and Chief Executive of the European Business of Cohen & Company Inc. (NYSE American:
COHN), a financial services company with approximately $2.24 billion in assets under management as of September 30, 2021, and as President,
a director and the Chief Investment Officer of Cohen & Company Inc.’s indirect majority owned subsidiary, Cohen & Company
Financial Limited (formerly known as EuroDekania Management Limited), a Financial Conduct Authority regulated investment advisor and broker
dealer focusing on the European capital markets (“CCFL”). Mr. Cohen previously served as Vice Chairman of the Board of Directors
and of the Board of Managers of Cohen & Company, LLC. Mr. Cohen served as the Chief Executive Officer and Chief Investment Officer
of Cohen & Company Inc. from December 16, 2009 to September 16, 2013 and as the Chairman of the Board of Directors from October 6,
2006 to September 16, 2013. Mr. Cohen served as the executive Chairman of Cohen & Company Inc. from October 18, 2006 to December 16,
2009. In addition, Mr. Cohen served as the Chairman of the Board of Managers of Cohen & Company, LLC from 2001 to September 16, 2013,
as the Chief Investment Officer of Cohen & Company, LLC from October 2008 to September 16, 2013, and as Chief Executive Officer of
Cohen & Company, LLC from December 16, 2009 to September 16, 2013. Mr. Cohen served as the Chairman and Chief Executive Officer of
J.V.B. Financial Group, LLC (formerly C&Co/PrinceRidge Partners LLC), Cohen & Company’s indirect broker dealer subsidiary
(“JVB”), from July 19, 2012 to September 16, 2013. Mr. Cohen is also a founder, the former Chief Executive Officer and the
former Chairman of The Bancorp, Inc. (NASDAQ: TBBK), which we refer to as Bancorp, a financial holding company with over $6.3 billion
of total assets as of September 30, 2021, whose principal subsidiary is The Bancorp Bank, that provides a wide range of commercial and
retail banking products and services to both regional and national markets. Mr. Cohen currently serves as the Chief Executive Officer
of FinTech V and FinTech VI. Mr. Cohen served as Chairman of INSU I until the INSU I Acquisition, as Chairman of INSU II until the
INSU II Acquisition, as Chief Executive Officer, President and a director of FinTech I until the FinTech I Acquisition, as Chief
Executive Officer and a director of FinTech II until the FinTech II Acquisition, as Chief Executive Officer of FinTech III until the FinTech
III Acquisition and as Chief Executive Officer of FinTech IV until the FinTech IV Acquisition. Mr. Cohen also recently joined FTAC
Hera Acquisition Corp., or FTAC Hera, as its President and Chief Executive Officer, FTAC Parnassus Acquisition Corp., or FTAC Parnassus,
as its Chairman, and INSU Acquisition Corp. IV, or INSU IV, as its Chairman, each a blank check company formed for the purpose of effecting
its own initial business combination. . He is also a past Chief Executive Officer of RAIT Financial Trust, which we refer to as RAIT,
formerly a publicly traded real estate finance company focused on the commercial real estate industry, from December 2006 when it merged
with Taberna Realty Finance Trust, to February 2009, and served as a trustee from the date RAIT acquired Taberna in February 2009 until
his resignation from that position in February 2010. From 1998 to 2000, Mr. Cohen served as the Chief Operation Officer of Resource America,
Inc., formerly a publicly traded asset management company with interests in energy, real estate and financial services. Mr. Cohen was
also a past director of Jefferson Bank of Pennsylvania, a commercial bank and subsidiary of JeffBanks, Inc., a publicly traded bank holding
company, which we refer to as JeffBanks, acquired by Hudson United Bancorp in 1999.
Mr. Gilbert brings over
20 years of global financial services expertise as an entrepreneur, angel investor, venture investor, and advisor. His public company
exits include Square and Eventbrite. Mr. Gilbert previously served as an advisor to Locust Walk Acquisition Corp. and currently serves
as an advisor to Phoenix Biotech Acquisition Corp. He currently serves as President and Chief Executive Officer of FTAC Parnassus, a blank
check company formed for the purpose of effecting its own initial business combination. He was most recently President and Chief Executive
Officer of FTAC Olympus Acquisition Corp., or FTAC Olympus, a blank check company which raised $754.0 million in its initial public offering
in August 2020 and that merged with Payoneer (NASDAQ: PAYO) in June 2021. Mr. Gilbert is founder and General Partner of Launchpad
Capital, a venture capital fund. He was most recently a General Partner at Propel Venture Partners, a venture capital fund backed by BBVA
Group. He currently serves on the boards of directors of Propel Venture Partners portfolio companies Guideline, Inc., Grabango Co. and
Steady Platform Inc. Mr. Gilbert serves as the executive chairman of SmartBizLoans, a small business lending marketplace that he
co-founded as an entrepreneur-in-residence at Venrock. Mr. Gilbert is an independent director of bKash, Bangladesh’s largest remittance
and mobile banking platform, and a director of River City Bank, a $3.6 billion community bank based in Sacramento, CA. He was previously
co-founder and Chief Executive Officer of real estate payments company PropertyBridge (acquired by MoneyGram International).
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 on the interest earned on the trust account) at the time of our signing
a definitive agreement in connection with our initial business combination. If the 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 transactions and we will treat the
target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder approval, as
applicable. Our board of directors will make the determination as to the fair market value of our initial business combination. If our
board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an
opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect
to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make an independent
determination of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced
with the business of a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets
or prospects. Notwithstanding the foregoing, if we are not then listed on NASDAQ for whatever reason, we would no longer be required to
meet the foregoing 80% fair market value test.
We anticipate structuring our initial business
combination either (i) in such a way so that the post-transaction company in which our public stockholders own shares will own or
acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such a way so that the post-transaction company
owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management
team or stockholders, or for other reasons. However, we will only complete an initial business combination if the post-transaction company
owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target
sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company
owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the 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 initial business
combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the
outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result
of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own
less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the 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 taken into account for purposes of NASDAQ’s 80% fair market value test.
In addition to any potential business candidates
we may identify on our own, we anticipate that other target business candidates will be brought to our attention from various unaffiliated
sources, including investment market participants, private equity funds and large business enterprises seeking to divest non-core assets
or divisions.
In evaluating a prospective target business, we
expect to conduct an extensive due diligence review which will encompass, as applicable and among other things, meetings with incumbent
management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, and a review of financial
and other information about the target and its industry.
We are not prohibited from pursuing an initial
business combination with a company that is affiliated with our sponsor, officers or directors, nor are we prohibited from partnering,
submitting joint bids, or entering into any similar transaction with our sponsor, or an affiliate of our sponsor, in the pursuit of an
initial business combination. If we seek to complete an initial business combination with such a company or we partner with our sponsor,
or any of its affiliates in our pursuit of an initial business combination, we, or a committee of independent directors, will obtain an
opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm with respect to fair market
value that the business combination is fair to our stockholders from a financial point of view.
As more fully discussed in “Certain Relationships
and Related Transactions; and Director Independence — Conflicts of Interest,” if any of our officers or directors becomes
aware of a business combination opportunity that falls within the line of business of any entity to which he or she has pre-existing fiduciary
or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting
such business combination opportunity to us. Certain of our directors currently have relevant fiduciary duties or contractual obligations
that may take priority over their duties to us. However, our sponsor, officers and directors may participate in the formation of, or become
an officer or director of, any other blank check company prior to completion of our initial business combination. As a result, our sponsor,
officers or directors could have conflicts of interest in determining whether to present business combination opportunities to us or to
any other blank check company with which they may become involved. We do not believe that any potential conflicts would materially affect
our ability to complete our initial business combination.
Effecting Our Initial Business Combination
General
We are not presently engaged
in, and we will not engage in, any operations until our initial business combination. We intend to effectuate our initial business combination
using cash from the proceeds of the initial public offering and the private placement, our capital stock, debt or a combination of these
as the consideration to be paid in our initial business combination.
If we pay for our initial
business combination using stock or debt securities, or we do not use all of the funds released from the trust account for payment of
the purchase price in connection with our business combination or for redemptions of our Class A common stock, we may apply the balance
of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations
of acquired businesses, the payment of principal or interest due on indebtedness incurred in consummating our initial business combination,
to fund the purchase of other companies or for working capital.
There is no current basis
for stockholders to evaluate the possible merits or risks of the target business with which we may ultimately complete our initial business
combination. Although our management will assess the risks inherent in a particular target business with which we may combine, we cannot
assure you that this assessment will result in our identifying all risks that a target business may encounter. Furthermore, some of those
risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely impact
a target business.
NASDAQ rules require that
our initial business combination be with one or more target businesses that together have a fair market value equal to at least 80% of
the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of our
signing a definitive agreement in connection with our initial business combination. However, if our securities are not listed on NASDAQ
or another securities exchange, we will no longer be subject to that requirement.
We may seek to raise additional
funds through a private offering of debt or equity securities to finance our initial business combination, and we may effectuate an initial
business combination using the proceeds of such offering rather than using the amounts held in the trust account. Subject to compliance
with applicable securities laws, we would consummate such financing only simultaneously with the consummation of our initial business
combination. In the case of an initial business combination funded with assets other than the trust account assets, our tender offer documents
or proxy materials disclosing the initial business combination would disclose the terms of the financing and, only if required by law
or NASDAQ, we would seek stockholder approval of such financing. There are no prohibitions on our ability to raise funds privately or
through loans in connection with our initial business combination. At this time, we are not a party to any arrangement or understanding
with any third party with respect to raising any additional funds through the sale of securities or otherwise.
Sources of Acquisition Candidates
We anticipate that target
business candidates will be brought to our attention from various unaffiliated sources, including investment bankers, attorneys, accountants,
venture capital funds, private equity funds, leveraged buyout funds, management buyout funds, brokers and other members of the financial
community and corporate executives. These target candidates may present solicited or unsolicited proposals. Such sources became aware
that we were seeking a business combination candidate by a variety of means, including publicly available information relating to the
initial public offering, public relations and marketing efforts or direct contact by management following the completion of the initial
public offering.
Our officers and directors,
as well as their affiliates, may also bring to our attention target business candidates of which they become aware through their contacts.
While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions
on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting
fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage
a finder only if our management determines that the use of a finder may bring opportunities to us that may not otherwise be available
to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest
to pursue. Payment of finder’s fees is customarily tied to completion of a transaction, in which case any such fee will be paid
out of the funds held in the trust account. In no event, however, will our sponsor or any of our officers or directors, or any entity
with which they are affiliated, be paid any finder’s fee, consulting fee or other compensation prior to, or for any services they
render in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is),
other than (i) repayment of loans made to us prior to the date of the initial public offering by our sponsor to cover offering-relating
and organization expenses, (ii) repayment of loans that our sponsor, members of our management team or any of their respective affiliates
may make to finance transaction costs in connection with an intended initial business combination (provided that if we do not consummate
an initial business combination, we may use working capital held outside the trust account to repay such loaned amounts, but no proceeds
from our trust account would be used for such repayment), (iii) payments to our sponsor or its affiliate of a total of $40,000 per month
for office space, administrative and shared personnel support services, (iv) at the closing of our initial business combination, at the
option of our management team, a customary advisory fee, if any, to affiliates of our sponsor, in an amount that constitutes a market
standard advisory fee for comparable transactions and services provided (the fees of which are not currently estimable and have no established
limits); (v) payment of customary fees for financial advisory services (including to CCM); and (vi) to reimburse our sponsor, officers
or directors for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination. Any
advisory fee payable to an affiliate of our sponsor will be negotiated on an arms-length basis and will require approval of our audit
committee. None of the initial holders, our officers, our directors or any entity with which they are affiliated will be allowed to receive
any compensation, finder’s fees or consulting fees from a prospective acquisition target in connection with a contemplated acquisition
of such target by us. Although some of our officers and directors may enter into employment or consulting agreements with the acquired
business following our initial business combination, the presence or absence of any such arrangements will not be used as a criterion
in our selection process of an acquisition candidate.
We are not prohibited from
pursuing an initial business combination with a company that is affiliated with our sponsor, officers, directors or their affiliates.
Additionally, we are not prohibited from partnering, submitting joint bids, or entering into any similar transaction with such persons
in the pursuit of an initial business combination. If we seek to complete an initial business combination with such a company or we partner
with such persons in our pursuit of an initial business combination, we, or a committee of independent directors, would obtain an opinion
from an independent investment banking firm that is a member of FINRA or an independent accounting firm, that such an initial business
combination is fair to our stockholders from a financial point of view. Generally, such opinion is rendered to a company’s board
of directors and investment banking firms may take the view that stockholders may not rely on the opinion. Such view will not impact our
decision on which investment banking firm to hire.
Unless we consummate our initial
business combination with an affiliated entity, we are not required to obtain a financial fairness opinion from an independent investment
banking firm. If we do not obtain such an opinion, our stockholders will be relying on the judgment of our board of directors, who will
determine fair market value and fairness based on standards generally accepted by the financial community. The application of such standards
would involve a comparison, from a valuation standpoint, of our business combination target to comparable public companies, as applicable,
and a comparison of our contemplated transaction with such business combination target to other then-recently announced comparable private
and public company transactions, as applicable. The application of such standards and the basis of our board of directors’ determination
will be discussed and disclosed in our tender offer or proxy solicitation materials, as applicable, related to our initial business combination.
If any of our officers or directors becomes aware of an initial business combination opportunity that falls within the line of business
of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such business
combination opportunity to such entity prior to presenting such business combination opportunity to us. Our officers and directors currently
have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.
Selection of a target business and structuring of our 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 on the interest earned on the trust account) at
the time of our signing a definitive agreement in connection with our initial business combination. We refer to this as the 80% of fair
market value test. The fair market value of our initial business combination will be determined by our board of directors based upon one
or more standards generally accepted by the financial community, such as discounted cash flow valuation, a valuation based on trading
multiples of comparable public businesses or a valuation based on the financial metrics of M&A transactions of comparable businesses.
Even though our board of directors will rely on generally accepted standards, our board of directors will have discretion to select the
standards employed. In addition, the application of the standards generally involves a substantial degree of judgment. Accordingly, investors
will be relying on the business judgment of the board of directors in evaluating the fair market value of the target or targets. The proxy
solicitation materials or tender offer documents used by us in connection with any proposed transaction will provide public stockholders
with our analysis of our satisfaction of the 80% of fair market value test, as well as the basis for our determinations. If our board
of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion
from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the
satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination
of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the
business of a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects.
We do not intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. Subject
to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective
target businesses, although we will not be permitted to effectuate our initial business combination with another blank check company or
a similar company with nominal operations.
In any case, we will only
complete an initial business combination in which we own or acquire 50% or more of the outstanding voting securities of the target or
otherwise acquire a controlling interest in the target sufficient for it not to be required to register as an investment company under
the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets of a target business or businesses,
the portion of such business or businesses that are owned or acquired by the post-transaction company is what will be taken into account
for purposes of NASDAQ’s 80% fair market value test. There is no basis for stockholders to evaluate the possible merits or risks
of any target business with which we may ultimately complete our initial business combination.
To the extent we effect our
initial business combination with a company or business that may be financially unstable or in its early stages of development or growth
we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks
inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
In evaluating a prospective
business target, we expect to conduct a thorough due diligence review, which may encompass, among other things, meetings with incumbent
management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial
and other information that will be made available to us.
The time required to select
and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process,
are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of
a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses
and will reduce the funds we can use to complete another business combination.
Lack of business diversification
For an indefinite period of
time after consummation of our initial business combination, the prospects for our success may depend entirely on the future performance
of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or
several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in
a single line of business. In addition, we intend to focus our search for an initial business combination in a single industry. By consummating
a business combination with only a single entity, our lack of diversification may:
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subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and |
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cause us to depend on the marketing and sale of a single product or limited number of products or services. |
Limited ability to evaluate the target’s management team
Although we closely scrutinize
the management of a prospective target business when evaluating a target business, our assessment of the target business’ management
may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage
a public company. The future role of members of our management team, if any, in the target business cannot presently be stated with any
certainty. While it is possible that one or more of our directors will remain associated in some capacity with us following a business
combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to a business combination. Moreover,
we cannot assure you that members of our management team will have experience or knowledge relating to the operations of the particular
target business.
We cannot assure you that
any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether
any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following a business combination,
we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we
will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience
necessary to enhance the incumbent management.
Stockholders may not have the ability to approve
a business combination
We may not seek stockholder
approval before we effect our initial business combination as not all business combinations require stockholder approval under applicable
state law. However, we will seek stockholder approval if it is required by law or NASDAQ, or we may decide to seek stockholder approval
for business or other reasons. Presented in the table below is a table of the types of initial business combinations we may consider and
whether stockholder approval is currently required under Delaware law for each such transaction.
Type of Transaction |
|
Whether
Stockholder
Approval is
Required |
Purchase of assets |
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No |
Purchase of stock of target not involving a merger with the company |
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No |
Merger of target into a subsidiary of the company |
|
No |
Merger of the company with a target |
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Yes |
So long as we obtain and maintain
a listing for our securities on NASDAQ, stockholder approval would be required for our initial business combination if, for example:
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we issue shares of Class A common stock that will be equal to or in excess of 20% of the number of shares of our Class A common stock then outstanding (other than in a public offering); |
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any of our directors, officers or substantial stockholders (as defined by NASDAQ rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of common stock could result in an increase in outstanding common shares or voting power of 5% or more; or |
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the issuance or potential issuance of common stock will result in our undergoing a change of control. |
Permitted purchases of our securities
If we seek stockholder approval
of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender
offer rules, our sponsor, directors, officers or their respective affiliates may purchase public securities in the open market or in privately
negotiated transactions either prior to or following the consummation of our initial business combination, although as of the date of
this Annual Report they have no commitments, plans or intentions to engage in such transactions. If they do effect such purchases, we
anticipate that they would approach a limited number of large holders of our securities that have voted against the business combination
or sought redemption of their shares, or that have indicated an intention to do so, and engage in direct negotiations for the purchase
of such holders’ positions. All holders approached in this manner would be institutional or sophisticated holders. There is no limit
on the number of shares they may acquire. Our sponsor, directors, officers, advisors or their affiliates will not make any such purchases
when they are in possession of any material nonpublic information not disclosed to the seller or during a restricted period under Regulation
M under the Exchange Act or in transactions that would violate Section 9(a)(2) or Rule 10(b)-5 under the Exchange Act. Although they do
not currently anticipate paying any premium purchase price for such public shares, there is no limit on the price they may pay. They may
also enter into transactions to provide such holders with incentives to acquire shares or vote their shares in favor of an initial business
combination. No funds in the trust account may be used to effect purchases of public securities in the open market or in privately negotiated
transactions.
The purpose of such purchases
of public securities would be to (i) increase the likelihood of obtaining stockholder approval of the business combination or (ii) to
satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at
the closing of the business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases
of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the
warrantholders for approval in connection with our initial business combination. This may result in the consummation of a business combination
that may not otherwise have been possible.
As a consequence of any such
purchases by our sponsor, directors, officers or their affiliates, the public “float” of our common stock may be reduced and
the number of beneficial holders of our securities may be reduced, which may make it difficult to obtain the continued listing of our
securities on NASDAQ or another national securities exchange in connection with our initial business combination.
Our sponsor, officers, directors
and/or their respective affiliates anticipate that they will identify the public stockholders with whom they may pursue privately negotiated
purchases through either direct contact by the public stockholders or by our receipt of redemption requests or votes against the business
combination submitted by such public stockholders following our mailing of proxy materials in connection with our initial business combination.
The sellers of any shares so purchased by our sponsor, officers, advisors, directors and/or their affiliates would, as part of the sale
arrangement, revoke their election to redeem such shares and withdraw their vote against the business combination. The terms of such purchases
would operate to facilitate our ability to consummate a proposed business combination by potentially reducing the number of shares redeemed
for cash.
Any purchases by our sponsor,
officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to
the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under
Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order
for the safe harbor to be available to the purchaser. Any such purchases will be reported pursuant to Section 13 and Section 16 of the
Exchange Act to the extent such purchases are subject to such reporting requirements.
Redemption rights for public stockholders upon consummation of our
initial business combination
We will provide our public
stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the consummation of our initial
business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two
business days prior to the consummation of our initial business combination, including any amounts representing deferred underwriting
commissions and interest earned on the trust account (net of taxes payable), divided by the number of then outstanding public shares,
subject to the limitations described herein. The amount in the trust account is approximately $10.15 per public share (based on the trust
account balance as of December 31, 2021). The per share amount we will distribute to investors who properly redeem their shares will not
be reduced by the deferred underwriting commissions we will pay to the underwriter. Our initial stockholders, officers and directors have
entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder
shares and public shares they may hold in connection with the completion of our initial business combination. However, our sponsor, officers
and directors will be entitled to redemption rights with respect to any public shares held by them if we fail to consummate a business
combination or liquidate within the completion window.
Manner of Conducting Redemptions
We will provide our public
stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination
either in connection with a stockholder meeting called to approve the business combination or by means of a tender offer. The decision
as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely
in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction
would require us to seek stockholder approval under the law or stock exchange listing requirement.
We currently intend to conduct
redemptions pursuant to a stockholder vote unless stockholder approval is not required by applicable law or stock exchange listing requirement
and we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other reasons.
If a stockholder vote is not
required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated
certificate of incorporation:
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conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of the proposed business combination, and |
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file tender offer documents with the SEC prior to consummating our initial business combination that will contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. |
Upon the public announcement
of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate
any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A common stock in the open market, in order to comply
with Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions
pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a)
under the Exchange Act, and we will not be permitted to consummate our initial business combination until the expiration of the tender
offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public
shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our Class A common
stock to become a “penny stock” (as such term is defined in Rule 3a5-1 of the Exchange Act, or any greater net tangible asset
or cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders tender
more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination.
If, however, stockholder approval
of the transaction is required by law or NASDAQ, or we decide to obtain stockholder approval for business or other reasons, we will:
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and |
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file proxy materials with the SEC. |
We expect that a final proxy
statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy
statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct
redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently intend to comply with the substantive
and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to maintain our NASDAQ listing
or Exchange Act registration.
If we seek stockholder approval,
we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor
of the initial business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of
outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the
company entitled to vote at such meeting. Our initial stockholders, officers and directors will count towards this quorum and have agreed
to vote any founder shares, placement shares and any public shares held by them in favor of our initial business combination. We expect
that at the time of any stockholder vote relating to our initial business combination, our initial stockholders and their permitted transferees
will own at least 28.2% of our outstanding shares of common stock entitled to vote thereon. These quorum and voting thresholds and agreements
may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public
shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.
Our amended and restated certificate
of incorporation provides that in no event will we redeem our public shares in an amount that would cause our Class A common stock to
become a “penny stock” upon consummation of our initial business combination, and, in any event, the terms of the proposed
business combination may require a greater amount of net tangible assets. For example, the proposed business combination may require:
(i) cash consideration to be paid to the target or members of its management team, (ii) cash to be transferred to the target for working
capital or other general corporate purposes or (iii) the allocation of cash to satisfy other conditions in accordance with the terms of
the proposed business combination. If the aggregate cash consideration we would be required to pay for all shares of Class A common stock
that are validly tendered plus the amount of any cash payments required pursuant to the terms of the proposed business combination exceeds
the aggregate amount of cash available to us, taking into consideration the requirement that we maintain net tangible assets sufficient
so that our Class A common stock is not considered a “penny stock” or such greater amount depending on the terms of our potential
business combination, we will not consummate the business combination and any shares of Class A common stock tendered pursuant to the
tender offer will be returned to the holders thereof following the expiration of the tender offer.
Limitation on redemption upon consummation
of a business combination if we seek stockholder approval
Notwithstanding the foregoing,
if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder,
together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group”
(as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to an aggregate of more
than 20.0% of the shares sold in the initial public offering without our prior consent. We believe the restriction described above will
discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise
their redemption rights as a means to force us or our sponsor or its affiliates to purchase their shares at a significant premium to the
then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of
20.0% of the shares sold in the initial public offering could threaten to exercise its redemption rights against a business combination
if such holder’s shares are not purchased by us or our sponsor or its affiliates at a premium to the then-current market price or
on other undesirable terms. By limiting our stockholders’ ability to redeem to no more than 20.0% of the shares sold in the initial
public offering, we believe we will limit the ability of a small number of stockholders to unreasonably attempt to block our ability to
complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing
condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability
to vote all of their shares (including all shares held by those stockholders that hold more than 20.0% of the shares sold in the initial
public offering) for or against our initial business combination. Our initial holders, sponsor, officers and directors have, pursuant
to a letter agreement entered into with us, waived their right to have any founder shares or public shares held by them redeemed in connection
with our initial business combination. Unless any of our other affiliates acquires founder shares through a permitted transfer from an
initial stockholder, and thereby becomes subject to the letter agreement, no such affiliate is subject to this waiver. However, to the
extent any such affiliate acquired public shares in the initial public offering or thereafter through open market purchases, it would
be a public stockholder and restricted from seeking redemption rights with respect to an aggregate of more than 20.0% of the shares sold
in the initial public offering.
Tendering stock certificates in connection
with redemption rights
We may require our public
stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”
to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents mailed to such holders,
or up to two business days prior to the vote on the proposal to approve our initial business combination in the event we distribute proxy
materials, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal
At Custodian) System, at the holder’s option, rather than simply voting against the initial business combination. The tender offer
or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination
will indicate whether we are requiring public stockholders to satisfy such delivery requirements, which will include the requirement that
any beneficial owner on whose behalf a redemption right is being exercised must identify itself in order to validly redeem its shares.
Accordingly, a public stockholder would have from the time we send out our tender offer materials until the close of the tender offer
period, or up to two business days prior to the vote on the initial business combination if we distribute proxy materials, as applicable,
to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short exercise period, it is advisable
for stockholders to use electronic delivery of their public shares.
There is a nominal cost associated
with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer
agent will typically charge the tendering broker $100.00 and it would be up to the broker whether or not to pass this cost on to the redeeming
holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender
their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery
must be effectuated.
The foregoing is different
from the procedures used by many blank check companies. In order to perfect redemption rights in connection with their business combinations,
many blank check companies would distribute proxy materials for the stockholders’ vote on an initial business combination, and a
holder could simply vote against a proposed initial business combination and check a box on the proxy card indicating such holder was
seeking to exercise his redemption rights. After the initial business combination was approved, the company would contact such stockholder
to arrange for him to deliver his certificate to verify ownership. As a result, the stockholder then had an “option window”
after the consummation of the business combination during which he could monitor the price of the company’s stock in the market.
If the price rose above the redemption price, he could sell his shares in the open market before actually delivering his shares to the
company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder
meeting, would become “option” rights surviving past the consummation of the initial business combination until the redeeming
holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s
election to redeem is irrevocable once the business combination is approved.
Any request to redeem such
shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials or the date of the stockholder
meeting set forth in our proxy materials, as applicable. Furthermore, if a holder of a public share delivers its certificate in connection
with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such
holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds
to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of
an initial business combination.
If the initial business combination
is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be
entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates
delivered by public holders who elected to redeem their shares.
If our proposed initial business
combination is not consummated, we may continue to try to consummate a business combination with a different target until the expiration
of the completion window.
Redemption of public shares and liquidation
if no initial business combination
Our amended and restated certificate
of incorporation provides that we have only the completion window to complete our initial business combination. If we are unable to consummate
our initial business combination within the completion window, we will distribute the aggregate amount then on deposit in the trust account,
pro rata to our public stockholders by way of redemption and cease all operations except for the purposes of winding up of our affairs.
If we have not consummated a business combination within the completion window, 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 all public shares then outstanding
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any amounts representing
interest earned on the trust account (net of taxes payable) and up to $100,000 to pay dissolution expenses, divided by the number of then
outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the
right to receive further 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 stockholders and our board of directors, dissolve and liquidate, subject in
each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There
will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete
our initial business combination within the completion window.
The initial holders, our officers
and directors have agreed to waive their redemption rights with respect to their founder shares and placement shares, as applicable, (i)
in connection with the consummation of a business combination, (ii) in connection with a stockholder vote to approve an amendment to our
amended and restated certificate of incorporation (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 have not completed
our initial business combination within the completion window or (B) with respect to any other provision relating to stockholders’
rights or pre-initial business combination activity and (iii) if we fail to consummate a business combination within the completion window
or if we liquidate prior to the expiration of the completion window. However, the initial holders and our officers and directors will
be entitled to redemption rights with respect to any public shares held by them if we fail to consummate a business combination within
the completion window.
The underwriter has agreed
to waive its rights to deferred underwriting commissions held in the trust account if we do not consummate a business combination and
subsequently liquidate and, in such event, the deferred underwriting commissions held in the trust account will be available to fund the
redemption of our public shares.
Our initial stockholders,
executive officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our
amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public
shares if we do not complete our initial business combination within the completion window unless we provide our public stockholders with
the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (net
of taxes payable), divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount
that would cause our Class A common stock to become a “penny stock” (as such term is defined in Rule 3a51-1 of the Exchange
Act). If this optional redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy
this requirement, we would not proceed with the amendment or the related redemption of our public shares at such time.
We will pay the costs of any
liquidation from the net proceeds from the initial public offering and the private placement held out of trust, and up to $100,000 of
the interest income on the trust account (net of any taxes payable), and the balance of loans from our sponsor or one of its affiliates
for working capital purposes and to pay expenses to identify an acquisition target and consummate an initial business combination, although
we cannot assure you that there will be sufficient funds for such purposes.
If we were to expend all of
the net proceeds of the initial public offering and the private placement, other than the proceeds deposited in the trust account, and
without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by stockholders upon
our dissolution would be approximately $10.15. The proceeds deposited in the trust account could, however, become subject to the claims
of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share
redemption amount received by stockholders will not be less than the $10.15 per public share initially on deposit in the trust account.
Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision
for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make
any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we
will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have
all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other
entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies
held in the trust account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements or
even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited
to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability
of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the
trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management
will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed
a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
If we do not obtain a waiver from a third party, we will obtain the written consent of our sponsor before our entering into an agreement
with such third party. 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 and where our sponsor executes a written consent. In addition, there is no guarantee that such entities will agree to waive any
claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek
recourse against the trust account for any reason. In order to protect the amounts held in the trust account, pursuant to a written agreement,
FTAC Zeus Sponsor, LLC, has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered
or products sold to us, or a prospective target business with which we have discussed entering into a definitive transaction agreement,
reduce the amounts in the trust account to below $10.15 per share, except as to any claims by a third party who executed a waiver of rights
to seek access to the trust account and except as to any claims under our indemnity of the underwriter of the initial public offering
against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable
against a third party, FTAC Zeus Sponsor, LLC will not be responsible to the extent of any liability for such third party claims. We cannot
assure you, however, that FTAC Zeus Sponsor, LLC will be able to satisfy those obligations. We have not independently verified whether
FTAC Zeus Sponsor, LLC has sufficient funds to satisfy its indemnity obligations, we have not asked FTAC Zeus Sponsor, LLC to reserve
for such obligations and we believe that its only assets are securities of our company. Therefore, we cannot assure you that FTAC Zeus
Sponsor, LLC will be able to satisfy those obligations. We believe the likelihood of FTAC Zeus Sponsor, LLC having to indemnify the trust
account is limited because we will endeavor to have all third parties that provide products or services to us and prospective target businesses
execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account.
If the proceeds in the trust
account are reduced below $10.15 per public share and FTAC Zeus Sponsor, LLC asserts that it is unable to satisfy any applicable obligations
or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take
legal action against FTAC Zeus Sponsor, LLC to enforce its indemnification obligations. While we currently expect that our independent
directors would take legal action on our behalf against FTAC Zeus Sponsor, LLC to enforce its indemnification obligations to us, it is
possible that our independent directors in exercising their business judgment may choose not to do so in a particular instance. Accordingly,
we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.15 per
public share.
We will have access to the
net proceeds from the initial public offering and the private placement held out of trust with which to pay any such potential claims
(including costs and expenses incurred in connection with our liquidation). In the event that we liquidate and it is subsequently determined
that the reserve for claims and liabilities is insufficient, stockholders who received funds from our trust account could be liable for
claims made by creditors.
Under the DGCL, stockholders
may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution.
The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares if we do not
consummate our initial business combination within the completion window may be considered a liquidation distribution under Delaware law.
If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision
for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation,
a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating
distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser
of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder
would be barred after the third anniversary of the dissolution.
Furthermore, if the pro rata
portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not consummate
our initial business combination within the completion window is not considered a liquidation distribution under Delaware law and such
redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors
could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidation distribution.
If we have not consummated a business combination within the completion window, or earlier at the discretion of our board, 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 all public shares then outstanding at a per-share price, payable in cash, equal to the aggregate amount then on deposit
in the trust account, including any amounts representing interest earned on the trust account, less any interest released to us to pay
our franchise and income taxes and up to $100,000 to pay dissolution expenses, divided by the number of then outstanding public shares,
which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further
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 stockholders and our board of directors, dissolve and liquidate, subject in each case to our
obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our
intention to redeem our public shares as soon as reasonably possible following the expiration of the completion window and, therefore,
we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of
distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such
date.
Because we will not be complying
with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for
our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent 10 years. However,
because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective
target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or
prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we will seek to
have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other
entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies
held in the trust account.
As a result of this obligation
and FTAC Zeus Sponsor, LLC’s indemnification of the trust account against certain claims as previously described in this section,
we believe that the claims that could be made against us will be significantly limited and that the likelihood that any claim that would
result in any liability extending to the trust account is remote. Further, FTAC Zeus Sponsor, LLC may be liable only to the extent necessary
to ensure that the amounts in the trust account are not reduced below $10.15 per public share, and will not be liable as to any claims
under our indemnity of the underwriter of the initial public offering against certain liabilities, including liabilities under the Securities
Act. In the event that an executed waiver is deemed to be unenforceable against a third party, FTAC Zeus Sponsor, LLC will not be responsible
to the extent of any liability for such third-party claims.
If we file a bankruptcy petition
or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject
to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over
the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to
return $10.15 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition
is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor
and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy
court could seek to recover all amounts received by our stockholders. Furthermore, our board may be viewed as having breached its fiduciary
duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by
paying public stockholders from the trust account prior to addressing the claims of creditors.
We cannot assure you that
claims will not be brought against us for these reasons.
Our public stockholders will
be entitled to receive funds from the trust account only in the event of the redemption of our public shares if we do not consummate a
business combination within the completion window. In the event we seek stockholder approval in connection with our initial business combination,
a stockholder’s voting in connection with the business combination alone will not result in a stockholder’s redeeming its
shares for an applicable pro rata share of the trust account. Such stockholder must have also exercised its redemption rights described
above.
Competition
In identifying, evaluating
and selecting a target business for our initial business combination, we encounter intense competition from other entities having a business
objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds and operating businesses
seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting business
combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other
resources than us. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent
limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash to our
public stockholders who exercise their redemption rights will reduce the resources available to us for an initial business combination.
In addition, the number of our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by
certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business
combination.
Facilities
We currently maintain our
executive offices at 2929 Arch Street, Suite 1703, Philadelphia, PA 19104-2870. The cost for our use of this space is included in the
$40,000 per month fee we pay to our sponsor or its affiliate for office space, administrative and shared personnel support services. We
consider our current office space adequate for our current operations.
Employees
We currently have two executive
officers. These individuals are not obligated to devote any specific number of hours to our affairs but they devote as much of their time
as they deem necessary to our affairs until we have completed our initial business combination. The amount of time they devote in any
time period varies based on whether a target business has been selected for our initial business combination and the stage of the business
combination process we are in. We do not intend to have any full time employees prior to the consummation of our initial business combination.
Periodic Reporting and Financial Information
We have registered our units,
Class A common stock and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual,
quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports contain financial
statements audited and reported on by our independent registered public accountants. The SEC maintains an Internet site that contains
reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.
We will provide stockholders
with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials
sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared
in accordance with GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited
in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential targets we may conduct
an initial business combination with because some targets may be unable to provide such statements in time for us to disclose such statements
in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. We cannot assure
you that any particular target business identified by us as a potential acquisition candidate will have financial statements prepared
in accordance with the above requirements or that the potential target business will be able to prepare its financial statements in accordance
with the above requirements. To the extent that these requirements cannot be met, we may not be able to acquire the proposed target business.
While this may limit the pool of potential acquisition candidates, we do not believe that this limitation will be material.
We are required to evaluate
and report on our internal control procedures over financial reporting for the fiscal year ending December 31, 2022 as required by the
Sarbanes-Oxley Act. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their
internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase
the time and costs necessary to complete any such acquisition.
We are an “emerging
growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take
advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging
growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section
404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,
and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any
golden parachute payments not previously approved. If some stockholders find our securities less attractive as a result, there may be
a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of
the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided
in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging
growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of the initial
public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large
accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates equals or exceeds $700 million
as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities
during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with
it in the JOBS Act.
Additionally, we are a “smaller
reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced
disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller
reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates equals
or exceeds $250 million as of the prior June 30th, or (2) our annual revenues equaled or exceeded $100 million during such completed fiscal
year and the market value of our common stock held by non-affiliates equals or exceeds $700 million as of the prior June 30th.
Item 1A.
RISK FACTORS
You
should consider carefully all of the risks described below, which we believe are the principal risks that we face and of which we are
currently aware, and all of the other information contained in this Annual Report. If any of the events or developments described below
occur, our business, financial condition or results of operations could be negatively affected.
Risks Relating to our Search for, Consummation
of, or Inability to Consummate,
a Business Combination and Post-Business Combination Risks
Our public stockholders may not be afforded
an opportunity to vote on our proposed business combination, unless such vote is required by law or Nasdaq, which means we may consummate
our initial business combination even though a majority of our public stockholders do not support such a combination.
We may not hold a stockholder
vote to approve our initial business combination unless the business combination would require stockholder approval under applicable state
law or the rules of NASDAQ or if we decide to hold a stockholder vote for business or other reasons. For example, NASDAQ rules currently
allow us to engage in a tender offer in lieu of a stockholder meeting but would still require us to obtain stockholder 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 structure a business combination that requires us to issue more than 20% of our outstanding shares, we would seek stockholder approval
of such business combination. However, except as required by law, the decision as to whether we will seek stockholder approval of a proposed
business combination will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the
transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. Accordingly, we may consummate
our initial business combination even if holders of a majority of the outstanding shares of our common stock do not approve of the business
combination we consummate.
If we seek stockholder approval of our initial
business combination, our sponsor, directors and officers have agreed to vote in favor of such initial business combination, regardless
of how our public stockholders vote.
Our sponsor, officers and
directors have agreed to vote their founder shares and any placement shares and public shares they hold in favor of our initial business
combination. If we seek stockholder approval of our initial business combination, it is more likely that the necessary stockholder approval
will be received than would be the case if holders of founder shares agreed to vote their founder shares, placement shares and public
shares in accordance with the majority of the votes cast by our public stockholders.
Your ability to affect the investment decision
regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash, unless
we seek stockholder 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 any target businesses. Since our board
of directors may consummate a business combination without seeking stockholder approval, public stockholders may not have the right to
vote on the business combination unless we seek such stockholder vote. Accordingly, your ability to affect the investment decision regarding
a potential business combination may be limited to exercising your redemption rights with respect to a proposed business combination.
The ability of our public stockholders to
redeem their shares for cash may make us unattractive to potential business combination targets, which may make it difficult for us to
enter into a business combination with a target.
We may enter into a 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.
Our amended and restated certificate of incorporation requires us to provide all of our stockholders with an opportunity to redeem all
of their shares in connection with the consummation of any initial business combination, although our sponsor, directors and officers
and each holder of placement units has agreed to waive his, her or its respective redemption rights with respect to founder shares and
placement shares, and in the case of the initial holders, public shares held by him, her or it in connection with the consummation of
our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets
to be less than the amount necessary to satisfy a closing condition as described above, or cause our Class A common stock to become a
“penny stock” as such term is defined in Rule 3a51-1 of the Exchange Act, we would not proceed with such redemption and the
related business combination. Prospective targets would be aware of these risks and, thus, may be reluctant to enter into a business combination
transaction with us.
The ability of our public stockholders to
exercise redemption rights with respect to a large number of our shares may not allow us to consummate the most desirable business combination
or optimize our capital structure.
At the time we enter into
an agreement for our initial business combination, we will not know how many stockholders may exercise their redemption rights, and therefore
will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If
our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or
requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such
requirements, or arrange for third party financing. In addition, if a larger number of shares is submitted for redemption than we initially
expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third
party financing. Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher
than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provisions of the Class B common
stock result in the issuance of Class A common stock on a greater than one-to-one basis upon conversion of the Class B common stock at
the time of our 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 stockholders to
exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination
would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.
If our initial business combination
agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount
of cash at closing, the probability that our initial business combination would be unsuccessful increases. If our initial business combination
is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in
need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock may trade at a discount
to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose
the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your stock in the open market.
The requirement that we complete a business
combination within the completion window may give potential target businesses leverage over us in negotiating a business combination and
may decrease our ability to conduct due diligence on potential business combination targets as we approach our dissolution deadline, which
could undermine our ability to consummate a business combination on terms that would produce value for our stockholders.
Any potential target business
with which we enter into negotiations concerning a business combination will be aware that we must consummate a business combination within
the completion window. Consequently, such target businesses may obtain leverage over us in negotiating a business combination, knowing
that if we do not complete a business combination with it, we may be unable to identify another target business and complete a business
combination with any target business. This risk will increase as we get closer to the end of the completion window. Depending upon when
we identify a potential target business, we may have only a limited time to conduct due diligence and may enter into a business combination
on terms that we might have rejected upon a more comprehensive investigation.
We may not be able to consummate a business
combination within the completion window, in which case we would cease all operations except for the purpose of winding up and we would
redeem our public shares and liquidate.
We must complete our initial
business combination within the completion window. We may not be able to find a suitable target business and consummate a business combination
within that time period. Our ability to complete our initial business combination may be negatively impacted by general market conditions,
volatility in the capital and debt markets and the other risks described herein. If we have not consummated a business combination within
the completion window, or earlier, at the discretion of our board pursuant to the expiration of a tender offer conducted in connection
with a failed business combination, 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 all public shares then outstanding at a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the trust account, including any amounts representing interest earned on the trust account,
less any interest released to us for the payment of taxes or dissolution expenses, divided by the number of then outstanding public shares,
which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further
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 stockholders and our board of directors, dissolve and liquidate, subject in each case to our
obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, our public
stockholders may only receive $10.15 per share and our warrants will expire worthless.
Our search for a business combination, and any target business
with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19)
outbreak and the status of debt and equity markets.
The COVID-19 outbreak
has resulted, and a significant outbreak of other infectious diseases could result, in a widespread health crisis that could adversely
affect the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business
combination could be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued
concerns relating to COVID-19 continue to restrict travel, limit the ability to have meetings with potential investors or the target
company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner.
The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain
and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain
COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue
for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we
ultimately consummate a business combination, may be materially adversely affected. In addition, our ability to consummate a transaction
may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events, including
as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable
to us or at all.
If we seek stockholder approval of our initial
business combination, our sponsor, directors, officers and their affiliates may elect to purchase shares of common stock from public stockholders,
in which case they may influence a vote in favor of a proposed business combination that you do not support and reduce the public “float”
of our Class A common stock or public warrants.
If we seek stockholder approval
of our business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer
rules, our sponsor, directors, officers or their respective affiliates may purchase shares or warrants in the open market or in privately
negotiated transactions either prior to or following the consummation of our initial business combination. Our sponsor, directors, officers
and their respective affiliates may also enter into transactions with stockholders and others to provide them with incentives to, among
other things, acquire shares of our common stock or vote their shares in favor of an initial business combination. Our directors, officers
or their affiliates will not make any such purchases when they are in possession of any material non-public information not disclosed
to the seller or during a restricted period under Regulation M under the Exchange Act or in a transaction which would violate Section
9(a)(2) or Rule 10(b)-5 under the Exchange Act. Such a purchase would include a contractual acknowledgement that such stockholder, although
still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights.
In the event that our sponsor, directors, officers or their affiliates purchase shares in privately negotiated transactions from public
stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their
prior elections to redeem their shares. In addition, if such purchases are made, the public “float” of our Class A common
stock or public warrants and the number of beneficial holders of our securities may be reduced, possibly making it difficult to obtain
or maintain the quotation, listing or trading of our securities on a national securities exchange.
If a stockholder fails to receive notice
of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for
tendering its shares, such shares may not be redeemed.
We will comply with the tender
offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our
compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may
not become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that
we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures
that must be complied with in order to validly tender or redeem public shares. For example, we may require our public stockholders seeking
to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender
their certificates to our transfer agent prior to the date set forth in the tender offer materials mailed to such holders, or up to two
business days prior to the vote on the proposal to approve the initial business combination in the event we distribute proxy materials,
or to deliver their shares to the transfer agent electronically. In the event that a stockholder fails to comply with these procedures,
its shares may not be redeemed. Please see “Business — Tendering stock certificates in connection with redemption rights.”
You will not have any rights to or interest
in funds from the trust account, except under limited circumstances. To liquidate your investment, therefore, you may be forced to sell
your shares or warrants, potentially at a loss.
Our public stockholders will
be entitled to receive funds from the trust account only upon the earlier to occur of: (i) the consummation of our initial business combination;
(ii) the redemption of our public shares if we are unable to consummate a business combination within the completion window, subject to
applicable law; (iii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended
and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we
do not complete our initial business combination within the completion window; or (iv) otherwise upon our liquidation or in the event
our board of directors resolves to liquidate the trust account and ceases to pursue the consummation of a business combination prior to
the expiration of the completion window (our board of directors may determine to liquidate the trust account prior to such date if it
determines, in its business judgment, that it is improbable within the remaining time that we will be able to identify an attractive business
combination or satisfy regulatory and other business and legal requirements to consummate a business combination). In addition, if our
plan to redeem our public shares if we are unable to consummate an initial business combination within the completion window is not consummated
for any reason, Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to
the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait beyond the end of
the completion window before they receive funds from our trust account. In no other circumstances will a public stockholder have any right
or interest of any kind in the trust account. Holders of warrants will not have any rights to the proceeds from our trust account with
respect to their warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially
at a loss.
You will not be entitled to protections
normally afforded to investors of many other blank check companies.
Since we intend to use the
net proceeds of the initial public offering and the private placement to complete an initial business combination with a target business
that has not been identified, we may be deemed to be a “blank check” company under the United States securities laws. However,
because we had net tangible assets in excess of $5.0 million upon the completion of the initial public offering and the private placement
and we filed a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated
by the SEC to protect investors in blank check companies, such as Rule 419 under the Securities Act. Accordingly, investors will not be
afforded the benefits or protections of those rules. Among other things, this means our units were immediately tradable and we have a
longer period of time to complete a business combination than would companies subject to Rule 419. Moreover, offerings subject to Rule
419 would prohibit the release of any interest earned on funds held in the trust account to us, except in connection with our consummation
of an initial business combination.
Because of our limited resources and the
significant competition for business combination opportunities, it may be more difficult for us to complete a business combination. If
we are unable to complete our initial business combination, you may receive only $10.15 per share from our redemption of your shares,
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 industry knowledge than we do and our financial resources will be relatively
limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially
acquire, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available
financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses.
Furthermore, because we are obligated to pay cash for the shares of Class A common stock which our public stockholders redeem in connection
with our initial business combination, target companies will be aware that this may reduce the resources available to us for our initial
business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination.
If we are unable to complete our initial business combination, our public stockholders may receive only $10.15 per share (based on the
trust account balance as of December 31, 2021) from our redemption of our shares, and our warrants will expire worthless.
If the net proceeds from the initial public
offering and the sale of the placement units not being held in the trust account are insufficient, it could limit the amount available
to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from
our sponsor or management team to fund our search for an initial business combination, to pay our taxes and to complete our initial business
combination. If we are unable to obtain these loans, we may be unable to complete our initial business combination.
Of the net proceeds of the
initial public offering and the private placement, $3,474,184 was available to us as of December 31, 2021 outside the trust account to
fund our working capital requirements. If we are required to seek additional capital, we would need to borrow funds from our sponsor,
management team or other third parties to operate, or we may be forced to liquidate. None of our sponsor, members of our management team
nor any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such advances would be repaid only
from funds held outside the trust account or from funds released to us upon completion of our initial business combination. Up to $2,000,000
of such loans may be convertible into units at a price of $10.00 per unit at the option of the lender at the time of the business combination.
The units would be identical to the placement units. We do not expect to seek loans from parties other than our sponsor or an affiliate
of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to
seek access to funds in our trust account. If we are unable to obtain these loans, we may be unable to complete 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 stockholders may only receive $10.15 per
share on our redemption of our public shares, and our warrants will expire worthless. In certain circumstances, our public stockholders
may receive less than $10.15 per share on the redemption of their shares. Please see “— If third parties bring claims
against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be
less than $10.15 per share” and other risk factors in this section.
Subsequent to consummation of our initial
business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have
a significant negative effect on our financial condition, results of operations and our stock 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 examination will uncover all material risks that
may be presented by a particular target business, or that factors outside of the target business and outside of our control will not later
arise. Even if our due diligence successfully identifies the principal risks, unexpected risks may arise and previously known risks may
materialize in a manner not consistent with our preliminary risk analysis. As a result, from time to time following our initial business
combination, we may be forced to write-down or write-off assets, restructure our operations, or incur impairment or other charges that
could result in our reporting losses. 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 securityholders who choose
to remain securityholders following the initial business combination could suffer a reduction in the value of their securities. Such securityholders
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 proxy solicitation or tender offer materials, as applicable, relating to the initial business
combination constituted an actionable material misstatement or omission.
If third parties bring claims against us,
the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than
$10.15 per share.
Placing funds in the trust
account may not protect those funds from third party claims against us. Although we seek to have all vendors, service providers (except
our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute
agreements with us waiving any right, title, interest or claim in or to any monies held in the trust account for the benefit of our public
stockholders, such parties may not execute such agreements or, even if they execute such agreements, they may not be prevented from bringing
claims against the trust account, including, but not limited to, claims for fraudulent inducement, breach of fiduciary responsibility
or other similar claims, as well as claims challenging the enforceability of the waiver. If any third party refuses to execute an agreement
waiving 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 without a waiver if management believes that such third party’s engagement would be significantly
more beneficial to us than any available alternative. If we do not obtain a waiver from a third party, we will obtain the written consent
of our sponsor before entering into an agreement with such third party.
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 management believes to be significantly superior to those of other consultants who would execute a waiver or in cases
where management is unable to find a service provider willing to execute a waiver and where our sponsor executes a written consent. 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 a business combination within the required time frame, or upon the exercise of a redemption
right in connection with a business combination, we will be required to provide for payment of claims of creditors that were not waived
that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public
stockholders could be less than the $10.15 per share initially held in the trust account due to claims of such creditors. Pursuant to
a written agreement, FTAC Zeus Sponsor, LLC has agreed that it will be liable to us if and to the extent any claims by a third party for
services rendered or products sold to us, or a prospective target business with which we discussed entering into a transaction agreement,
reduce the amounts in the trust account to below $10.15 per share except as to any claims by a third party who executed a waiver of rights
to seek access to the trust account and except as to any claims under our indemnity of the underwriter of the initial public offering
against certain liabilities, including liabilities under the Securities Act. Moreover, if an executed waiver is deemed to be unenforceable
against a third party, FTAC Zeus Sponsor, LLC will not be responsible to the extent of any liability for such third party claims. We have
not independently verified whether FTAC Zeus Sponsor, LLC has sufficient funds to satisfy its indemnity obligations, we have not asked
FTAC Zeus Sponsor, LLC to reserve for such indemnification obligations and we believe that its only assets are securities of our company.
Therefore, we cannot assure you that it would be able to satisfy these obligations.
Our directors may decide not to enforce
the indemnification obligations of FTAC Zeus Sponsor, LLC, resulting in a reduction in the amount of funds in the trust account available
for distribution to our public stockholders.
If proceeds in the trust account
are reduced below $10.15 per public share and FTAC Zeus Sponsor, LLC asserts that it is unable to satisfy its obligations or that it has
no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against
FTAC Zeus Sponsor, LLC to enforce its indemnification obligations. While we currently expect that our independent directors would take
legal action on our behalf against FTAC Zeus Sponsor, LLC to enforce its indemnification obligations to us, it is possible that our independent
directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance.
If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available
for distribution to our public stockholders may be reduced below $10.15 per share.
We may not have sufficient funds to satisfy
indemnification claims of our directors and executive officers.
We have agreed to indemnify
our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right,
title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any
reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside
of the trust account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and directors may
discourage stockholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions
also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action,
if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected
to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
If, after we distribute the proceeds in
the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us
that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as
having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive
damages.
If, after we distribute the
proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed
against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy
laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek
to recover all amounts received by our stockholders. In addition, by making distributions to public stockholders before making provision
for creditors, 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 for punitive damages.
If, before distributing the proceeds in
the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us
that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share
amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
If, before distributing the
proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed
against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included
in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any
bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our stockholders in connection with
our liquidation may be reduced.
Our stockholders may be held liable for
claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
Under the DGCL, stockholders
may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution.
The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event
we do not consummate our initial business combination within the completion window may be considered a liquidation distribution under
Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes
reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against
the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period
before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution
is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any
liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our
public shares as soon as reasonably possible following the end of the completion window if we do not consummate an initial business combination
and, therefore, we do not intend to comply with those procedures.
Because we will not be complying
with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for
our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our
dissolution. However, because we are a blank check company, rather than an operating company, and our operations are limited to searching
for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers or investment
bankers) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders
with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount
distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution.
We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could
potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders
may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public
stockholders upon the redemption of our public shares if we do not consummate our initial business combination within the completion window
is not considered a liquidation distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant
to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution,
instead of three years, as in the case of a liquidation distribution.
We may not hold an annual meeting of stockholders
until after we consummate a business combination.
We may not hold an annual
meeting of stockholders until after we consummate a business combination (unless required by NASDAQ), and thus may not be in compliance
with Section 211(b) of the DGCL, which requires that an annual meeting of stockholders be held for the purposes of electing directors
in accordance with a company’s bylaws unless directors are elected by written consent in lieu of such a meeting. Therefore, if our
stockholders want us to hold an annual meeting prior to our consummation of a business combination, they may attempt to force us to hold
one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL. Even if an annual meeting
was held for the purpose of electing directors prior to the consummation of a business combination, only holders of Class B common stock
would be entitled to notice of such meeting and to vote at such meeting.
Because we have not selected any specific
target businesses with which to pursue a business combination, you will be unable to ascertain the merits or risks of any particular target
business’ operations.
We will seek to consummate
a business combination with an operating company in the financial technology industry, but may also pursue acquisition opportunities in
other business sectors or geographic regions, except that we are not, under our amended and restated certificate of incorporation, permitted
to effectuate a business combination with another blank check company or similar company with nominal operations. Because we have not
yet identified any specific target business with respect to a business combination, you have no basis to evaluate the possible merits
or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects.
If we consummate our initial business combination, we may be affected by numerous risks inherent in the business operations of the entity
with which we combine. Because we will seek to acquire businesses that potentially need financial, operational, strategic or managerial
redirection, we may be affected by the risks inherent in the business and operations of a financially or operationally unstable entity.
Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you
that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence.
Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those
risks will adversely impact a target business. Accordingly, any securityholders who choose to remain securityholders following the initial
business combination could suffer a reduction in the value of their securities. We also cannot assure you that an investment in our securities
will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in an acquisition
target.
We may seek investment opportunities in
sectors outside of our industry focus (which may or may not be outside of our management’s area of expertise).
Although we currently intend
to consummate a business combination in the financial technology industry, we will consider a business combination outside this industry
if a business combination candidate is presented to us and we determine that such candidate offers an attractive investment opportunity
for our company. If we elect to pursue an investment outside of the financial technology industry, our management’s expertise in
that industry would not be directly applicable to its evaluation or operation, and the information contained herein regarding the financial
technology industry might not be relevant to an understanding of the business that we elect to acquire.
Although we have identified general criteria
and guidelines that we believe are important in evaluating prospective target businesses, we may enter into a 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
specific criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter
into a business combination will not have all of these positive attributes. If we consummate a business combination with a target that
does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet
all of our general criteria and guidelines. We also cannot assure you that an investment in our units will not ultimately prove to be
less favorable to investors than a direct investment, if an opportunity were available, in an initial business combination candidate.
In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a
greater number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition
with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval
of the transaction is required by law or NASDAQ, or we decide to obtain stockholder approval for business or other reasons, it may be
more difficult for us to obtain stockholder approval of our initial business combination if the target business does not meet our general
criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders may only receive $10.15
per share (based on the trust account balance as of December 31, 2021) on our redemption, and our warrants will expire worthless.
We may seek acquisition opportunities with
an early stage company, a financially unstable business or an entity lacking an established record of revenue or earnings, which could
subject us to volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel.
To the extent we complete
our initial business combination with an early stage company, a financially unstable business or an entity lacking an established record
of sales or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks
include investing in a business without a proven business model and with limited historical financial data, volatile revenues or earnings,
intense competition and difficulties in obtaining and retaining key personnel. Although our officers and directors 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 firm and, consequently, you may have no assurance from an independent source that the price we
are paying for the target in our initial business combination is fair to our stockholders from a financial point of view.
Unless we consummate our initial
business combination with an affiliated entity or our board cannot independently determine the fair market value of the target business,
we are not required to obtain an opinion from an independent investment banking firm that the price we are paying is fair to our stockholders
from a financial point of view. If we do not obtain an opinion, our stockholders will be relying on the judgment of our board of directors,
who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed
in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination.
If we hold a stockholder vote and must furnish
our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business
combination with some prospective target businesses.
If we hold a stockholder vote
to approve our initial business combination, 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. If we make
a tender offer for our public shares, we will include the same financial statement disclosure in our tender offer documents whether or
not they are required under the tender offer rules. These financial statements must be prepared in accordance with accounting principles
generally accepted in the United States of America, or GAAP, or international financial reporting standards as issued by the International
Accounting Standards Board, or IFRS, depending on the circumstances, and the historical financial statements must be audited in accordance
with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements
may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time
for us to disclose such statements in accordance with federal proxy rules and consummate our initial business combination within the completion
window.
The requirement that we maintain a minimum
net worth or retain a certain amount of cash could increase the probability that we will be unable to complete a proposed business combination
and that you would have to wait for liquidation in order to redeem your stock.
If, pursuant to the terms
of our proposed business combination, we are required to maintain a minimum net worth or retain a certain amount of cash in trust in order
to consummate the business combination, the ability of our public stockholders to cause us to redeem their shares in connection with such
proposed transaction will increase the risk that we will not meet that condition and, accordingly, that we will not be able to complete
the proposed transaction. If we do not complete a proposed business combination, you would not receive your pro rata portion of the trust
account until we liquidate or you are able to sell your stock in the open market. If you were to attempt to sell your stock in the open
market at that time, the price you receive could represent a discount to the pro rata amount in our 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.
Compliance obligations under the Sarbanes-Oxley
Act may make it more difficult for us to effectuate a business combination, require substantial financial and management resources, and
increase the time and costs of completing an acquisition.
The Sarbanes-Oxley Act requires
that we maintain a system of internal controls and, beginning with our annual report on Form 10-K for the fiscal year ending December
31, 2022, that we evaluate and report on such system of internal controls. In addition, once we are no longer an “emerging
growth company,” we must have our system of internal controls audited. 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 a 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 in order 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 will make it easier for us to consummate a business combination with which a substantial
number of our stockholders do not agree.
We may be able to consummate
a business combination even though a substantial number of our public stockholders do not agree with the transaction and have redeemed
their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with
our business combination pursuant to the tender offer rules, if our sponsor, officers, directors or their affiliates have entered into
privately negotiated agreements with public stockholders to acquire public shares. However, in no event will we redeem our public shares
in an amount that would cause our Class A common stock to become a “penny stock” as such term is defined in Rule 3a51-1 of
the Exchange Act, and the amount that we redeem may be further limited by the terms and conditions of our initial business combination.
In such case, we would not proceed with the redemption of our public shares and the related initial business combination, and instead
may search for an alternate business combination.
Unlike many blank check companies, our balance
sheet reflects negative stockholders’ equity.
The financial statements in
this annual report, after collaboration with our independent registered public accounting firm, reflect that all of the public shares
are subject to redemption, even though we are prohibited under our amended and restated certificate of incorporation from redeeming all
of the public shares since such redemption would result in our Class A common stock becoming a “penny stock” as such term
is defined in Rule 3a51-1 of the Exchange Act. As a result, all of the public shares are classified as temporary equity, presented outside
of the stockholders’ deficit section of our balance sheet. This accounting presentation may not be consistent with that of other
blank check companies and may make comparison of our financial statements to that of other blank check companies more difficult.
In order to effectuate an initial business
combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing instruments,
including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation,
our governing instruments or our warrant agreement in a manner that will make it easier for us to complete our initial business combination
that our stockholders may not support.
In order to effectuate an
initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified
governing instruments, including their warrant agreements. For example, blank check companies have amended the definition of business
combination, increased redemption thresholds and extended the time to consummate an initial business combination and, with respect to
their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending our
amended and restated certificate of incorporation will require the approval of holders of 65% of our common stock, and amending our warrant
agreement will require a vote of holders of at least 65% of the public warrants. In addition, our amended and restated certificate of
incorporation requires us to provide our public stockholders with the opportunity to redeem their public shares for cash if we propose
an amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem
100% of our public shares if we do not complete our initial business combination within the completion window or (B) with respect to any
other provision relating to stockholders’ rights or pre-initial business combination activity. To the extent any such amendments
would be deemed to fundamentally change the nature of our outstanding securities, we would register, or seek an exemption from registration
for, the affected securities. We cannot assure you that we will not seek to amend our charter or governing instruments or extend the time
to consummate an initial business combination in order to effectuate our initial business combination.
We may have a limited ability to assess
the management of a prospective target business and, as a result, may effect our initial business combination with a target business whose
management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability
of effecting a 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 expected. 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.
The provisions of our amended and restated
certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing
the release of funds from our trust account), 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 65% of our common stock, which is a lower amendment threshold than that of some other blank check companies.
It may be easier for us, therefore, to amend our amended and restated certificate of incorporation and the trust agreement to facilitate
the completion of an initial business combination that some of our stockholders may not support.
Our amended and restated certificate
of incorporation provides that any of its provisions related to pre-initial business combination activity (including the requirement to
deposit proceeds of the initial public offering and the private placement into the trust account and not release such amounts except in
specified circumstances, and to provide redemption rights to public stockholders as described herein and including 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 if approved by holders of 65% of our common stock entitled to vote thereon, 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 common
stock entitled to vote thereon. In all other instances, our amended and restated certificate of incorporation may be amended by holders
of a majority of our outstanding common stock entitled to vote thereon, subject to applicable provisions of the DGCL or applicable stock
exchange rules. We may not issue additional securities that can vote with common stockholders on matters related to our pre-initial business
combination activity, on any amendment to certain provisions of our amended and restated certificate of incorporation or on our initial
business combination. Our initial stockholders, who collectively beneficially own 28.2% of our common stock, will participate in any vote
to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner
they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which govern
our pre-initial business combination behavior more easily than some other blank check companies, and this may increase our ability to
complete an initial business combination with which you do not agree. Our stockholders may pursue remedies against us for any breach of
our amended and restated certificate of incorporation.
Our sponsor, officers and
directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate
of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial
business combination within the completion window, unless we provide our public stockholders with the opportunity to redeem their shares
of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then
on deposit in the trust account (net of taxes payable), divided by the number of then outstanding public shares. These agreements are
contained in a letter agreement that we have entered into with our sponsor, officers and directors. Our stockholders are not parties to,
or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor,
officers or directors for any breach of these agreements. As a result, in the event of a breach, our stockholders would need to pursue
a stockholder derivative action, subject to applicable law.
We may be unable to obtain additional financing
to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure
or abandon a particular business combination. If we are unable to complete our initial business combination, our public stockholders may
only receive $10.15 per share on our redemption.
Because of the size of our
initial business combination, the obligation to repurchase for cash a significant number of shares from stockholders who elect redemption
in connection with our initial business combination, or the terms of negotiated transactions to purchase shares in connection with our
initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. We may
be unable to obtain any necessary financing on acceptable terms, if at all. The current economic environment has made it especially difficult
for companies to obtain acquisition financing. To the extent that additional financing proves to be unavailable when needed to consummate
our initial business combination, we would be compelled to either restructure or abandon the transaction and seek an alternative target
business candidate. If we are unable to complete our initial business combination, our public stockholders may only receive $10.15 per
share (based on the trust account balance as of December 31, 2021) on our redemption. In addition, even if we do not need additional financing
to consummate our initial business combination, we may require such financing to fund the operations or growth of the target business.
The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business.
None of our officers, directors or stockholders is required to provide any financing to us after a business combination.
Our initial stockholders will control the
election of our board of directors until consummation of our initial business combination and will hold a substantial interest in us.
As a result, they will elect all of our directors prior to the consummation of our initial business combination and may exert a substantial
influence on actions requiring a stockholder vote, potentially in a manner that you do not support.
Our initial stockholders own
approximately 28.2% of our outstanding common stock. In addition, the founder shares, all of which are held by our initial stockholders,
entitle the holders to elect all of our directors prior to the consummation of our initial business combination. Holders of our public
shares have no right to vote on the election of directors during such time. These provisions of our amended and restated certificate of
incorporation may only be amended by a majority of at least 90% of our common stock voting at a stockholder meeting. As a result, you
will not have any influence over the election of directors prior to our initial business combination.
Neither our initial stockholders
nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities. Factors that would
be considered in making such additional purchases would include consideration of the current trading price of our Class A common stock.
In addition, as a result of their substantial ownership in our company, our initial stockholders may exert a substantial influence on
other actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated
certificate of incorporation and approval of major corporate transactions. If our initial stockholders purchase any additional shares
of common stock in the aftermarket or in privately negotiated transactions, this would increase their influence over these actions. Accordingly,
our initial stockholders will exert significant influence over actions requiring a stockholder vote.
Our sponsor controls a substantial interest
in us and thus may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.
Our sponsor owns 28.2% of
our issued and outstanding shares of common stock. Accordingly, they may exert a substantial influence on actions requiring a stockholder
vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation.
Holders of founder shares are not restricted from purchasing Class A common stock in the aftermarket or in privately negotiated transactions,
which would increase their control. The holders of founder shares do not 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 common
stock. In addition, our board of directors, whose members were elected by the initial holders, is divided into two classes with only one
class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of
stockholders) serving a two-year term. At each annual meeting, as a consequence of our “staggered” board of directors, only
a minority of the board of directors will be considered for election and our sponsor, because of its ownership position, will have considerable
influence regarding the outcome. Accordingly, you should anticipate that our sponsor will continue to exert control at least until the
consummation of our initial business combination.
Resources could be wasted in researching
acquisitions that are not consummated, which could materially adversely affect subsequent attempts to locate another target business and
consummate our initial business combination. If we are unable to complete our initial business combination, our public stockholders may
only receive $10.15 per share from our redemption of our shares and our warrants will expire worthless.
We anticipate that the investigation
of each specific target business and the negotiation, drafting, and execution of relevant agreements, disclosure documents, and other
instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we
decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely
would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to consummate our
initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us
of the related costs incurred, which could materially adversely affect subsequent attempts to locate and acquire or merge with another
business due to a reduction in the funds available for expenses relating to such efforts. If we are unable to complete our initial business
combination, our public stockholders may only receive $10.15 per share (based on the trust account balance as of December 31, 2021) from
our redemption of their shares and our warrants will expire worthless.
Our key personnel may negotiate employment
or consulting agreements with a target business in connection with our initial business combination. These agreements may provide for
them to receive compensation following our initial business combination and, as a result, may cause them to have conflicts of interest
in determining whether a particular business combination would be advantageous to us.
Our key personnel may decide
to remain with the company after the consummation of our initial business combination only if they are able to negotiate employment or
consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation
of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities
for services they would render to us after the consummation of our initial business combination. The personal and financial interests
of such individuals may influence their motivation in identifying and selecting a target business and cause them to have conflicts of
interest in determining whether a particular business combination would be advantageous to us. However, we believe the ability of such
individuals to remain with us after the consummation of our initial business combination will not be the determining factor in our decision
as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any of our key personnel
will remain with us after the consummation of our initial business combination. We cannot assure you that any of our key personnel will
remain in senior management or advisory positions with us. The determination as to whether any of our key personnel will remain with us
will be made at the time of our initial business combination.
We may attempt to consummate business combinations
with multiple prospective targets simultaneously, which may hinder our ability to consummate an initial business combination and give
rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to acquire
several businesses simultaneously that are owned by different sellers, we will need each seller 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 the 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, we may be unable to operate the combined business
successfully, and you could lose some or all of your investment in us.
We may attempt to consummate our initial
business combination with a private company about which little information is available, which may result in a business combination with
a company that is not as profitable as we expected, or 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 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 the information developed during our due diligence examination, which may be limited. As a result, we could acquire a company
that is not as profitable as we expected, or at all. Furthermore, the relative lack of information about a private company may hinder
our ability to properly assess the value of such a company which could result in our overpaying for that company.
If we effect our initial business
combination with a company located outside of the United States, we would be subject to a variety of additional risks that may adversely
affect us.
If we pursue a target company
with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens
in connection with investigating, agreeing to and completing such initial business combination, and if we effect such initial business
combination, we would be subject to a variety of additional risks that may negatively impact our operations.
If we pursue a target a company
with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks
associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial
business combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators
or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial business
combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an
international setting, including any of the following:
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costs and difficulties inherent in managing cross-border business operations; |
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rules and regulations regarding currency redemption; |
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complex corporate withholding taxes on individuals; |
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laws governing the manner in which future business combinations may be effected; |
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exchange listing and/or delisting requirements; |
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tariffs and trade barriers; |
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regulations related to customs and import/export matters; |
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local or regional economic policies and market conditions; |
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unexpected changes in regulatory requirements; |
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challenges in managing and staffing international operations; |
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tax issues, such as tax law changes and variations in tax laws as compared to the United States; |
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currency fluctuations and exchange controls; |
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challenges in collecting accounts receivable; |
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cultural and language differences; |
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employment regulations; |
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underdeveloped or unpredictable legal or regulatory systems; |
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protection of intellectual property; |
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social unrest, crime, strikes, riots and civil disturbances; |
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regime changes and political upheaval; |
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terrorist attacks 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, we may be unable to complete such initial business combination, or, if we
complete such initial business combination, our operations might suffer, either of which may adversely impact our business, financial
condition and results of operations.
We 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 anticipate structuring
our initial business combination to acquire 100% of the equity interests or assets of the target business or businesses. However, we may
structure our initial business combination to acquire less than 100% of the equity interests or assets of the target business, but only
if we (or any entity that is a successor to us in a business combination) acquire a majority of the outstanding voting securities or assets
of the target. Even if we own a majority interest in the target, our stockholders prior to the initial business combination may collectively
own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the business
combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares of Class A common
stock in exchange for all of the outstanding capital stock 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 shares of common stock, our stockholders immediately prior to such
transaction could own less than a majority of our outstanding shares of common stock subsequent to such transaction. In addition, other
minority stockholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s
stock than we initially acquired. Accordingly, this may make it more likely that we will not be able to maintain our control of the target
business.
We may issue notes or other debt securities,
or otherwise incur substantial debt, to complete a business combination, which may adversely affect our financial condition and the value
of our stockholders’ investment in us.
We may choose to incur substantial
debt in order to complete our initial business combination. 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 meet our debt service 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 covenants that require the maintenance of financial ratios or reserves without a waiver or renegotiation of that covenant; |
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our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand and the lender demands payment; |
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our inability to obtain necessary additional financing if any debt we incur contains covenants restricting our ability to obtain additional financing while the debt is outstanding; |
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prohibitions of, or limitations on, our ability to pay dividends on our common stock; |
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use of a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, as well as for 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 growth strategies and other purposes and other disadvantages compared to our competitors who have less debt. |
We do not have a policy with
respect to how much debt we may incur. To the extent that the amount of our debt increases, the impact of the effects listed above may
also increase.
We may complete a business combination with
only one business, which would result in our success being dependent solely on a single business which may have a limited number of products
or services. This lack of diversification may harm our operations and profitability.
We are not limited as to the
number of businesses we may acquire in our initial business combination. However, we may not be able to effectuate a business combination
with more than one target business because of various factors, including the limited amount of the net proceeds of the initial public
offering, the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with
the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined
basis. By consummating an initial business combination with only a single entity, our lack of diversification may subject us to numerous
economic, competitive and regulatory risks particular to the industry area in which the acquired business operates. 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:
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solely depend upon the performance of a single business, property or asset, or |
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depend 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.
The officers and directors of an acquisition
candidate may resign upon consummation of a business combination. The loss of an acquisition target’s key personnel could negatively
impact the operations and profitability of our post-combination business.
The role of an acquisition
candidate’s key personnel upon the consummation 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 us following our initial
business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place. The
loss of an acquisition target’s key personnel could negatively impact the operations and profitability of our post-combination business.
We may partner, submit a joint bid or enter
into a similar transaction with holders of founder shares or an affiliate in connection with our pursuit of, or in connection with, a
business combination.
We are not prohibited from
partnering, submitting a joint bid or entering into any similar transaction with holders of founder shares or their affiliates in our
pursuit of a business combination. Although we currently have no plans to do so, we could pursue such a transaction if we determined that
such affiliated entity met our criteria for a business combination and the transaction was approved by a majority of our disinterested
directors. Despite our agreement to obtain an opinion from an independent investment banking firm or an independent accounting firm regarding
the fairness to our stockholders from a financial point of view of a business combination with any holder of founder shares or its affiliates,
the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.
Additionally, were we successful in consummating such a transaction, conflicts could invariably arise from the interest of the holder
of founder shares or its affiliate in maximizing its returns, which may be at odds with the strategy of the post-business combination
company or not in the best interests of the public stockholders of the post-business combination company. Any or all of such conflicts
could materially reduce the value of your investment, whether before or after our initial business combination.
A failure to comply with privacy regulations
could adversely affect relations with customers and have a negative impact on business.
Depending upon the type of
business we acquire, in the course of providing services to our customers we may collect, process and retain sensitive and confidential
information on our customers and their clients. A failure of our systems due to security breaches, acts of vandalism, computer viruses,
misplaced or lost data, programming and/or human errors, or other causes could result in the misappropriation, loss or other unauthorized
disclosure of confidential customer information. Any such failure could result in damage to our reputation with our customers, expose
us to the risk of litigation and liability, disrupt our operations, and impair our ability to operate profitably.
We may not be able to protect our intellectual
property and we may be subject to infringement claims.
We expect to rely on a combination
of contractual rights and copyright, trademark, patent and trade secret laws to establish and protect any proprietary technology of a
target business. Although we intend to protect vigorously any intellectual property we acquire, third parties may infringe or misappropriate
our intellectual property or may develop competitive technology. Our competitors may independently develop similar technology, duplicate
our products or services or design around our intellectual property rights. We may have to litigate to enforce and protect our intellectual
property rights, trade secrets and know-how or to determine their scope, validity or enforceability, which is expensive, could cause a
diversion of resources and may not prove successful. The loss of intellectual property protection or the inability to secure or enforce
intellectual property protection could harm our business and ability to compete.
We also may be subject to
claims by third parties for infringement of another party’s proprietary rights, or for breach of copyright, trademark or license
usage rights. Any such claims and any resulting litigation could subject us to significant liability for damages. An adverse determination
in any litigation of this type could require us to design around a third party’s intellectual property, obtain a license for that
technology or license alternative technology from another party. None of these alternatives may be available to us at a price which would
allow us to operate profitably. In addition, litigation is time consuming and expensive to defend and could result in the diversion of
the time and attention of management and employees. Any claims from third parties may also result in limitations on our ability to use
the intellectual property subject to these claims.
Risks Relating to our Sponsor and Management
Team
We are dependent upon our officers and directors;
the loss of any one or more of them could adversely affect our ability to complete a business combination.
Our operations depend upon
the background, experience and contacts of our officers and directors. We believe that our success depends on the continued service of
our officers and directors, at least until we have consummated a business combination. We do not have an employment agreement with, or
key-man insurance on the life of, any of our directors or officers. In addition, our executive officers and directors are not required
to, and do not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our
operations and the search for a business combination and their other business commitments. We do not intend to have any full-time employees
prior to the consummation of our business combination. Each of our executive officers and directors is engaged in other business endeavors
and is not obligated to contribute any specific number of hours per week to our affairs. If our executive officers’ and directors’
other business commitments require them to devote substantial amounts of time in excess of their current commitment levels, it could limit
their ability to devote time to our affairs which make it more difficult for us to identify an acquisition target and consummate our business
combination.
Our success following our initial business
combination likely will depend upon the efforts of management of the target business. The loss of any of the key personnel of the target’s
management team could make it more difficult to operate the target profitably.
Although some of our key personnel
may remain with the target business in senior management or advisory positions following a business combination, we can offer no assurance
that any will do so. Moreover, as a result of the existing commitments of our key personnel, it is likely that we will retain some or
all of the management of the target business to conduct its operations. The departure of any key members of the target’s management
team could thus make it more difficult to operate the post-combination business profitably. Moreover, to the extent that we will rely
upon the target’s management team to operate the post-combination business, we will be subject to risks regarding their managerial
competence. While we intend to closely scrutinize the skills, abilities and qualifications of any individuals we retain after a business
combination, our ability to do so may be limited due to a lack of time resources or information. Accordingly, we cannot assure you that
our assessment of these individuals will prove to be correct and that they will have the skills, abilities and qualifications we expect.
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, including
another blank check company, and, accordingly, may have conflicts of interest in allocating their time and determining to which entity
a particular business opportunity should be presented.
Following the completion of
the initial public offering and until we consummate our initial business combination, we will engage in the business of identifying and
combining with one or more businesses. Our sponsor and officers and directors are, and may in the future become, affiliated with entities
(such as operating companies or investment vehicles) that are engaged in a similar business. . For example, our Chairman serves as Chairman
or Chief Executive Officer of INSU III, INSU IV, FinTech V, FinTech VI, FTAC Parnassus and FTAC Hera, each a blank check company formed
for the purpose of effecting its own initial business combination. In addition, our sponsor, officers and directors may participate in
the formation of, or become an officer or director of, any other blank check company prior to completion of our initial business combination.
As a result, our sponsor, officers or directors could have conflicts of interest in determining whether to present business combination
opportunities to us or to any other blank check company with which they may become involved.
Our officers and directors
also may become aware of business opportunities which may be appropriate for presentation to us and the other entities to which they owe
certain fiduciary or contractual duties. Accordingly, they may have conflicts of interest in determining to which entity a particular
business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented
to another entity prior to its presentation to us. Our amended and restated certificate of incorporation contains a waiver of the corporate
opportunity doctrine, which provides that we renounce our interest in any corporate opportunity offered to any director or officer unless
(i) such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company, (ii) such
opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue and (iii) the
director or officer is permitted to refer the opportunity to us without violating another legal obligation. The purpose for the surrender
of corporate opportunities is to allow officers, directors or other representatives with multiple business affiliations to continue to
serve as an officer of our company or on our board of directors. Our officers and directors may from time to time be presented with opportunities
that could benefit both another business affiliation and us. In the absence of the “corporate opportunity” waiver in our charter,
certain candidates would not be able to serve as an officer or director. We believe we substantially benefit from having representatives,
who bring significant, relevant and valuable experience to our management, and, as a result, the inclusion of the “corporate opportunity”
waiver in our amended and restated certificate of incorporation provides us with greater flexibility to attract and retain the officers
and directors that we feel are the best candidates.
However, the personal and financial
interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing
a business combination. The different timelines of competing business combinations could cause our directors and officers to prioritize
a different business combination over finding a suitable acquisition target for our business combination. Consequently, our directors’
and officers’ discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining
whether the terms, conditions and timing of a particular business combination are appropriate and in our stockholders’ best interest,
which could negatively impact the timing for a business combination.
For a discussion of our officers’
and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see the sections
of this prospectus entitled “Certain Relationships and Related Transactions, and Director Independence — Conflicts of
Interest.”
We may engage in a business combination
with one or more target businesses that have relationships with entities that may be affiliated with our executive officers, directors
or existing stockholders, which may raise potential conflicts of interest.
We may decide to acquire one
or more businesses affiliated with holders of founder shares, or our officers and directors. Our officers and directors also serve as
officers and board members of other entities. Such entities may compete with us for business combination opportunities. The holders of
founder shares and our officers and directors are not currently aware of any specific opportunities for us to consummate a 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 the targeted affiliated entity met our criteria for a business combination and
the transaction was approved by a majority of our disinterested directors. Despite our agreement to obtain an opinion from an independent
investment banking firm or an independent accounting firm regarding the fairness to our stockholders from a financial point of view of
a business combination with one or more businesses affiliated with our executive officers, directors or holders of founder shares, potential
conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public
stockholders as they would be absent any conflicts of interest. Although we have no formal policy in place for vetting potential conflicts
of interest, our board of directors will review any potential conflicts of interest on a case-by-case basis.
Since holders of founder shares and placement
units will lose some or all of their investment in us if we do not consummate a business combination, a conflict of interest may arise
in determining whether a particular acquisition target is appropriate for our initial business combination.
Our initial holders currently
own 14,009,583 founder shares, which will be worthless if we do not consummate our initial business combination. Our sponsor also purchased
an aggregate of 1,778,750 placement units for an aggregate purchase price of $17,787,500. There will be no redemption rights or liquidating
distributions from the trust account with respect to the founder shares, placement shares or placement warrants, which will expire worthless
if we do not consummate a business combination within the completion window. If we do not consummate a business combination, our sponsor
will realize a loss on the placement units it purchased. As a result, the personal and financial interests of certain of our officers
and directors, directly or as members of our sponsor, in consummating an initial business combination, along with their flexibility in
identifying and selecting a prospective acquisition candidate, may influence their motivation in identifying and selecting a target business
combination and completing an initial business combination that is not in the best interests of our stockholders. Consequently, the discretion
of our officers and directors, in identifying and selecting a suitable target business combination may result in a conflict of interest
when determining whether the terms, conditions and timing of a particular initial business combination are appropriate and in the best
interest of our public stockholders.
Risks Relating to our Securities
The securities in which we invest the funds
held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the
per-share redemption amount received by public stockholders may be less than $10.15 per share.
The proceeds held in the trust
account will 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 certificate of incorporation, our public stockholders 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 stockholders may be less than $10.15 per share.
If we are deemed to be an investment company
under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted,
which may make it difficult for us to complete our initial business combination.
If we are deemed to be an
investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and |
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restrictions on the issuance of securities; |
each of which may make it difficult for us to
complete our initial business combination.
In addition, we may have imposed
upon us burdensome requirements, including:
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registration as an investment company with the SEC; |
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adoption of a specific form of corporate structure; and |
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reporting, record keeping, voting, proxy and disclosure requirements and compliance with other rules and regulations that we are currently not subject to. |
In order not to be regulated
as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged
primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting,
owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S. government
securities and cash items) on an unconsolidated basis. Our business is to identify and complete an initial business combination and thereafter
to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view to resale
or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our
anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may
only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company
Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment
Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted
to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business
plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant
bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment
Company Act. Our securities are not intended for persons who are seeking a return on investments in government securities or investment
securities. The trust account is intended as a holding place for funds pending the earliest to occur of: (i) the completion of our primary
business objective, which is a business combination; (ii) the redemption of any public shares properly submitted in connection with a
stockholder vote to amend our amended and restated certificate of incorporation 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 within the completion window; and (iii) absent a business combination, our return
of the funds held in the trust account to our public stockholders as part of our redemption of the public shares. If we do not invest
the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the
Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted
funds and may hinder our ability to consummate our initial business combination. If we are unable to complete our initial business combination,
our public stockholders may receive only approximately $10.15 per share (based on the trust account balance as of December 31, 2021) on
the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive
less than $10.15 per share on the redemption of their shares. Please see “— If third parties bring claims against us, the
proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.15
per share” and other risk factors in this section.
If we seek stockholder approval of our initial
business combination and we do not conduct redemptions pursuant to the tender offer rules, a stockholder, or a “group” of
stockholders, who are deemed to hold an aggregate of more than 20.0% of our common stock may not redeem any shares they hold that exceed
such 20.0% amount.
If we seek stockholder approval
of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender
offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of
such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section
13 of the Exchange Act), will be restricted from seeking redemption rights with respect to shares in excess of 20.0% of the shares sold
in the initial public offering without our prior written consent. We refer to such shares in excess of 20.0% or more of the shares sold
in the initial public offering as “Excess Shares”. However, we would not be restricting our stockholders’ ability to
vote all of their shares (including Excess Shares) for or against our initial business combination. Your inability to redeem any Excess
Shares will reduce your influence over our ability to consummate a business combination and you could suffer a material loss on your investment
in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect
to the Excess Shares if we consummate our business combination. As a result, you would continue to hold that number of shares exceeding
20.0% and, in order to dispose of such shares, would be required to sell them in open market transactions, potentially at a loss.
NASDAQ may delist our securities from trading
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 stock price levels.
Generally, we must maintain an average global market capitalization and a minimum number of holders of our securities (generally 400 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 stock price would generally be required to be at least $4.00 per share and
we would be required to have a minimum of 400 round lot holders (with at least 50% of such round lot holders holding securities with a
market value of at least $2,500) of our securities. We cannot assure you that we will be able to meet those initial listing requirements
at that time.
If NASDAQ delists our securities
from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities
could be quoted on the Over-The-Counter Bulletin Board or the “pink sheets.” If this were to occur, there could be 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 common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
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a limited amount of, or no, 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 our units, Class A common stock and warrants are listed on NASDAQ, our units,
Class A common stock and warrants are covered securities. Although the states are preempted from regulating the sale of our securities,
the federal statute does allow the states to investigate companies if there is a suspicion of fraud and, if there is a finding of fraudulent
activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state,
other than the state of Idaho, having used these powers to prohibit or restrict the sale of securities issued by blank check companies,
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.
Purchases of Class A common stock in the
open market or in privately negotiated transactions by our sponsor, directors, officers or their affiliates may make it difficult for
us to continue to list our common stock on NASDAQ or another national securities exchange.
If our sponsor, directors,
officers or their affiliates purchase shares of our Class A common stock in the open market or in privately negotiated transactions, it
would reduce the public “float” of our Class A common stock and the number of beneficial holders of our common stock, which
may make it difficult to maintain the listing or trading of our common stock on a national securities exchange if we determine to apply
for such listing in connection with the business combination. If the number of our public holders falls below 400 or if the total number
of shares held by non-affiliates is less than 750,000, we will be non-compliant with NASDAQ’s continued listing rules and our common
stock could be de-listed. If our common stock were de-listed, we could face the material consequences set forth in the immediately preceding
risk factor.
We may issue additional common or preferred
shares to complete our initial business combination or under an employee incentive plan after consummation of our initial business combination,
which would dilute the interest of our stockholders and likely present other risks.
Our amended and restated certificate
of incorporation authorizes the issuance of up to 90,000,000 shares of Class A common stock, par value $0.0001 per share, and 20,000,000
shares of Class B common stock, par value $0.0001 per share and 1,000,000 shares of undesignated preferred stock, par value $0.0001 per
share. There are currently 26,956,875 and 5,990,417 authorized but unissued shares of Class A and Class B common stock, respectively,
available for issuance, which amount takes into account shares reserved for issuance upon exercise of outstanding warrants but not upon
the conversion of the Class B common stock. Shares of Class B common stock are automatically convertible into shares of our Class A common
stock at the time of our initial business combination, initially at a one-for-one ratio but subject to adjustment. There are no shares
of preferred stock currently issued and outstanding.
We may issue a substantial
number of additional shares of common stock, and may issue shares of preferred stock, in order to complete our initial business combination
or under an employee incentive plan after completion of our initial business combination (although our amended and restated certificate
of incorporation provides that we may not issue additional securities that can vote with common stockholders on matters related to our
pre-initial business combination activity, on any amendment to certain provisions of our amended and restated certificate of incorporation
or on our initial business combination or that would entitle holders thereof to receive funds from the trust account). We may also issue
shares of Class A common stock upon conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial
business combination as a result of the applicable anti-dilution provisions. However, our amended and restated certificate of incorporation
provides, among other things, that prior to our initial business combination, we may not issue additional shares of capital stock that
would entitle the holders thereof to (1) receive funds from the trust account or (2) vote on any initial business combination.
The issuance of additional
shares of common or preferred stock:
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may significantly dilute the equity interest of investors in the initial public offering; |
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may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock; |
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could cause a change in control if a substantial number of shares of common stock 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, common stock and/or warrants. |
If you exercise your public warrants on
a “cashless basis,” you will receive fewer shares of Class A common stock from such exercise than if you were to exercise
such warrants for cash.
There are circumstances in
which the exercise of the public warrants may be required or permitted to be made on a cashless basis. First, if a registration statement
covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the
closing of our initial business combination, warrantholders may, until such time as there is an effective registration statement, exercise
warrants on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another exemption. Second, if our Class A common
stock is at any time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of
a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants
who exercise their warrants to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act and, in the event we
so elect, we will not be required to file or maintain in effect a registration statement, and in the event we do not so elect, 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. Third,
if we call the public warrants for redemption, our management will have the option to require all holders that wish to exercise warrants
to do so on a cashless basis. In the event of an exercise on a cashless basis, a holder would pay the warrant exercise price by surrendering
the warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number
of shares of Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and
the “fair market value” (as defined in the next sentence) by (y) the fair market value. The “fair market value”
is the average reported last sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the
date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants,
as applicable. As a result, you would receive fewer shares of Class A common stock from such exercise than if you were to exercise such
warrants for cash.
The grant of registration rights to our
initial stockholders and purchasers of placement units may make it more difficult to complete our initial business combination, and the
future exercise of such rights may reduce the market price of our Class A common stock.
Pursuant to an agreement entered
into concurrently with the issuance and sale of the securities in the initial public offering, our initial stockholders and their permitted
transferees and purchasers of placement units can demand that we register the founder shares, placement shares, placement warrants and
the shares of Class A common stock issuable upon exercise of the placement warrants. This would include the 14,009,583 founder shares,
1,778,750 placement shares and 889,375 placement warrants. These registration rights will be exercisable at any time commencing upon the
date that such shares are released from transfer restrictions. We will also grant registration rights to our sponsor or one of its affiliates
in connection with the issuance of warrants included in the units that may be issued upon conversion of working capital loans. 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 reduce the market price of our Class A common stock. In addition, the existence of the registration rights may
make our initial business combination more costly or difficult to conclude because the stockholders of the target business may increase
the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price
of our Class A common stock that is expected when the securities owned by our initial stockholders or their permitted transferees are
registered.
We may amend the terms of the warrants in
a manner that may be adverse to holders with the approval by the holders of at least 50% of the then outstanding public warrants.
Our warrants were issued in
registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant
agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any
defective provision, but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any change
that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants
in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment. Although
our ability to amend the terms of the public warrants with the consent of at least 50% of the then outstanding public warrants is unlimited,
examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants
into cash or stock, shorten the exercise period or decrease the number of shares of our Class A common stock purchasable upon exercise
of a warrant.
We may redeem your unexpired warrants prior
to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem
outstanding warrants at any time after they become exercisable and prior to their expiration, at $0.01 per warrant, provided that the
last reported sales price (or the closing bid price of our Class A common stock in the event the shares of our Class A common stock are
not traded on any specific trading day) of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits,
stock dividends, reorganizations 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 proper notice of such redemption, provided that on the date we give notice of redemption and during the entire
period thereafter until the time we redeem the warrants, we have an effective registration statement under the Securities Act covering
the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating to them is available. If and
when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying
securities for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the
holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants could force you: (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.
Our
warrants and founder shares may have an adverse effect on the market price of our Class A common stock and make it more difficult to
effectuate a business combination.
In
the initial public offering, we issued warrants to purchase 20,125,000 shares of our Class A common stock as part of the public units.
In addition, on the closing date of the initial public offering, we sold 1,778,750 placement units to our sponsor, with each unit consisting
of one placement share and one-half of one placement warrant, each whole warrant exercisable to purchase one share of Class A common
stock. Prior to the initial public offering, we issued an aggregate of 14,009,583 founder shares in a private placement. The founder
shares are convertible into shares of Class A common stock on a one-for-one basis, subject to adjustment. In addition, if our sponsor
or one of its affiliates makes any working capital loans, such loans may be converted into units, at the price of $10.00 per unit at
the option of the lender. Such units would be identical to the placement units.
To
the extent we issue shares of Class A common stock to effect a business combination, the potential for the issuance of a substantial
number of additional shares of Class A common stock upon exercise of these warrants and 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 shares of our Class A
common stock and reduce the value of the shares of Class A common stock issued to complete the business combination. 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
placement warrants are identical to the warrants sold as part of the units in the initial public offering except that, so long as they
are held by the initial purchasers or their permitted transferees, (i) they may not (including the Class A common stock issuable upon
exercise of these warrants), subject to certain limited exceptions, be transferred, assigned or sold until 30 days after the completion
of our initial business combination, and (ii) they will be entitled to registration rights.
Because
each unit contains one-half of one warrant and only a whole warrant may be exercised, the units may be worth less than units of other
blank check companies.
Each
unit contains one-half of one warrant. Because, pursuant to the warrant agreement, the warrants may only be exercised for a whole number
of shares, only a whole warrant may be exercised at any given time. This is different from other blank check companies similar to ours
whose units include one share of common stock and one warrant to purchase one whole share. We established the components of the units
in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will
be exercisable in the aggregate for one-half of the number of shares compared to units that each contain a warrant to purchase one whole
share, thus making us, we believe, a more attractive business combination partner for target businesses. Nevertheless, this unit structure
may cause our units to be worth less than if they included a warrant to purchase one whole share.
A
provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.
Unlike
many blank check companies, if (x) we issue additional shares of Class A common stock or equity-linked securities for
capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price
of less than $9.20 per share (with such issue price or effective issue price to be determined in good faith by us and in the case of
any such issuance to our sponsor or its affiliates, without taking into account any founder shares held by our initial stockholders or
such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds
from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our
initial business combination on the date of the completion of our initial business combination (net of redemptions), and (z) the
volume-weighted average trading price of our shares of Class A common stock during the 20 trading day period starting on the
trading day prior to the day on which we complete our initial business combination (such price, the “Market Value”) is below
$9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market
Value and the Newly Issued Price, and the $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.
Provisions
in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors
might be willing to pay in the future for our common stock and could entrench management.
Our
amended and restated certificate of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders
may consider to be in their best interests. These provisions include a staggered board of directors and the ability of the board of directors
to designate the terms of and issue new series of preferred shares. We are also subject to anti-takeover provisions under Delaware law,
which could delay or prevent a change of control. Together these provisions may make the removal of management more difficult and may
discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
Our
amended and restated certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought in
our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and other similar actions
may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the
suit will be deemed to have consented to service of process on such stockholder’s counsel, which may have the effect of discouraging
lawsuits against our directors, officers, other employees or stockholders.
Our
amended and restated certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought in
our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and other similar actions
may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the
suit will be deemed to have consented to service of process on such stockholder’s counsel except any action (A) as to which the
Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court
of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following
such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or (C) for
which the Court of Chancery does not have subject matter jurisdiction. Any person or entity purchasing or otherwise acquiring any interest
in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate
of incorporation.
This
choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes
with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims.
Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation
to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions,
which could harm our business, operating results and financial condition.
Our
amended and restated certificate of incorporation provides that the exclusive forum provision will be applicable to the fullest extent
permitted by applicable law, subject to certain exceptions. Section 27 of the Exchange Act creates exclusive federal jurisdiction over
all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result,
the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other
claim for which the federal courts have exclusive jurisdiction. In addition, our amended and restated certificate of incorporation provides
that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America
shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action
arising under the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder. We note, however, that there
is uncertainty as to whether a court would enforce this provision and that investors cannot waive compliance with the federal securities
laws and the rules and regulations thereunder.
General
Risk Factors
We
are an early stage company with no operating history and no revenue and, accordingly, you have no basis on which to evaluate our ability
to achieve our business objective.
We
are an early stage company with no operating history and no revenue. We will not commence operations until we consummate our initial
business combination. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business
objective of acquiring one or more operating businesses in the financial technology industry. We may be unable to complete a business
combination. If we fail to complete a business combination, we will never generate any operating revenues.
Changes
in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results
of operations.
We
are subject to laws and regulations enacted by national, regional and local governments, including in particular, reporting and other
requirements under the Exchange Act. 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 result in fines, injunctive relief or similar remedies which could be costly to
us or limit our ability to complete an initial business combination or operate the post-combination company successfully.
Past
performance by our management team may not be indicative of future performance of an investment in the Company.
Past
performance by our management team is not a guarantee either (i) of success with respect to any business combination we may consummate
or (ii) that we will be able to locate a suitable candidate for our initial business combination. You should not rely on the historical
record of our management team’s performance as indicative of our future performance of an investment in the company or the returns
the company will, or is likely to, generate going forward.
We
are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of
certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make
our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We
are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage
of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth
companies including, but not limited to, not being required to comply with the auditor internal controls attestation requirements of
Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy
statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval
of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they
may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status
earlier, including if the market value of our Class A common stock held by non-affiliates equals or exceeds $700 million as of any June
30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict
whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities
less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise
would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended
transition period which means that when a standard is issued or revised and it has different application dates for public or private
companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised
standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company
nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential
differences in accounting standards used.
Additionally,
we are a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies
may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial
statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our
common stock held by non-affiliates equals or exceeds $250 million as of the prior June 30th, or (2) our annual revenues
equaled or exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates equals
or exceeds $700 million as of the prior June 30th. To the extent we take advantage of such reduced disclosure obligations, it may
also make comparison of our financial statements with other public companies difficult or impossible.
The
requirements of being a public company may strain our resources and divert management’s attention.
As
a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (which we refer to
as the Sarbanes-Oxley Act), the Dodd-Frank Wall Street Reform and Consumer Protection Act (which we refer to as the Dodd-Frank Act),
the listing requirements of NASDAQ and other applicable securities rules and regulations. Compliance with these rules and regulations
will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand
on our systems and resources, particularly after we are no longer an “emerging growth company.” The Sarbanes-Oxley Act requires,
among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order
to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this
standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from
other business concerns, which could adversely affect our business and operating results. We may need to hire more employees in the future
or engage outside consultants to comply with these requirements, which will increase our costs and expenses.
In
addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for
public companies, increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations
and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application
in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty
regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to
invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative
expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our
efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due
to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business
may be adversely affected.
However,
for as long as we remain an “emerging growth company” as defined in the JOBS Act, we may take advantage of certain exemptions
from various reporting requirements that are applicable to “emerging growth companies” including, but not limited to, not
being required to comply with the auditor attestation requirements of the Sarbanes-Oxley Act, reduced disclosure obligations regarding
executive compensation in our periodic reports and proxy statements, and exemptions from the requirement of holding a nonbinding advisory
vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We may take advantage
of these reporting exemptions until we are no longer an “emerging growth company.”
We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of
the completion of the initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which
we are deemed to be a large accelerated filer, which means the market value of our shares of common stock that are held by non-affiliates
equals or exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible
debt during the prior three year period.
We
may face risks related to financial technology businesses.
Business
combinations with financial technology businesses may involve special considerations and risks. If we complete our initial business combination
with a financial technology business, we will be subject to the following risks, any of which could be detrimental to us and the business
we acquire:
| ● | If
the company or business we acquire provides products or services which relate to the facilitation of financial transactions, such as
funds or securities settlement system, and such product or service fails or is compromised, we may be subject to claims from both the
firms to whom we provide our products and services and the clients they serve; |
| ● | If
we are unable to keep pace with evolving technology and changes in the financial services industry, our revenues and future prospects
may decline; |
| ● | Our
ability to provide financial technology products and services to customers may be reduced or eliminated by regulatory changes; |
| ● | Any
business or company we acquire could be vulnerable to cyberattack or theft of individual identities or personal data; |
| ● | Difficulties
with any products or services we provide could damage our reputation and business; |
| ● | A
failure to comply with privacy regulations could adversely affect relations with customers and have a negative impact on business; and |
| ● | We
may not be able to protect our intellectual property and we may be subject to infringement claims. |
Any
of the foregoing could have 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 financial technology industry. 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.