UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the
Securities Exchange Act of 1934
Filed
by the Registrant ☒
Filed
by a Party other than the Registrant ☐
Check the appropriate box:
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Preliminary Proxy
Statement |
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Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to Section 240.14a-12 |
Global System Dynamics, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
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of Filing Fee (Check the appropriate box): |
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No
fee required. |
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Fee
paid previously with preliminary materials |
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Fee
computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
GLOBAL SYSTEM DYNAMICS, INC.
815 Walker Street
Suite 1155
Houston,
TX 77002
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 31, 2023
TO THE STOCKHOLDERS OF GLOBAL SYSTEM DYNAMICS, INC.:
You are cordially invited to attend the special meeting,
which we refer to as the “Special Meeting,” of stockholders of Global System Dynamics, Inc., which we refer to as “we,”
“us,” “our,” “GSD” or the “Company,” to be held at 10 a.m. Eastern Time on July 31, 2023.
The Special Meeting will be a completely virtual
meeting of stockholders, which will be conducted via live webcast. You will be able to attend the Special Meeting online, vote and submit
your questions during the Special Meeting by visiting https://www.cstproxy.com/gsd/2023. If you plan to attend the virtual online Special
Meeting, you will need your 12 digit control number to vote electronically at the Special Meeting. We are pleased to utilize the virtual
stockholder meeting technology to provide ready access and cost savings for our stockholders and the Company. The virtual meeting format
allows attendance from any location in the world.
Even if you are planning on attending the Special
Meeting online, please promptly submit your proxy vote by telephone, or, if you received a printed form of proxy in the mail, by completing,
dating, signing and returning the enclosed proxy, so your shares will be represented at the Special Meeting. Instructions on voting your
shares are on the proxy materials you received for the Special Meeting. Even if you plan to attend the Special Meeting online, it is
strongly recommended you complete and return your proxy card before the Special Meeting date, to ensure that your shares will be represented
at the Special Meeting if you are unable to attend.
The accompanying proxy statement, which we refer
to as the “Proxy Statement,” is dated July 19, 2023, and is first being mailed to stockholders of the Company on or about
July 19, 2023. The sole purpose of the Special Meeting is to consider and vote upon the following proposals:
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a proposal
to amend the Company’s amended and restated certificate of incorporation, which we refer to as the “charter,” in
the form set forth in Annex A to the accompanying Proxy Statement, which we refer to as the “Extension Amendment”
and such proposal the “Extension Amendment Proposal,” to extend, upon the request of DarkPulse, Inc., a Delaware corporation
(the “Sponsor”), and approval by the Company’s board of directors, the period of time for the Company to
(i) consummate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination
involving the Company and one or more businesses, which we refer to as a “business combination,” (ii) cease its operations
if it fails to complete such business combination, and (iii) redeem or repurchase 100% of the Company’s Class A common stock
included as part of the units sold in the Company’s initial public offering that was consummated on August 9, 2021, which we
refer to as the “IPO,” up to six times, each by an additional month, for an aggregate of six additional months (i.e.
from August 9, 2023 (the “Termination Date”) up to February 9, 2024) or such earlier date as determined by the
board of directors, which we refer to as the “Extension,” and such later date, the “Extended Date”; and |
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a proposal
to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote
of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Extension Amendment
Proposal, which we refer to as the “Adjournment Proposal.” The Adjournment Proposal will only be presented at the Special
Meeting if there are not sufficient votes to approve the Extension Amendment Proposal. |
Each of the Extension Amendment Proposal and the
Adjournment Proposal is more fully described in the accompanying Proxy Statement.
The sole purpose of the Extension Amendment Proposal
and, if necessary, the Adjournment Proposal, is to allow us additional time to complete a Business Combination (the “Business
Combination”) contemplated by that certain Business Combination Agreement, dated as of December 14, 2022 (as it may be amended
or supplemented from time to time, the “Merger Agreement”) by, between, and among us, Zilla Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of GSD, and DarkPulse, Inc., a Delaware corporation (“DPLS”), which is also
the Sponsor in the capacity as the representative of the stockholders of GSD. For more information about the Business Combination, see
our Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on December 15,
2022.
While we are using our best efforts to complete the
Business Combination as soon as practicable, our board of directors (the “Board”) believes that there will not be
sufficient time before the Termination Date to complete the Business Combination. Accordingly, the Board believes that in order to be
able to consummate the Business Combination, we will need to obtain the Extension. Without the Extension, the Board believes that there
is significant risk that we might not, despite our best efforts, be able to complete the Business Combination on or before the Termination
Date. If that were to occur, we would be precluded from completing the Business Combination and would be forced to liquidate even if
our stockholders are otherwise in favor of consummating the Business Combination.
Therefore, the Board has determined that it is in
the best interests of our stockholders to extend the date by which the Company has to consummate a business combination to the Extended
Date in order that our stockholders have the opportunity to participate in our future investment.
If the Extension is approved and implemented, subject
to satisfaction of the conditions to closing in the Merger Agreement (including, without limitation, receipt of stockholder approval
of the Business Combination), we intend to complete the Business Combination as soon as possible and in any event on or before the Extended
Date.
In connection with the Extension Amendment Proposal,
public stockholders may elect to redeem their public shares for a per-share price, payable in cash, equal to the aggregate amount then
on deposit in the trust account (the “Trust Account”), including interest (which interest shall be net of taxes payable),
divided by the number of then outstanding shares of Class A common stock issued in our IPO, which shares we refer to as the “public
shares,” and which election we refer to as the “Election,” regardless of whether such public stockholders vote on the
Extension Amendment Proposal. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be
less than $5,000,001 and, accordingly, we will not proceed with the Extension Amendment if the number of public shares subject to the
Election causes us to have less than $5,000,001 of net tangible assets following approval of the Extension Amendment Proposal.
If the Extension Amendment Proposal is approved by
the requisite vote of stockholders, the remaining holders of public shares will retain their right to redeem their public shares when
the Business Combination is submitted to the stockholders, subject to any limitations set forth in our charter as amended by the Extension
Amendment. In addition, public stockholders who do not make the Election would be entitled to have their public shares redeemed for cash
if the Company has not completed a Business Combination by the Extended Date. Even if the Extension is approved, we can provide no assurances
that the Business Combination will be consummated prior to the Extended Date.
To exercise your redemption rights, you must
demand that the Company redeem your public shares for a pro rata portion of the funds held in the Trust Account, and tender your shares
to the Company’s transfer agent at least two business days prior to the Special Meeting (or July 27, 2023). You may tender
your shares by either delivering your share certificate to the transfer agent or by delivering your shares electronically using the Depository
Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system. If you hold your shares in street name, you will need to instruct
your bank, broker or other nominee to withdraw the shares from your account in order to exercise your redemption rights.
Based upon the current amount in the Trust Account
and the outstanding public shares as of the Record Date, the Company anticipates that the per-share price at which public shares will
be redeemed from cash held in the Trust Account will be approximately $14,675,427 at the time of the Special Meeting. The closing price
of the Company’s Class A common stock on July 5, 2023 was $10.73 per share. The Company cannot assure stockholders that they will
be able to sell their shares of the Company’s Class A common stock in the open market, even if the market price per share is higher
than the redemption price stated above, as there may not be sufficient liquidity in its securities when such stockholders wish to sell
their shares.
The Adjournment Proposal, if adopted, will allow
the Board to adjourn the Special Meeting to a later date or dates to permit further solicitation of proxies. The Adjournment Proposal
will only be presented to our stockholders in the event that there are insufficient votes for, or otherwise in connection with, the approval
of the Extension Amendment Proposal.
If the Extension Amendment Proposal is not approved,
our Sponsor determines not to fund any additional extension as permitted by our charter and we do not consummate the Business Combination
by August 9, 2023, in accordance with our charter, 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 subject to lawfully available funds therefor, redeem 100% of the
shares of Class A common stock in consideration of a per-share price, payable in cash, equal to the quotient obtained by dividing (A)
the aggregate amount then on deposit in the Trust Account, including interest (net of taxes payable, less up to $100,000 of such net
interest to pay dissolution expenses), by (B) the total number of then outstanding shares of Class A common stock, which redemption will
completely extinguish rights of public stockholders (including the right to receive further liquidating distributions, if any), subject
to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders
and the Board in accordance with applicable law, dissolve and liquidate, subject in each case to the Company’s obligations under
the Delaware General Corporation Law, which we refer to as the “DGCL,” to provide for claims of creditors and other requirements
of applicable law. There will be no distribution from the Trust Account with respect to our warrants, which will expire worthless in
the event of our winding up.
The Sponsor owns 2,623,120 shares of Class B Common
Stock (the “Class B Common Stock”) and 4,298,496 Private Placement Warrants, each of which is exercisable to purchase
one share of Class A common stock that were purchased from the previous sponsor of the Company on October 12, 2022.
The Sponsor is also the target for acquisition in
the Merger Agreement. We are not prohibited from pursuing a business combination with a business that is our Sponsor, or affiliated with
our Sponsor, officers or directors. The Sponsor, as the target, however, may have an interest in completing the business combination
as its shareholders stand to benefit from the merger consideration under the Merger Agreement, as well seeing that the equity it owns
in our company, and the deposits made to the Trust Account, including recently to extend the date of the business combination to February
9, 2023, are put to use in the business combination, and not liquidated in a winding up of our company. In addition, our Principal Executive
Officer and Chief Financial Officer, before becoming an officer for our company, worked for the Sponsor as a financial consultant and
was paid a monthly salary. In light of these concerns, we have obtained an opinion from an independent investment banking firm that is
a member of the Financial Industry Regulatory Authority, or FINRA, that our business combination is fair to the unaffiliated stockholders
of our company from a financial point of view. In the event of a liquidation, our Sponsor, and officers and directors will not receive
any monies held in the Trust Account as a result of their ownership of the Class B Common Stock, the Private Placement Warrants, from
any unsecured convertible loans for working capital or the promissory note issued in connection with the extension of the Business Combination
to February 9, 2024.
Subject to the foregoing, the affirmative vote of
at least 65% of the Company’s outstanding shares of common stock, including the Class A Common Stock and the Class B Common Stock,
will be required to approve the Extension Amendment Proposal. Stockholder approval of the Extension Amendment is required for the implementation
of our Board’s plan to extend the date by which we must consummate our initial business combination. Notwithstanding stockholder
approval of the Extension Amendment Proposal, our Board will retain the right to abandon and not implement the Extension Amendment at
any time without any further action by our stockholders.
Approval of the Adjournment Proposal requires the
affirmative vote of the majority of the votes cast by stockholders represented in person or by proxy at the Special Meeting.
Our Board has fixed the close of business on July
5, 2023 as the date for determining the Company stockholders entitled to receive notice of and vote at the Special Meeting and any adjournment
thereof. Only holders of record of the Company’s common stock on that date are entitled to have their votes counted at the Special
Meeting or any adjournment thereof.
We reserve the right at any time to cancel the Special
Meeting and not to submit to our stockholders the Extension Amendment Proposal and implement the Extension Amendment. In the event the
Special Meeting is cancelled, and a Business Combination with Sponsor and or another target is not consummated by August 9, 2023, we
will dissolve and liquidate in accordance with the charter.
You are not being asked to vote on the Business
Combination at this time. If the Extension is implemented and you do not elect to redeem your public shares, provided that you are a
stockholder on the record date for a meeting to consider the Business Combination, you will retain the right to vote on the Business
Combination when it is submitted to stockholders and the right to redeem your public shares for cash in the event the Business Combination
is approved and completed or we have not consummated a business combination with any target by the Extended Date.
After careful consideration of all relevant factors,
the Board has determined that the Extension Amendment Proposal and, if presented, the Adjournment Proposal are advisable and recommends
that you vote or give instruction to vote “FOR” such proposals.
Under Delaware law and the Company’s bylaws,
no other business may be transacted at the Special Meeting.
Enclosed is the Proxy Statement containing detailed
information concerning the Extension Amendment Proposal, the Adjournment Proposal and the Special Meeting. Whether or not you plan to
attend the Special Meeting, we urge you to read this material carefully and vote your shares.
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By Order of
the Board of Directors |
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/s/
Rick Iler |
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Rick Iler |
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Principal Executive
Officer and Chief Financial Officer |
Your vote is important. If you are a stockholder
of record, please sign, date and return your proxy card as soon as possible to make sure that your shares are represented at the Special
Meeting. If you are a stockholder of record, you may also cast your vote online at the Special Meeting. If your shares are held in an
account at a brokerage firm or bank, you must instruct your broker or bank how to vote your shares, or you may cast your vote online
at the Special Meeting by obtaining a proxy from your brokerage firm or bank. Your failure to vote or instruct your broker or bank how
to vote will have the same effect as voting “AGAINST” the Extension Amendment Proposal, and an abstention will have the same
effect as voting “AGAINST” the Extension Amendment Proposal.
Important Notice Regarding the Availability of
Proxy Materials for the Special Meeting of Stockholders to be held on July 31, 2023: This notice of meeting and the accompanying
Proxy Statement are available at https://www.cstproxy.com/gsd/2023.
GLOBAL SYSTEM DYNAMICS, INC.
815 Walker Street
Suite 1155
Houston,
TX 77002
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 31, 2023
PROXY STATEMENT
The special meeting, which we refer to as the “Special
Meeting,” of stockholders of Global System Dynamics, Inc., which we refer to as the “we,” “us,” “our,”
“GSD” or the “Company,” will be held at 10 a.m. Eastern Time on July 31, 2023 as a virtual meeting. You will
be able to attend, vote your shares, and submit questions during the Special Meeting via a live webcast available at https://www.cstproxy.com/gsd/2023.
If you plan to attend the virtual online Special Meeting, you will need your 12 digit control number to vote electronically at the Special
Meeting. The Special Meeting will be held for the sole purpose of considering and voting upon the following proposals:
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a proposal
to amend the Company’s amended and restated certificate of incorporation, which we refer to as the “charter,” in
the form set forth in Annex A to the accompanying Proxy Statement, which we refer to as the “Extension Amendment”
and such proposal the “Extension Amendment Proposal,” to extend, upon the request of DarkPulse, Inc., a Delaware corporation
(the “Sponsor”), and approval by the Company’s board of directors, the period of time for the Company to
(i) consummate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination
involving the Company and one or more businesses, which we refer to as a “business combination,” (ii) cease its operations
if it fails to complete such business combination, and (iii) redeem or repurchase 100% of the Company’s Class A common stock
included as part of the units sold in the Company’s initial public offering that was consummated on August 9, 2021, which we
refer to as the “IPO,” up to six times, each by an additional month, for an aggregate of six additional months (i.e.
from August 9, 2023 (the “Termination Date”) up to February 9, 2024) or such earlier date as determined by the
board of directors, which we refer to as the “Extension,” and such later date, the “Extended Date”; and |
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a proposal
to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote
of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Extension Amendment
Proposal, which we refer to as the “Adjournment Proposal.” The Adjournment Proposal will only be presented at the Special
Meeting if there are not sufficient votes to approve the Extension Amendment Proposal. |
The sole purpose of the Extension Amendment Proposal
and, if necessary, the Adjournment Proposal, is to allow us additional time to complete the proposed transactions (the “Business
Combination”) contemplated by that certain Business Combination Agreement, dated as of December 14, 2022 (as it may be amended
or supplemented from time to time, the “Merger Agreement”) by, between, and among us, Zilla Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of GSD, and DarkPulse, Inc., a Delaware corporation (“DPLS”), the Sponsor
and target in the acquisition. For more information about the Business Combination, see our Current Report on Form 8-K filed with the
U.S. Securities and Exchange Commission (the “SEC”) on November December 15, 2022.
While we are using our best efforts to complete the
Business Combination as soon as practicable, the Board believes that there will not be sufficient time before the Termination Date (August
9, 2023) to complete the Business Combination. Accordingly, the Board believes that in order to be able to consummate the Business Combination,
we will need to obtain the Extension. Without the Extension, the Board believes that there is significant risk that we might not, despite
our best efforts, be able to complete the Business Combination on or before the Termination Date. If that were to occur, we would be
precluded from completing the Business Combination and would be forced to liquidate even if our stockholders are otherwise in favor of
consummating the Business Combination.
If the Extension is approved and implemented, subject
to satisfaction of the conditions to closing in the Merger Agreement (including, without limitation, receipt of stockholder approval
of Business Combination), we intend to complete the Business Combination as soon as possible and in any event on or before the Extended
Date.
The Extension Amendment Proposal is required for
the implementation of the plan of the Board, to extend the date by which the Company has to complete our Business Combination. The purpose
of the Extension Amendment is to allow the Company more time to complete the Business Combination. In addition, we will not proceed with
the Extension if the number of redemptions or repurchases of our shares of Class A common stock issued in our IPO, which shares we refer
to as the “public shares,” causes us to have less than $5,000,001 of net tangible assets following approval of the Extension
Amendment Proposal.
In connection with the Extension Amendment Proposal,
public stockholders may elect to redeem their public shares for a per-share price, payable in cash, equal to the aggregate amount then
on deposit in the trust account (the “Trust Account”), including interest (which interest shall be net of taxes payable),
divided by the number of then outstanding shares of Class A common stock issued in our IPO, which shares we refer to as the “public
shares,” and which election we refer to as the “Election,” regardless of whether such public stockholders vote on the
Extension Amendment Proposal. We cannot predict the amount that will remain in the Trust Account if the Extension Amendment Proposal
is approved and the amount remaining in the Trust Account may be only a small fraction of the approximately $14,411,751 that was in the
Trust Account as of March 31, 2023, or approximately $14,675,427 expected in the Trust Account at the time of the Special Meeting.
If the Extension Amendment Proposal is approved by
the requisite vote of stockholders, the remaining holders of public shares will retain their right to redeem their public shares when
the Business Combination is submitted to the stockholders, subject to any limitations set forth in our charter as amended by the Extension
Amendment. In addition, public stockholders who do not make the Election would be entitled to have their public shares redeemed for cash
if the Company has not completed a business combination by the Extended Date. Even if the Extension is approved, we can provide no assurances
that the Business Combination will be consummated prior to the Extended Date.
The Sponsor owns 2,623,120 shares of Class B Common
Stock (the “Class B Common Stock”) and 4,298,496 Private Placement Warrants, each of which is exercisable to purchase
one share of Class A common stock that were purchased from the previous sponsor of the Company on October 12, 2022.
The Sponsor is also the target for acquisition in
the Merger Agreement. We are not prohibited from pursuing a business combination with a business that is our Sponsor, or affiliated with
our Sponsor, officers or directors. The Sponsor, as the target, however, may have an interest in completing the business combination
as its shareholders stand to benefit from the merger consideration under the Merger Agreement, as well seeing that the equity it owns
in our company, and the deposits made to the Trust Account, including recently to extend the date of the business combination to February
9, 2023, are put to use in the business combination, and not liquidated in a winding up of our company. In addition, our Principal Executive
Officer and Chief Financial Officer, before becoming an officer for our company, worked for the Sponsor as a financial consultant and
was paid a monthly salary. In light of these concerns, we have obtained an opinion from an independent investment banking firm that is
a member of the Financial Industry Regulatory Authority, or FINRA, that our business combination is fair to the unaffiliated stockholders
of our company from a financial point of view. In the event of a liquidation, our Sponsor, and officers and directors will not receive
any monies held in the Trust Account as a result of their ownership of the Class B Common Stock, the Private Placement Warrants, from
any unsecured convertible loans for working capital or the promissory note issued in connection with the extension of the Business Combination
to February 9, 2023.
To exercise your redemption rights, you must
demand that the Company redeem your public shares for a pro rata portion of the funds held in the Trust Account, and tender your shares
to the Company’s transfer agent at least two business days prior to the Special Meeting (or July 27, 2023). You may tender
your shares by either delivering your share certificate to the transfer agent or by delivering your shares electronically using the Depository
Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system. If you hold your shares in street name, you will need to instruct
your bank, broker or other nominee to withdraw the shares from your account in order to exercise your redemption rights.
Based upon the current amount in the Trust Account
and the outstanding public shares as of the Record Date, the Company anticipates that the per-share price at which public shares will
be redeemed from cash held in the Trust Account will be approximately $14,675,427 at the time of the Special Meeting. The closing price
of the Company’s Class A common stock on July 5, 2023 was $10.73. The Company cannot assure stockholders that they will be able
to sell their shares of the Company’s Class A common stock in the open market, even if the market price per share is higher than
the redemption price stated above, as there may not be sufficient liquidity in its securities when such stockholders wish to sell their
shares.
Approval of the Extension Amendment Proposal is a
condition to the implementation of the Extension. In addition, we will not proceed with the Extension if the number of redemptions or
repurchases of our shares of Class A common stock issued in our IPO, which shares we refer to as the “public shares,” causes
us to have less than $5,000,001 of net tangible assets following approval of the Extension Amendment Proposal.
If the Extension Amendment Proposal is not approved
and we do not consummate the Business Combination by August 9, 2023, in accordance with our charter, 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 subject
to lawfully available funds therefor, redeem 100% of the shares of Class A common stock in consideration of a per-share price, payable
in cash, equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest
(net of taxes payable, less up to $100,000 of such net interest to pay dissolution expenses), by (B) the total number of then outstanding
shares of Class A common stock, which redemption will completely extinguish rights of public stockholders (including the right to receive
further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of the remaining stockholders and the Board in accordance with applicable law, dissolve and liquidate, subject
in each case to the Company’s obligations under the Delaware General Corporation Law, which we refer to as the “DGCL,”
to provide for claims of creditors and other requirements of applicable law.
There will be no distribution from the Trust Account
with respect to the Company’s warrants, which will expire worthless in the event of our winding up. In the event of a liquidation,
our Sponsor will not receive any monies held in the Trust Account as a result of its ownership of 2,623,120 shares of Class B Common
Stock and 4,298,496 Private Placement Warrants, each of which is exercisable to purchase one share of Class A common stock, that were
purchased by the Sponsor on October 12, 2022. As a consequence, a liquidating distribution will be made only with respect to the public
shares.
We reserve the right at any time to cancel the Special
Meeting and not to submit to our stockholders the Extension Amendment Proposal and implement the Extension Amendment. In the event the
Special Meeting is cancelled and a Business Combination is not consummated by August 9, 2023, we will dissolve and liquidate in accordance
with the charter.
If the Company liquidates, the Sponsor has agreed
to indemnify us to the extent any claims by a third party for services rendered or products sold to us, or any claims by a prospective
target business with which we have discussed entering into an acquisition agreement, reduce the amount of funds in the Trust Account
to below (i) $10.20 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation
of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay
taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to our Trust Account and except
as to any claims under our indemnity of the underwriters of our IPO against certain liabilities, including liabilities under the Securities
Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable
against a third party, the Sponsor will not be responsible to the extent of any liability for such third party claims. We cannot assure
you, however, that the Sponsor would be able to satisfy those obligations. Based upon the current amount in the Trust Account and the
outstanding public shares as of the Record Date, we anticipate that the per-share price at which public shares will be redeemed from
cash held in the Trust Account will be approximately $10.92. Nevertheless, the Company cannot assure you that the per share distribution
from the Trust Account, if the Company liquidates, will not be less than $10.20, plus interest, due to unforeseen claims of 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. If the Company 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.
Because the Company will not be complying with Section
280 of the DGCL as described in our prospectus filed with the SEC on August 6, 2021, 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 have been 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 the Extension Amendment Proposal is approved,
the Company, pursuant to the terms of the investment management trust agreement, dated effective August 4, 2022, by and between the Company
and Continental Stock Transfer & Trust Company (the “Trust Agreement”), will (i) remove from the Trust Account
an amount, which we refer to as the “Withdrawal Amount,” equal to the number of public shares properly redeemed multiplied
by the per-share price, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall
be net of taxes payable), divided by the number of then outstanding public shares and (ii) deliver to the holders of such redeemed public
shares their portion of the Withdrawal Amount. The remainder of such funds shall remain in the Trust Account and be available for use
by the Company to complete a business combination on or before the Extended Date. Holders of public shares who do not redeem their public
shares now will retain their redemption rights and their ability to vote on a business combination through the Extended Date if the Extension
Amendment Proposal is approved.
Our Board has fixed the close of business on July
5, 2023 as the date for determining the Company stockholders entitled to receive notice of and vote at the Special Meeting and any adjournment
thereof (the “Record Date”). Only holders of record of the Company’s common stock on that date are entitled
to have their votes counted at the Special Meeting or any adjournment thereof. On the Record Date of the Special Meeting, there were
1,553,004 shares of Class A Common Stock and 2,623,120 shares of Class B Common Stock outstanding. The Company’s warrants do not
have voting rights in connection with the Extension Amendment Proposal or the Adjournment Proposal.
This Proxy Statement contains important information
about the Special Meeting and the proposals. Please read it carefully and vote your shares.
We will pay for the entire cost of soliciting proxies
from our working capital. Our directors and officers may solicit proxies in person, by telephone or by other means of communication.
These parties will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other
agents for the cost of forwarding proxy materials to beneficial owners. While the payment of these expenses will reduce the cash available
to us to consummate an initial business combination if the Extension is approved, we do not expect such payments to have a material effect
on our ability to consummate an initial business combination.
This Proxy Statement is dated July 19, 2023 and
is first being mailed to stockholders on or about July 19, 2023.
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| July 19, 2023 |
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By
Order of the Board of Directors |
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/s/
Rick Iler |
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Rick
Iler |
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Principal
Executive Officer and Chief Financial Officer |
TABLE OF CONTENTS
QUESTIONS AND ANSWERS ABOUT
THE SPECIAL MEETING
These Questions and Answers are only summaries of
the matters they discuss. They do not contain all of the information that may be important to you. You should read carefully the entire
document, including the annexes to this Proxy Statement.
| Why am
I receiving this Proxy Statement? |
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We are a blank check company formed in Delaware
on January 2021, for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination with one or more businesses. Following the closing of the IPO on August 9, 2021 and the partial over-allotment
exercise on August 18, 2021, $107,023,296 ($10.20 per Unit) from the net proceeds sold in the IPO and over-allotment, including a
portion of the proceeds of the sale of the Private Warrants, was deposited in the Trust Account. Like most blank check companies,
our charter provides for the return of our IPO proceeds held in trust to the holders of shares of Class A common stock sold in our
IPO if there is no qualifying business combination(s) consummated on or before a certain date, which was initially November 9, 2022,
but was extended to August 9, 2023, as provided in our Charter, as a result of monies deposited by our Sponsor into the Trust Account.
Our Board has determined that it is in the best
interests of the Company to amend the Company’s charter again to extend the date we have to consummate a business combination
up to six times, each by an additional month, for an aggregate of six additional months (i.e. from August 9, 2023 (the “Termination
Date”) up to February 9, 2024) in order to allow the Company more time to complete the Business Combination. Therefore,
our Board is submitting the proposals described in this proxy statement for the stockholders to consider and vote upon. The sole
purpose of the Extension Amendment Proposal and, if necessary, the Adjournment Proposal, is to allow us additional time to complete
the Business Combination pursuant to that certain Merger Agreement, dated as of December 14, 2022, by and among us, DPLS and the
other parties thereto. For more information about the Business Combination, see our Current Report on Form 8-K filed with the SEC
December 15, 2022. |
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| What
is being voted on? |
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You are being asked to vote on:
· a
proposal to amend our charter to extend, upon the request of the Sponsor and approval by the Board, the period of time for us to
consummate a business combination up to six times, each by an additional month, for an aggregate of six additional months (i.e. from
August 9, 2023 to February 9, 2024 or such earlier date as determined by the Board); and
· a
proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation
and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Extension
Amendment Proposal.
The Extension Amendment Proposal is required
for the implementation of our Board’s plan to extend the date that we have to complete our initial business combination. The
purpose of the Extension Amendment is to allow the Company more time to complete the Business Combination. Approval of the Extension
Amendment Proposal is a condition to the implementation of the Extension.
If the Extension Amendment Proposal is approved,
we will, pursuant to the Trust Agreement, remove the Withdrawal Amount from the Trust Account, deliver to the holders of redeemed
public shares their portion of the Withdrawal Amount and retain the remainder of the funds in the Trust Account for our use in connection
with consummating a business combination on or before the Extended Date.
However, we will not proceed with the Extension
if redemptions of our public shares cause us to have less than $5,000,001 of net tangible assets following approval of the Extension
Amendment Proposal.
If the Extension Amendment Proposal is approved
and the Extension is implemented, the removal of the Withdrawal Amount from the Trust Account in connection with the Election will
reduce the amount held in the Trust Account following the Election. We cannot predict the amount that will remain in the Trust Account
if the Extension Amendment Proposal is approved and the amount remaining in the Trust Account may be only a small fraction of the
approximately $14,411,751 that was in the Trust Account as of March 31, 2023 or approximately $14,675,427 expected in the Trust Account
at the time of the Special Meeting. In such event, we may need to obtain additional funds to complete an initial business combination,
and there can be no assurance that such funds will be available on terms acceptable to the parties or at all.
We reserve the right at any time to cancel the
Special Meeting and not to submit to our stockholders the Extension Amendment Proposal and implement the Extension Amendment.
If the Extension Amendment Proposal is not approved
and we have not consummated the Business Combination by August 9, 2023, we will (i) cease all operations except for the purpose of
winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully available
funds therefor, redeem 100% of the shares of Class A common stock in consideration of a per-share price, payable in cash, equal to
the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest (net of taxes
payable, less up to $100,000 of such net interest to pay dissolution expenses), by (B) the total number of then outstanding shares
of Class A common stock, which redemption will completely extinguish rights of public stockholders (including the right to receive
further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such
redemption, subject to the approval of the remaining stockholders and the Board in accordance with applicable law, dissolve and liquidate,
subject in each case to the Company’s obligations under the DGCL to provide for claims of creditors and other requirements
of applicable law.
There will be no distribution from the Trust
Account with respect to our warrants, which will expire worthless in the event of our winding up. In the event of a liquidation,
our Sponsor, directors and officers will not receive any monies held in the Trust Account as a result of their ownership of the Class
B Common Stock and Private Placement Warrants. |
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| Why is
the Company proposing the Extension Amendment Proposal and the Adjournment Proposal? |
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Our charter provides that we have until August
9, 2023 to complete our initial business combination. Our Board has determined that it is in the best interests of our stockholders
to approve the Extension Amendment Proposal and, if necessary, the Adjournment Proposal, to allow for additional time to consummate
the Business Combination. While we are using our best efforts to complete the Business Combination as soon as practicable, the Board
believes that there will not be sufficient time before the Termination Date to complete the Business Combination. Accordingly, the
Board believes that in order to be able to consummate the Business Combination, we will need to obtain the Extension. Without the
Extension, the Board believes that there is significant risk that we might not, despite our best efforts, be able to complete the
Business Combination on or before August 9, 2023. If that were to occur, we would be precluded from completing the Business Combination
and would be forced to liquidate even if our stockholders are otherwise in favor of consummating the Business Combination.
If the Extension is approved and implemented,
subject to satisfaction of the conditions to closing in the Merger Agreement (including, without limitation, receipt of stockholder
approval of the Business Combination), we intend to complete the Business Combination as soon as possible and in any event on or
before the Extended Date.
The Company believes that given its expenditure
of time, effort and money on the Business Combination, circumstances warrant providing public stockholders an opportunity to consider
the Business Combination. Accordingly, the Board is proposing the Extension Amendment Proposal to amend our charter in the form set
forth in Annex A hereto to extend, upon the request of the Sponsor and approval by the Board, the period of time for us to (i)
consummate a business combination, (ii) cease our operations if we fail to complete such business combination, and (iii) redeem or
repurchase 100% of our Class A common stock included as part of the units sold in our IPO, up to six times, each by an additional
month, for an aggregate of six additional months (i.e. from August 9, 2023 to February 9, 2024) or such earlier date as determined
by the Board.
You are not being asked to vote on the Business
Combination at this time. If the Extension is implemented and you do not elect to redeem your public shares, provided that you are
a stockholder on the record date for a meeting to consider the Business Combination, you will retain the right to vote on the Business
Combination when it is submitted to stockholders and the right to redeem your public shares for cash in the event the Business Combination
is approved and completed or we have not consummated a business combination with DPLS or any other target by the Extended Date.
If the Extension Amendment Proposal is not approved,
we may put the Adjournment Proposal to a vote in order to seek additional time to obtain sufficient votes in support of the Extension.
If the Adjournment Proposal is not approved, the Board may not be able to adjourn the Special Meeting to a later date or dates in
the event that there are insufficient votes for, or otherwise in connection with, the approval of the Extension Amendment Proposal.
We reserve the right at any time to cancel the
Special Meeting and not to submit to our stockholders the Extension Amendment Proposal and implement the Extension Amendment. In
the event the Special Meeting is cancelled and a Business Combination is not consummated by August 9, 2023, we will dissolve and
liquidate in accordance with the charter. |
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| Other
than the Extension Amendment Proposal, has the Company conducted any prior extensions that required an amendment and associated redemption
of public shares? |
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Yes. On January 31, 2023, the Company filed with
the Secretary of State of the State of Delaware an amendment to the Company’s amended and restated certificate of incorporation
to extend the date by which the Company must consummate a Business Combination up to six times, each by an additional month, for
an aggregate of six additional months (i.e. from February 9, 2023 up to August 9, 2023) or such earlier date as determined by the
board of directors.
The Company’s stockholders approved the
extension amendment at a Special Meeting of stockholders of the Company on January 31, 2023, by a 75% vote of the Company’s
issued and outstanding shares of Class A common stock and Class B common stock held of record as of December 21, 2022, the record
date for the special meeting.
In connection with the special meeting, stockholders
holding 9,149,326 public shares properly exercised their right to redeem their shares (and did not withdraw their redemption) for
cash at a redemption price of approximately $10.39 per share, for an aggregate redemption amount of approximately $95,061,497. Following
such redemptions, approximately $14,038,481 was left in trust and 1,343,154 public shares remained outstanding. The amount held in
trust has increased since that time, to $14,411,751 as of March 31, 2023, with 1,343,154 public shares issued and outstanding as
of the same date. |
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| Why should
I vote “FOR” the Extension Amendment Proposal? |
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Our Board believes stockholders will benefit
from the consummation of the Business Combination and is proposing the Extension Amendment Proposal to extend the date by which we
have to complete a business combination until the Extended Date. The Extension would give us additional time to complete the Business
Combination.
The Board believes that it is in the best
interests of our stockholders that the Extension be obtained to provide additional amount of time to consummate the Business Combination.
Without the Extension, we believe that there
is substantial risk that we might not, despite our best efforts, be able to complete the Business Combination on or before August
9, 2023. If that were to occur, we would be precluded from completing the Business Combination and would be forced to liquidate even
if our stockholders are otherwise in favor of consummating the Business Combination.
We believe that given our expenditure of time,
effort and money on the Business Combination, circumstances warrant providing public stockholders an opportunity to consider the
Business Combination and that it is in the best interests of our stockholders that we obtain the Extension. Our Board believes the
Business Combination will provide significant benefits to our stockholders. For more information about the Business Combination,
see Current Report on Form 8-K filed with the SEC December 15, 2022.
Our Board recommends that you vote in favor
of the Extension Amendment Proposal. |
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| Why should
I vote “FOR” the Adjournment Proposal? |
If the Adjournment Proposal is not approved by
our stockholders, our Board may not be able to adjourn the Special Meeting to a later date in the event that there are insufficient
votes for, or otherwise in connection with, the approval of the Extension Amendment Proposal.
We reserve the right at any time to cancel
the Special Meeting and not to submit to our stockholders the Extension Amendment Proposal and implement the Extension Amendment.
In the event the Special Meeting is cancelled and a Business Combination is not consummated by August 9, 2023, we will dissolve and
liquidate in accordance with the charter. |
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| When
would the Board abandon the Extension Amendment Proposal? |
We
intend to hold the Special Meeting to approve the Extension Amendment and only if the Board has determined as of the time of the
Special Meeting that we may not be able to complete the Business Combination on or before August 9, 2023. If we complete the Business
Combination on or before August 9, 2023, we will not implement the Extension. Additionally, our Board will abandon the Extension
Amendment if our stockholders do not approve the Extension Amendment Proposal. Notwithstanding stockholder approval of the Extension
Amendment Proposal, our Board will retain the right to abandon and not implement the Extension Amendment at any time without any
further action by our stockholders, subject to the terms of the Merger Agreement. In addition, we will not proceed with the Extension
if the number of redemptions or repurchases of our public shares causes us to have less than $5,000,001 of net tangible assets following
approval of the Extension Amendment Proposal. |
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| How do
the Company insiders intend to vote their shares? |
The
Sponsor is expected to vote any common stock over which it has voting control (including any public shares owned by them) in favor
of the Extension Amendment Proposal. Currently, our Sponsor owns approximately 100% of our issued and outstanding shares of Class
B Common Stock, including 2,623,120 shares of Class B Common Stock. This amounts to approximately 63% of all of the outstanding shares
of common stock, including Class A Common Stock and Class B Common Stock. Sponsor does not intend to purchase shares of
common stock in the open market or in privately negotiated transactions in connection with the stockholder vote on the Extension
Amendment. |
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| What
vote is required to adopt the proposals? |
The approval of the Extension Amendment Proposal
will require the affirmative vote of holders of at least 65% of our outstanding shares of common stock on the Record Date.
The approval of the Adjournment Proposal
will require the affirmative vote of the majority of the votes cast by stockholders represented in person or by proxy. |
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| What
if I don’t want to vote “FOR” the Extension Amendment Proposal? |
If
you do not want the Extension Amendment Proposal to be approved, you must abstain, not vote, or vote “AGAINST” such proposal.
You will be entitled to redeem your public shares for cash in connection with this vote whether or not you vote on the Extension
Amendment Proposal so long as you elect to redeem your public shares for a pro rata portion of the funds available in the Trust Account
in connection with the Extension Amendment. If the Extension Amendment Proposal is approved, and the Extension is implemented, then
the Withdrawal Amount will be withdrawn from the Trust Account and paid to the redeeming holders. |
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| What
happens if the Extension Amendment Proposal is not approved? |
Our Board will abandon the Extension Amendment
if our stockholders do not approve the Extension Amendment Proposal.
If the Extension Amendment Proposal is not approved
and we have not consummated the Business Combination by the Termination Date, 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 subject to lawfully available
funds therefor, redeem 100% of the shares of Class A common stock in consideration of a per-share price, payable in cash, equal to
the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest (net of taxes
payable, less up to $100,000 of such net interest to pay dissolution expenses), by (B) the total number of then outstanding shares
of Class A common stock, which redemption will completely extinguish rights of public stockholders (including the right to receive
further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such
redemption, subject to the approval of the remaining stockholders and the Board in accordance with applicable law, dissolve and liquidate,
subject in each case to the Company’s obligations under the DGCL to provide for claims of creditors and other requirements
of applicable law.
There will be no distribution from the Trust
Account with respect to our warrants which will expire worthless in the event we wind up.
In the event of a liquidation, our Sponsor,
directors and officers and anchor investors will not receive any monies held in the Trust Account as a result of their ownership
of the Class B Common Stock or the Private Placement Warrants. |
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| If the
Extension Amendment Proposal is approved, what happens next? |
Please refer to the section entitled “Risk
Factors” more information about the risks relating to the Business Combination in the event the Extension is implemented.
If we liquidate, our public shareholders may
only receive approximately $10.92 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously
released to the Company to pay its tax obligations, and our warrants will expire worthless. This will also cause you to lose any
potential investment opportunity in a target company and the chance of realizing future gains on your investment through any price
appreciation in the combined company. Please pay particular attention to the section entitled “Risk Factors”
in this proxy statement for more information about the risks relating to the proposed Extension Amendment.
Upon approval of the Extension Amendment Proposal
by holders of at least 65% of the common stock outstanding as of the Record Date, we will file an amendment to the charter with the
Secretary of State of the State of Delaware in the form set forth in Annex A hereto. We will remain a reporting
company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and our units, Class A common
stock and public warrants will remain publicly traded.
If the Extension Amendment Proposal is approved,
the removal of the Withdrawal Amount from the Trust Account will reduce the amount remaining in the Trust Account and increase the
percentage interest of our common stock held by our Sponsor as a result of their ownership of the Class B Common Stock and Private
Placement Warrants.
Notwithstanding stockholder approval of the Extension
Amendment Proposal, our Board will retain the right to abandon and not implement the Extension Amendment at any time without any
further action by our stockholders, subject to the terms of the Merger Agreement.
We reserve the right at any time to cancel the
Special Meeting and not to submit to our stockholders the Extension Amendment Proposal and implement the Extension Amendment. In
the event the Special Meeting is cancelled and a Business Combination is not consummated by August 9, 2023, we will dissolve and
liquidate in accordance with the charter. |
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| What
happens to the Company’s warrants if the Extension Amendment Proposal is not approved? |
If
the Extension Amendment Proposal is not approved and we have not consummated the Business Combination by the Termination Date, 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 subject to lawfully available funds therefor, redeem 100% of the shares of Class A common stock in consideration
of a per-share price, payable in cash, equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the
Trust Account, including interest (net of taxes payable, less up to $100,000 of such net interest to pay dissolution expenses), by
(B) the total number of then outstanding shares of Class A common stock, which redemption will completely extinguish rights of public
stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as
promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Board in
accordance with applicable law, dissolve and liquidate, subject in each case to the Company’s obligations under the DGCL to
provide for claims of creditors and other requirements of applicable law. There will be no distribution from the Trust Account with
respect to our warrants, which will expire worthless in the event of our winding up. |
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| What
happens to the Company’s warrants if the Extension Amendment Proposal is approved? |
If
the Extension Amendment Proposal is approved, we will retain the blank check company restrictions previously applicable to us and
continue to attempt to consummate a business combination until the Extended Date. The public warrants will remain outstanding and
only become exercisable until the later of 30 days after the completion of our initial business combination and 12 months from the
closing of our IPO, provided 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 (or we permit holders
to exercise warrants on a cashless basis). |
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| Am I
able to exercise my redemption rights in connection with the Business Combination? |
If
you were a holder of common stock as of the close of business on the Record Date for a meeting to seek stockholder approval of the
Business Combination, you will be able to vote on the Business Combination. The Special Meeting relating to the Extension Amendment
Proposal does not affect your right to elect to redeem your public shares in connection with the Business Combination, subject to
any limitations set forth in our charter (including the requirement to submit any request for redemption in connection with the Business
Combination on or before the date that is one business day before the special meeting of stockholders to vote on the Business Combination).
If you disagree with the Business Combination, you will retain your right to redeem your public shares upon consummation of the Business
Combination in connection with the stockholder vote to approve the Business Combination, subject to any limitations set forth in
our charter. |
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| How do
I attend the meeting? |
You will need your control number for access.
If you do not have your control number, contact Continental Stock Transfer & Trust Company at the phone number or e-mail address
below. Beneficial investors who hold shares through a bank, broker or other intermediary, will need to contact them and obtain a
legal proxy. Once you have your legal proxy, contact Continental Stock Transfer & Trust Company to have a control number generated.
Continental Stock Transfer & Trust Company contact information is as follows: 917-262-2373, or email proxy@continentalstock.com.
Stockholders will also have the option to listen
to the Special Meeting by telephone by calling:
· Within
the U.S. and Canada: +1 800-450-7155 (toll-free)
· Outside
of the U.S. and Canada: +1 857-999-9155 (standard rates apply)
The passcode for telephone access: 8769128#.
You will not be able to vote or submit questions unless you register for and log in to the Special Meeting webcast as described herein. |
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| How do
I change or revoke my vote? |
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You may change your vote by e-mailing a later-dated,
signed proxy card to info@dwacspac.com, so that it is received by us prior to the Special Meeting or by attending the Special Meeting
online and voting. You also may revoke your proxy by sending a notice of revocation to us, which must be received by us prior to
the Special Meeting.
Please note, however, that if on the Record
Date your shares were held, not in your name, but rather in an account at a brokerage firm, custodian bank, or other nominee, then
you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by
that organization. If your shares are held in street name, and you wish to attend the Special Meeting and vote at the Special Meeting
online, you must follow the instructions included with the enclosed proxy card. |
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| How are
votes counted? |
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Votes will be counted by the inspector of election
appointed for the meeting, who will separately count “FOR” and “AGAINST” votes and abstentions. The Extension
Amendment Proposal must be approved by the affirmative vote of at least 65% of the outstanding shares as of the record date of our
common stock, including the Class A common stock and Class B Common Stock, voting together as a single class. Accordingly, a Company
stockholder’s failure to vote by proxy or to vote online at the Special Meeting or an abstention with respect to the Extension
Amendment Proposal will have the same effect as a vote “AGAINST” such proposal.
The approval of the Adjournment Proposal requires
the affirmative vote of the majority of the votes cast by stockholders represented in person or by proxy. Accordingly, a Company
stockholder’s failure to vote by proxy or to vote online at the Special Meeting will not be counted towards the number of shares
of common stock required to validly establish a quorum, and if a valid quorum is otherwise established, it will have no effect on
the outcome of any vote on the Adjournment Proposal.
Abstentions will be counted in connection
with the determination of whether a valid quorum is established but will have no effect on the outcome of the Adjournment Proposal. |
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| If my
shares are held in “street name,” will my broker automatically vote them for me? |
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No.
Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with
respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures
provided to you by your broker, bank, or nominee. We believe all the proposals presented to the stockholders will be considered non-discretionary
and therefore your broker, bank, or nominee cannot vote your shares without your instruction. Your bank, broker, or other nominee
can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance
with directions you provide. If your shares are held by your broker as your nominee, which we refer to as being held in “street
name,” you may need to obtain a proxy form from the institution that holds your shares and follow the instructions included
on that form regarding how to instruct your broker to vote your shares. |
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| What
is a quorum requirement? |
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A quorum of stockholders is necessary to hold
a valid meeting. Holders of a majority in voting power of our common stock on the record date issued and outstanding and entitled
to vote at the Special Meeting, present in person or represented by proxy, constitute a quorum.
Your shares will be counted towards the
quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote
online at the Special Meeting. Abstentions will be counted towards the quorum requirement. In the absence of a quorum, the chairman
of the meeting has power to adjourn the Special Meeting. As of the record date for the Special Meeting, holders of a majority of
the outstanding shares of stock entitled to vote will constitute a quorum. |
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| Who can
vote at the Special Meeting? |
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Only holders of record of our common stock at
the close of business on July 5, 2023 are entitled to have their vote counted at the Special Meeting and any adjournments or postponements
thereof. On this record date, 1,553,004 shares of our Class A Common Stock and 2,623,120 shares of our Class B Common Stock were
outstanding and entitled to vote.
Stockholder of Record: Shares Registered in
Your Name. If on the record date your shares were registered directly in your name with our transfer agent, Continental Stock
Transfer & Trust Company, then you are a stockholder of record. As a stockholder of record, you may vote online at the Special
Meeting or vote by proxy. Whether or not you plan to attend the Special Meeting online, we urge you to fill out and return the enclosed
proxy card to ensure your vote is counted.
Beneficial Owner: Shares Registered
in the Name of a Broker or Bank. If on the record date your shares were held, not in your name, but rather in an account at a
brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in “street name”
and these proxy materials are being forwarded to you by that organization. As a beneficial owner, you have the right to direct your
broker or other agent on how to vote the shares in your account. You are also invited to attend the Special Meeting. However, since
you are not the stockholder of record, you may not vote your shares online at the Special Meeting unless you request and obtain a
valid proxy from your broker or other agent. |
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| Does
the Board recommend voting for the approval of the Extension Amendment Proposal and the Adjournment Proposal? |
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Yes.
After careful consideration of the terms and conditions of these proposals, our Board has determined that the Extension Amendment
and, if presented, the Adjournment Proposal are in the best interests of the Company and its stockholders. The Board recommends that
our stockholders vote “FOR” the Extension Amendment Proposal and the Adjournment Proposal. |
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| What
interests do the Company’s Sponsor, directors and officers have in the approval of the proposals? |
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Our Sponsor owns 2,623,120 shares of Class B
Common Stock and 4,298,496 Private Placement Warrants, which would expire worthless if a business combination is not consummated.
Each of the shares of Class B Common Stock and the Private Placement Warrants are exercisable to purchase one share of Class A common
stock and were purchased from the previous sponsor of the Company on October 12, 2022.
In the event of a liquidation, our Sponsor, and
officers and directors will not receive any monies held in the Trust Account from any unsecured convertible loans for working capital
or the promissory note issued in connection with the extension of the Business Combination to August 9, 2023.
In short, the Sponsor has an economic interest
in achieving the Business Combination such that its investments made into our company, from its Class B Common Stock, Private Placement
Warrants, working capital loans and promissory note are not lost in a liquidation.
The Sponsor is also the target for acquisition
in the Merger Agreement. We are not prohibited from pursuing a business combination with a business that is our Sponsor, or affiliated
with our Sponsor, officers or directors. The Sponsor, as the target, however, may have an interest in completing the business combination
as its shareholders stand to benefit from the merger consideration under the Merger Agreement, as well seeing that the equity it
owns in our company, and the deposits made to the Trust Account, including to extend the date of the business combination from November
9, 2022 to February 9, 2023, and then again from February 9, 2023 to August 9, 2023, and the working capital advances to run the
business, are put to use in the business combination, and not liquidated in a winding up of our company. In addition, our Principal
Executive Officer and Chief Financial Officer, before becoming an officer for our company, worked for the Sponsor as a financial
consultant and was paid a monthly salary. In light of these concerns, we have obtained an opinion from an independent investment
banking firm that is a member of the Financial Industry Regulatory Authority, or FINRA, that our business combination is fair to
the unaffiliated stockholders of our company from a financial point of view. In the event of a liquidation, our Sponsor, and officers
and directors will not receive any monies held in the Trust Account as a result of their ownership of the Class B Common Stock, the
Private Placement Warrants, from any advances for working capital or the promissory notes issued in connection with the extension
of the Business Combination to August 9, 2023.
See the section entitled “The Extension
Amendment Proposal — Interests of our Sponsor, Directors and Officers.” |
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| Do I
have appraisal rights if I object to the Extension Amendment Proposal? |
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Our
stockholders do not have appraisal rights in connection with the Extension Amendment Proposal under the DGCL. |
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| What
do I need to do now? |
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We
urge you to read carefully and consider the information contained in this Proxy Statement, including the annexes, and to consider
how the proposals will affect you as our stockholder. You should then vote as soon as possible in accordance with the instructions
provided in this Proxy Statement and on the enclosed proxy card. |
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| How do
I vote? |
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If you are a holder of record of our common stock,
you may vote online at the Special Meeting or by submitting a proxy for the Special Meeting. Whether or not you plan to attend the
Special Meeting online, we urge you to vote by proxy to ensure your vote is counted. You may submit your proxy by completing, signing,
dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. You may still attend the Special
Meeting and vote online if you have already voted by proxy.
If your shares of our common stock are
held in “street name” by a broker or other agent, you have the right to direct your broker or other agent on how to vote
the shares in your account. You are also invited to attend the Special Meeting. However, since you are not the stockholder of record,
you may not vote your shares online at the Special Meeting unless you request and obtain a valid proxy from your broker or other
agent. |
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| How do
I redeem my shares of Class A common stock? |
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If the Extension is implemented, each of our
public stockholders may seek to redeem all or a portion of its public shares at a per-share price, payable in cash, equal to the
aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided
by the number of then outstanding public shares. You will also be able to redeem your public shares in connection with any stockholder
vote to approve a proposed business combination, or if we have not consummated a business combination with DPLS or any other target
by the Extended Date.
In order to exercise your redemption rights,
you must, prior to 5:00 p.m. Eastern time on July 27, 2023 (two business days before the Special Meeting) tender your shares physically
or electronically and submit a request in writing that we redeem your public shares for cash to Continental Stock Transfer &
Trust Company, our transfer agent, at the following address:
Continental Stock Transfer & Trust Company, 1 State Street
Plaza, 30th Floor, New York, New York 10004, Attn: SPAC Redemption Team, spacredemptions@continentalstock.com.
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| What
should I do if I receive more than one set of voting materials? |
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You
may receive more than one set of voting materials, including multiple copies of this Proxy Statement and multiple proxy cards or
voting instruction cards, if your shares are registered in more than one name or are registered in different accounts. For example,
if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage
account in which you hold shares. Please complete, sign, date and return each proxy card and voting instruction card that you receive
in order to cast a vote with respect to all of your Company shares. |
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| Who is paying for
this proxy solicitation? |
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We
will pay for the entire cost of soliciting proxies from our working capital. Our directors and officers may solicit proxies in person,
by telephone or by other means of communication. These parties will not be paid any additional compensation for soliciting proxies.
We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners. While
the payment of these expenses will reduce the cash available to us to consummate an initial business combination if the Extension
is approved, we do not expect such payments to have a material effect on our ability to consummate an initial business combination. |
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| Who can help answer
my questions? |
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If you have questions about the proposals or
if you need additional copies of the Proxy Statement or the enclosed proxy card you should contact us at: Global System Dynamics,
Inc., info@gsdxyz.com.
You may also obtain additional information
about the Company from documents filed with the SEC by following the instructions in the section entitled “Where You Can
Find More Information.” |
FORWARD-LOOKING STATEMENTS
Some of the statements contained in this proxy statement
constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations,
beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not
historical facts. Forward-looking statements reflect our current views with respect to, among other things, the pending Business Combination,
our capital resources and results of operations. Likewise, our financial statements and all of our statements regarding market conditions
and results of operations are forward-looking statements. In some cases, you can identify these forward-looking statements by the use
of terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,”
“may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,”
“intends,” “plans,” “estimates,” “anticipates” or the negative version of these words
or other comparable words or phrases.
The forward-looking statements contained in this
proxy statement reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions
and changes in circumstances that may cause its actual results to differ significantly from those expressed in any forward-looking statement.
We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following
factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the
forward-looking statements:
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our ability to complete
the Business Combination; |
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the anticipated benefits
of the Business Combination; |
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the volatility of the market
price and liquidity of our securities; |
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the use of funds not held
in the Trust Account; and |
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the competitive environment
in which our successor will operate following the Business Combination. |
While forward-looking statements reflect our good
faith beliefs, they are not guarantees of future performance. We disclaim any obligation to publicly update or revise any forward-looking
statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after
the date of this proxy statement, except as required by applicable law. For a further discussion of these and other factors that could
cause our future results, performance or transactions to differ significantly from those expressed in any forward-looking statement,
please see the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022,
as filed with the SEC on May 26, 2023, and in other reports we file with the SEC. You should not place undue reliance on any forward-looking
statements, which are based only on information currently available to us (or to third parties making the forward-looking statements).
RISK FACTORS
You should consider carefully all of the risks
described in our Annual Report on Form 10-K filed with the SEC on May 26, 2023, and in the other reports we file with the SEC before
making a decision to invest in our securities. Furthermore, if any of the following events occur, our business, financial condition and
operating results may be materially adversely affected or we could face liquidation. In that event, the trading price of our securities
could decline, and you could lose all or part of your investment. The risks and uncertainties described in the aforementioned filings
and below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are
not material, may also become important factors that adversely affect our business, financial condition and operating results or result
in our liquidation.
There are no assurances that the Extension
will enable us to complete a business combination or any related financing.
Approving the Extension involves a number of risks.
Even if the Extension is approved, the Company can provide no assurances that the Business Combination will be consummated prior to the
Extended Date. Our ability to consummate any business combination is dependent on a variety of factors, many of which are beyond our
control. If the Extension is approved, the Company expects to seek shareholder approval of the Business Combination following the SEC
declaring its Form S-4 effective, which includes our preliminary proxy statement/prospectus for the Business Combination. The Form S-4
has been filed, but has not been declared effective by the SEC, and the Company cannot complete the Business Combination unless the Form
S-4 is declared effective. As of the date of this Proxy Statement, the Company cannot estimate when and if the SEC will declare the Form
S-4 effective. Additional extensions past the Extended Date may be required, which may subject us and our stockholders to additional
risks and contingencies that would make it more challenging for us to complete the Business Combination or a transaction with an alternative
target if we cannot complete the Business Combination with DPLS.
Unless extended, the Merger Agreement may be terminated
at any time in accordance with its terms, including by either GSD or DPLS after August 9, 2023 (or after February 9, 2024 if extended
by GSD following the implementation of the Extension), and you may not have the chance to vote on the Business Combination if the Merger
Agreement is terminated beforehand. The Company will discuss an extension of the Merger Agreement with the relevant parties if the Extension
Amendment Proposal is approved and the Extension is implemented. However, it is possible that the parties may determine to restructure
or renegotiate such arrangements in view of evolving market and regulatory conditions. Under the terms of the Merger Agreement, DPLS
is not required to consummate the Business Combination if the Company does not have at least $5,000,001 in available cash (including
proceeds in connection with any private placement or any other alternative financing arrangement mutually agreed upon by the parties
and prior to giving effect to the payment of unpaid expenses and liabilities) immediately prior to the consummation of the Business Combination
(after taking into account payments required to satisfy redemptions by the Company’s stockholders) (the “Minimum Cash
Condition”). There can be no assurance that we can meet this Minimum Cash Condition or secure an alternative financing transaction
to support the Business Combination, or that we will find an alternative target if we are unable to consummate the Business Combination
with DPLS.
We are required to offer stockholders the opportunity
to redeem shares in connection with the Extension Amendment and, if needed, any additional extensions, and we will be required to offer
stockholders redemption rights again in connection with any stockholder vote to approve the Business Combination. Even if the Extension
or the Business Combination are approved by our stockholders, it is possible that redemptions will leave us with insufficient cash to
meet the Minimum Cash Condition or to consummate the Business Combination on commercially acceptable terms, or at all. The fact that
we have already had a redemption period in connection with an extension last January 2023, and will have separate redemption periods
in connection with the Extension and the Business Combination vote could exacerbate these risks. Other than in connection with a redemption
offer or liquidation, our stockholders may be unable to recover their investment except through sales of our shares on the open market.
The price of our shares may be volatile, and there can be no assurance that stockholders will be able to dispose of our shares at favorable
prices, or at all.
The SEC issued proposed rules to regulate special
purpose acquisition companies that, if adopted, may increase our costs and the time needed to complete our initial business combination.
With respect to the regulation of special purpose
acquisition companies like the Company (“SPACs”), on March 30, 2022, the SEC issued proposed rules (the “SPAC
Rule Proposals”) relating to, among other items, disclosures in business combination transactions involving SPACs and private
operating companies; the condensed financial statement requirements applicable to transactions involving shell companies; the use of
projections by SPACs in SEC filings in connection with proposed business combination transactions; the potential liability of certain
participants in proposed business combination transactions; and to the extent to which SPACs could become subject to regulation under
the Investment Company Act of 1940, as amended (the “Investment Company Act”), including a proposed rule that would
provide SPACs a safe harbor from treatment as an investment company if they satisfy certain conditions that limit a SPAC’s duration,
asset composition, business purpose and activities. These rules, if adopted, whether in the form proposed or in a revised form, may increase
the costs of and the time needed to negotiate and complete an initial business combination, and may constrain the circumstances under
which we could complete an initial business combination. Additional extensions past the Extended Date may be required, which may subject
us and our stockholders to additional risks and contingencies that would make it more challenging for us to complete the Business Combination
or a transaction with an alternative target if we cannot complete the Business Combination with DPLS.
If we are deemed to be an investment company
for purposes of the Investment Company Act, we would be required to institute burdensome compliance requirements and our activities would
be severely restricted. As a result, in such circumstances, unless we are able to modify our activities so that we would not be deemed
an investment company, we would expect to abandon our efforts to complete an initial business combination and instead to liquidate the
Company.
As described further above, the SPAC Rule Proposals
relate, among other matters, to the circumstances in which SPACs such as the Company could potentially be subject to the Investment Company
Act and the regulations thereunder. The SPAC Rule Proposals would provide a safe harbor for such companies from the definition of “investment
company” under Section 3(a)(1)(A) of the Investment Company Act, provided that a SPAC satisfies certain criteria, including a limited
time period to announce and complete a de-SPAC transaction. Specifically, to comply with the safe harbor, the SPAC Rule Proposals would
require a company to file a report on Form 8-K announcing that it has entered into an agreement with a target company for a business
combination no later than 18 months after the effective date of its registration statement for its initial public offering (the “IPO
Registration Statement”). The Company would then be required to complete its initial business combination no later than 24
months after the effective date of the IPO Registration Statement, which is August 9, 2023.
Because the SPAC Rule Proposals have not yet been
adopted, there is currently uncertainty concerning the applicability of the Investment Company Act to a SPAC, including a company like
ours, which will likely not complete its business combination within 24 months after the effective date of the IPO Registration Statement.
Any business combination after 24 months would not have the benefit of the safe harbor and approving the Extension means that we may
need and use potentially 30 months from the IPO to complete a business combination. Given possible delays, possible amendments to the
Merger Agreement, and potential restructuring of the Business Combination, we may seek a further extension, even past the Extension Date,
to a date beyond 30 months after the effective date of the IPO Registration Statement. As a result, it is possible that a claim could
be made that we have been operating as an unregistered investment company.
If we are deemed to be an investment company under
the Investment Company Act, our activities would be severely restricted. In addition, we would be subject to burdensome compliance requirements.
We do not believe that our principal activities will subject us to regulation as an investment company under the Investment Company Act.
However, if we are deemed to be an investment company and subject to compliance with and regulation under the Investment Company Act,
we would be subject to additional regulatory burdens and expenses for which we have not allotted funds. As a result, unless we are able
to modify our activities so that we would not be deemed an investment company, we would expect to abandon our efforts to complete an
initial business combination and instead to liquidate the Company.
To mitigate the risk that we might be deemed
to be an investment company for purposes of the Investment Company Act, we may, at any time, instruct the trustee to liquidate the securities
held in the Trust Account and instead to hold the funds in the Trust Account in cash until the earlier of the consummation of our initial
business combination or our liquidation. As a result, following the liquidation of securities in the Trust Account, we would likely receive
minimal interest, if any, on the funds held in the Trust Account, which would reduce the dollar amount our public stockholders would
receive upon any redemption or liquidation of the Company.
The funds in the Trust Account have, since our initial
public offering, been held only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds
investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company
Act. However, to mitigate the risk of us being deemed to be an unregistered investment company (including under the subjective test of
Section 3(a)(1)(A) of the Investment Company Act) and thus subject to regulation under the Investment Company Act, we may, at any time,
and we expect that we will, on or prior to the 24-month anniversary of the effective date of the IPO Registration Statement, instruct
Continental Stock Transfer & Trust Company, the trustee with respect to the Trust Account, to liquidate the U.S. government treasury
obligations or money market funds held in the Trust Account and thereafter to hold all funds in the Trust Account in cash until the earlier
of consummation of our initial business combination or liquidation of the Company. Following such liquidation, we would likely receive
minimal interest, if any, on the funds held in the Trust Account. However, interest previously earned on the funds held in the Trust
Account still may be released to us to pay our taxes, if any, and certain other expenses as permitted. As a result, any decision to liquidate
the securities held in the Trust Account and thereafter to hold all funds in the Trust Account in cash would reduce the dollar amount
our public stockholders would receive upon any redemption or liquidation of the Company.
In addition, even prior to the 24-month anniversary
of the effective date of the IPO Registration Statement, we may be deemed to be an investment company. The longer that the funds in the
Trust Account are held in short-term U.S. government treasury obligations or in money market funds invested exclusively in such securities,
even prior to the 24-month anniversary, the greater the risk that we may be considered an unregistered investment company, in which case
we may be required to liquidate the Company. Accordingly, we may determine, in our discretion, to liquidate the securities held in the
Trust Account at any time, even prior to the 24-month anniversary, and instead hold all funds in the Trust Account in cash, which would
further reduce the dollar amount our public stockholders would receive upon any redemption or liquidation of the Company.
Since the Sponsor will lose its entire investment
in us if an initial business combination is not completed, and since the Sponsor is also the target in the acquisition, it may have a
conflict of interest in the approval of the proposals at the Special Meeting.
There will be no distribution from the Trust Account
with respect to the Company’s warrants, which will expire worthless in the event of our winding up. In the event of a liquidation,
our Sponsor will not receive any monies held in the Trust Account as a result of its ownership of 2,623,120 shares of Class B Common
Stock and 4,298,496 Private Placement Warrants, each of which is exercisable to purchase one share of Class A common stock that were
purchased from the previous sponsor of the Company on October 12, 2022. As a consequence, a liquidating distribution will be made only
with respect to the public shares.
The Sponsor is also the target for acquisition by
our company as a result of the Merger Agreement. We are not prohibited from pursuing a business combination with a business that is our
Sponsor, or affiliated with our Sponsor, officers or directors. The Sponsor, as the target, however, may have an interest in completing
the business combination as its shareholders stand to benefit from the merger consideration as well seeing that the equity it owns in
our company, and the deposits made to the Trust Account, including recently to extend the date of the business combination to August
9, 2023, as well as the working capital advances it has infused into our company, are put to use in the business combination, and not
liquidated in a winding up of our company.
In addition, our Principal Executive Officer and
Chief Financial Officer, before becoming an officer for our company, worked for the Sponsor as a financial consultant and was paid a
monthly salary. In light of these concerns, we have obtained an opinion from an independent investment banking firm that is a member
of the Financial Industry Regulatory Authority, or FINRA, that our business combination is fair to our unaffiliated shareholders from
a financial point of view. Despite this, the personal and financial interests of our Sponsor may have influenced its motivation in identifying
and selecting the Sponsor as target for its target business combination and consummating the Business Combination in order to close the
Business Combination and therefore may have interests different from, or in addition to, your interests as a stockholder in connection
with the proposals at the Special Meeting.
We have incurred and expect to incur significant
costs associated with the Business Combination. Whether or not the Business Combination is completed, the incurrence of these costs will
reduce the amount of cash available to be used for other corporate purposes by us if the Business Combination is not completed.
We and the target DPLS expect to incur significant
transaction and transition costs associated with the Business Combination and operating as a public company following the closing of
the Business Combination. We and DPLS may also incur additional costs to retain key employees. Certain transaction expenses incurred
in connection with the Merger Agreement, including all legal, accounting, consulting, investment banking and other fees, expenses and
costs, will be paid by the combined company following the closing of the Business Combination. Even if the Business Combination is not
completed, we expect to incur a significant amount in expenses. These expenses will reduce the amount of cash available to be used for
other corporate purposes by us if the Business Combination is not completed.
Unless extended, the Merger Agreement may be
terminated at any time in accordance with its terms, including by either GSD or DPLS after the Termination Date of August 9, 2023 and
you may not have the chance to vote on the Business Combination.
The
Merger Agreement is subject to a number of conditions which must be satisfied or waived in order to complete the Business Combination
and the Merger Agreement may be terminated at any time, even prior to the Extension, under certain customary and limited circumstances,
including among other reasons, by the mutual written consent of GSD and DPLS; (ii) by GSD, subject to certain exceptions, if any of the
representations or warranties made by DPLS are not true and correct or if DPLS fails to perform any of its covenants or agreements under
the BCA (including an obligation to consummate the Closing) such that certain conditions to the obligations of GSD could not be satisfied
and the breach (or breaches) of such representations or warranties or failure (or failures) to perform such covenants or agreements is
(or are) not cured or cannot be cured within the earlier of (A) thirty (30) days after written notice thereof, and (B) August 9, 2023 ;
(iii) by DPLS, subject to certain exceptions, if any of the representations or warranties made by GSD are not true and correct or if
GSD fails to perform any of its covenants or agreements under the BCA (including an obligation to consummate the Closing) such that the
condition to the obligations of DPLS could not be satisfied and the breach (or breaches) of such representations or warranties or failure
(or failures) to perform such covenants or agreements is (or are) not cured or cannot be cured within the earlier of (A) thirty (30)
days after written notice thereof, and (B) the August 9, 2023; (iv) by either GSD or DPLS, if the Closing does not occur on or prior
to August 9, 2023, unless the breach of any covenants or obligations under the BCA by the party seeking to terminate proximately caused
the failure to consummate the transactions contemplated by the BCA; (v) by either GSD or DPLS, if (A) any governmental entity shall have
issued an order or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by
the BCA and such order or other action shall have become final and non-appealable; or (B) if the required DPLS or GSD stockholder consent
is not obtained; (vi) by GSD, if (A) DPLS does not deliver, or cause to be delivered to GSD a Transaction Support Agreement duly executed
by certain DPLS stockholders or (B) the DPLS stockholders meeting has been held, has concluded, the DPLS stockholders have duly voted,
and the DPLS stockholder approval was not obtained; (vii) by DPLS, should GSD not have timely taken such actions as are reasonably necessary
to extend the period of time for it to complete an initial business combination for an additional period of six months from February
9, 2023; provided, that it shall be the obligation of DPLS to timely make the deposit into the Trust Account in connection with such
extension, and the Company shall not have a right to terminate the BCA as a result of DPLS’ failure to make such deposit; (ix)
by GSD should DPLS not deposit into the Trust Account in a timely manner the funds necessary to extend the period for GSD to complete
an initial business combination for an additional period of six months from February 9, 2023, in accordance with, and as required pursuant
to, the BCA; and (x) by GSD should: (A) Nasdaq not approve the initial listing application for the combined company with Nasdaq in connection
with the Business Combination; (B) the combined company not have satisfied all applicable initial listing requirements of Nasdaq; or
(C) the common stock of the combined company not have been approved for listing on Nasdaq prior to the Closing Date.
In the period leading up to the Closing, other events
may occur that, pursuant to the Merger Agreement, would require GSD to agree to amend the Merger Agreement to consent to certain actions
or to waive rights that GSD is entitled to under those agreements. Such events could arise because of changes in the course of DPLS’s
business, a request by DPLS to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or the occurrence
of other events that would have a material adverse effect on DPLS’s business and would entitle GSD to terminate the Merger Agreement,
as applicable. In any of such circumstances, it would be in the discretion of GSD, acting through its Board, to grant its consent or
waive its rights. As of the date of this proxy statement, we do not believe there will be any changes or waivers that our directors and
officers would be likely to make after stockholder approval of the Business Combination has been obtained.
Moreover, in the event that the Merger Agreement
is terminated, or a special meeting of stockholders to approve the Business Combination is not held, you may not have the chance to vote
on the Business Combination.
During the pendency of the Business Combination,
GSD will not be able to enter into a business combination with another party because of restrictions in the Merger Agreement. Furthermore,
certain provisions of the Merger Agreement will discourage third parties from submitting alternative takeover proposals, including proposals
that may be superior to the arrangements contemplated by the Merger Agreement. There can be no assurance that GSD will find an alternative
target if it is unable to consummate the Business Combination with DPLS.
Covenants in the Merger Agreement impede the ability
of GSD to make acquisitions or complete other transactions that are not in the ordinary course of business pending completion of the
Business Combination. As a result, GSD may be at a disadvantage to its competitors during that period. In addition, while the Merger
Agreement is in effect, neither GSD nor DPLS may solicit, assist, facilitate the making, submission or announcement of, or intentionally
encourage any alternative acquisition proposal, such as a merger, material sale of assets or equity interests or other business combination,
with any third party, even though any such alternative acquisition could be favorable to GSD’s stockholders than the Business Combination.
In addition, if the Business Combination is not completed, these provisions will make it more difficult to complete an alternative business
combination following the termination of the Merger Agreement due to the passage of time during which these provisions have remained
in effect.
A 1% U.S. federal excise tax may be imposed
on us in connection with our redemptions of shares in connection with the Business Combination or other stockholder vote pursuant to
which stockholders would have a right to submit their shares for redemption (a “Redemption Event”).
Pursuant to the Inflation Reduction Act of 2022 (the
“IR Act”), commencing in 2023, a 1% U.S. federal excise tax is imposed on certain repurchases (including redemptions) of
stock by publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign corporations.
The excise tax is imposed on the repurchasing corporation and not on its stockholders. The amount of the excise tax is equal to 1% of
the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing
corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases
during the same taxable year. The U.S. Department of the Treasury (the “Treasury Department”) has authority to promulgate
regulations and provide other guidance regarding the excise tax. In December 2022, the Treasury Department issued Notice 2023-2, indicating
its intention to propose such regulations and issuing certain interim rules on which taxpayers may rely (the “Notice”). Under
the interim rules, liquidating distributions made by publicly traded domestic corporations are exempt from the excise tax. In addition,
any redemptions that occur in the same taxable year as a liquidation is completed will also be exempt from such tax. Accordingly, redemptions
of our public shares in connection with the Extension may subject us to the excise tax, unless one of the two exceptions above apply.
Redemptions would only occur if the Extension Amendment Proposal is approved by our stockholders and the Extension is implemented by
the Board.
As described in the section below entitled “The
Extension Amendment Proposal — Redemption Rights”, if the deadline for us to complete a Business Combination (currently August
9, 2023) is extended, our public stockholders will have the right to require us to redeem their public shares. Any redemption or other
repurchase may be subject to the excise tax. The extent to which we would be subject to the excise tax in connection with a Redemption
Event would depend on a number of factors, including: (i) the fair market value of the redemptions and repurchases in connection with
the Redemption Event, (ii) the nature and amount of any “PIPE” or other equity issuances in connection with the Business
Combination (or otherwise issued not in connection with the Redemption Event but issued within the same taxable year of the Business
Combination), (iii) if we fail to timely consummate a Business Combination and liquidate in a taxable year following a Redemption Event
and (iv) the content of any proposed or final regulations and other guidance from the Treasury Department. In addition, because the excise
tax would be payable by us and not by the redeeming holders, the mechanics of any required payment of the excise tax remains to be determined.
Except for franchise taxes and income taxes, the proceeds placed in the Trust Account and the interest earned thereon shall not be used
to pay for possible excise tax or any other fees or taxes that may be levied on us pursuant to any current, pending or future rules or
laws, including without limitation any excise tax due under the IRA on any redemptions or stock buybacks by us.
Were we considered to be a “foreign person,”
we might not be able to complete an initial Business Combination with a U.S. target company if such initial business combination is subject
to U.S. foreign investment regulations and review by a U.S. government entity such as the Committee on Foreign Investment in the United
States (“CFIUS”), or ultimately prohibited.
Certain federally licensed businesses in the United
States, such as broadcasters and airlines, may be subject to rules or regulations that limit foreign ownership. In addition, CFIUS is
an interagency committee authorized to review certain transactions involving foreign investment in the United States by foreign persons
in order to determine the effect of such transactions on the national security of the United States. Were we considered to be a “foreign
person” under such rules and regulations, any proposed Business Combination between us and a U.S. business engaged in a regulated
industry or which may affect national security could be subject to such foreign ownership restrictions and/or CFIUS review. The scope
of CFIUS was expanded by the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”) to include certain non-controlling
investments in sensitive U.S. businesses and certain acquisitions of real estate even with no underlying U.S. business. FIRRMA, and subsequent
implementing regulations that are now in force, also subject certain categories of investments to mandatory filings. If our potential
initial Business Combination with a U.S. business falls within the scope of foreign ownership restrictions, we may be unable to consummate
an initial Business Combination with such business. In addition, if our potential Business Combination falls within CFIUS’s jurisdiction,
we may be required to make a mandatory filing or determine to submit a voluntary notice to CFIUS, or to proceed with the initial Business
Combination without notifying CFIUS and risk CFIUS intervention, before or after closing the initial Business Combination. Our Sponsor
is a U.S. entity, and the officers and directors of our Sponsor are U.S. persons save one director who is Canadian. Our sponsor is not
controlled by and does not have substantial ties with a non-U.S. person. However, if CFIUS has jurisdiction over our initial Business
Combination, CFIUS may decide to block or delay our initial business combination, impose conditions to mitigate national security concerns
with respect to such initial Business Combination or order us to divest all or a portion of a U.S. business of the combined company if
we had proceeded without first obtaining CFIUS clearance. If we were considered to be a “foreign person,” foreign ownership
limitations, and the potential impact of CFIUS, may limit the attractiveness of a transaction with us or prevent us from pursuing certain
initial business combination opportunities that we believe would otherwise be beneficial to us and our shareholders. As a result, in
such circumstances, the pool of potential targets with which we could complete an initial Business Combination could be limited and we
may be adversely affected in terms of competing with other SPACs which do not have similar foreign ownership issues.
Moreover, the process of government review, whether
by CFIUS or otherwise, could be lengthy. Because we have only a limited time to complete our initial Business Combination, our failure
to obtain any required approvals within the requisite time period may require us to liquidate. If we liquidate, our public shareholders
may only receive the value in the trust account, and our warrants will expire worthless. This will also cause you to lose any potential
investment opportunity in a target company and the chance of realizing future gains on your investment through any price appreciation
in the combined company.
BACKGROUND
We are a blank check company formed in Delaware on
January 2021, for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar
business combination with one or more businesses.
There are currently 1,553,004 shares of Class A common
stock and 2,623,120 shares of Class B common stock issued and outstanding. In addition, we issued warrants to purchase 4,298,496 shares
of Class A common stock as part of our IPO, along with an aggregate of 5,216,233 warrants (convertible into an aggregate of 9,514,729
shares of Class A common stock) underlying the Private Placement Units issued to our Sponsor in a private placement simultaneously with
the consummation of our IPO. Each whole warrant entitles its holder to purchase one whole share of Class A common stock at an exercise
price of $11.50 per share. The warrants will become exercisable until the later of 30 days after the completion of our initial business
combination and 12 months from the closing of our IPO and expire five years after the completion of our initial business combination
or earlier upon redemption or liquidation. We have the ability to redeem outstanding warrants at any time after they become exercisable
and prior to their expiration, at a price of $0.01 per warrant, provided that the reported last sale price of our Class A common stock
equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for
any 20 trading days within a 30 trading-day period commencing once the warrants become exercisable and ending on the third trading day
prior to the date on which we give proper notice of such redemption and provided certain other conditions are met.
A total of $107,023,296 of the proceeds from our
IPO and the simultaneous sale of the Private Placement Units in a private placement transaction was placed in our Trust Account in the
United States maintained by Continental Stock Transfer & Trust Company, acting as trustee, invested in U.S. “government securities,”
within the meaning of Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open ended investment
company that holds itself out as a money market fund selected by us meeting the conditions of Rule 2a-7 of the Investment Company Act,
until the earlier of: (i) the consummation of a business combination or (ii) the distribution of the proceeds in the Trust Account as
described below.
Approximately $14,411,751 was held in the Trust
Account as of March 31, 2023, and approximately $14,675,427 is expected in the Trust Account at the time of the Special Meeting. The
mailing address of the Company’s principal executive office is 815 Walker Street, Suite 1155, Houston, TX 77002.
DPLS Business Combination
Merger Agreement
As previously announced, we entered into the Merger
Agreement on December 14, 2022. Pursuant to the Merger Agreement, the parties agreed, subject to the terms and conditions of the Merger
Agreement, to effect the Business Combination. For more information about the Business Combination, see our Current Report on Form 8-K
filed with the SEC December 15, 2022.
Status of Business Combination
The Merger Agreement is subject to a number of conditions
which must be satisfied or waived in order to complete the Business Combination and the Merger Agreement may be terminated at any time,
even prior to the Extension, under certain customary and limited circumstances, including among other reasons, by the mutual written
consent of GSD and DPLS; (ii) by GSD, subject to certain exceptions, if any of the representations or warranties made by DPLS are not
true and correct or if DPLS fails to perform any of its covenants or agreements under the BCA (including an obligation to consummate
the Closing) such that certain conditions to the obligations of GSD could not be satisfied and the breach (or breaches) of such representations
or warranties or failure (or failures) to perform such covenants or agreements is (or are) not cured or cannot be cured within the earlier
of (A) thirty (30) days after written notice thereof, and (B) August 9, 2023; (iii) by DPLS, subject to certain exceptions, if any of
the representations or warranties made by GSD are not true and correct or if GSD fails to perform any of its covenants or agreements
under the BCA (including an obligation to consummate the Closing) such that the condition to the obligations of DPLS could not be satisfied
and the breach (or breaches) of such representations or warranties or failure (or failures) to perform such covenants or agreements is
(or are) not cured or cannot be cured within the earlier of (A) thirty (30) days after written notice thereof, and (B) the August 9,
2023; (iv) by either GSD or DPLS, if the Closing does not occur on or prior to August 9, 2023, unless the breach of any covenants or
obligations under the BCA by the party seeking to terminate proximately caused the failure to consummate the transactions contemplated
by the BCA; (v) by either GSD or DPLS, if (A) any governmental entity shall have issued an order or taken any other action permanently
enjoining, restraining or otherwise prohibiting the transactions contemplated by the BCA and such order or other action shall have become
final and non-appealable; or (B) if the required DPLS or GSD stockholder consent is not obtained; (vi) by GSD, if (A) DPLS does not deliver,
or cause to be delivered to GSD a Transaction Support Agreement duly executed by certain DPLS stockholders or (B) the DPLS stockholders
meeting has been held, has concluded, the DPLS stockholders have duly voted, and the DPLS stockholder approval was not obtained; (vii)
by DPLS, should GSD not have timely taken such actions as are reasonably necessary to extend the period of time for it to complete an
initial business combination for an additional period of six months from February 9, 2023; provided, that it shall be the obligation
of DPLS to timely make the deposit into the Trust Account in connection with such extension, and the Company shall not have a right to
terminate the BCA as a result of DPLS’ failure to make such deposit; (ix) by GSD should DPLS not deposit into the Trust Account
in a timely manner the funds necessary to extend the period for GSD to complete an initial business combination for an additional period
of six months from February 9, 2023, in accordance with, and as required pursuant to, the BCA; and (x) by GSD should: (A) Nasdaq not
approve the initial listing application for the combined company with Nasdaq in connection with the Business Combination; (B) the combined
company not have satisfied all applicable initial listing requirements of Nasdaq; or (C) the common stock of the combined company not
have been approved for listing on Nasdaq prior to the Closing Date.
Unless extended, the Merger Agreement may be terminated
at any time in accordance with its terms, including by either GSD or DPLS after August 9, 2023 (or after February 9, 2024 if extended
by GSD following the implementation of the Extension), and you may not have the chance to vote on the Business Combination if the Merger
Agreement is terminated beforehand.
The Company will discuss an extension of the Merger
Agreement with the relevant parties if the Extension Amendment Proposal is approved and the Extension is implemented. However, it is
possible that the parties may determine to restructure or renegotiate such arrangements in view of evolving market and regulatory conditions.
Under the terms of the Merger Agreement, DPLS is not required to consummate the Business Combination if the Company does not have at
least $5,000,001 in available cash (including proceeds in connection with any private placement or any other alternative financing arrangement
mutually agreed upon by the parties and prior to giving effect to the payment of unpaid expenses and liabilities) immediately prior to
the consummation of the Business Combination (after taking into account payments required to satisfy redemptions by the Company’s
stockholders). There can be no assurance that we can meet this Minimum Cash Condition or secure an alternative financing transaction
to support the Business Combination, or that we will find an alternative target if we are unable to consummate the Business Combination
with DPLS.
You are not being asked to vote on the Business
Combination at this time. If the Extension is implemented and you do not elect to redeem your public shares, provided that you are a
stockholder on the Record Date for a meeting to consider the Business Combination, you will retain the right to vote on the Business
Combination when it is submitted to stockholders and the right to redeem your public shares for cash in the event the Business Combination
is approved and completed or we have not consummated a business combination with DPLS or any other target by the Extended Date.
THE EXTENSION AMENDMENT PROPOSAL
Background
Our Company
Global System Dynamics, Inc. (fka Gladstone Acquisition
Corporation) (which we refer to as "we", "us" or the "Company") is a blank check company that was incorporated
in January 2021 as a Delaware corporation 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.
While we may pursue an acquisition opportunity in
any business, industry, sector or geographical location, we are focusing on industries that complement our management team’s background,
and we intend to capitalize on the ability of our management team to identify and acquire a business.
Our original Sponsor was Gladstone Sponsor, LLC,
and our original management had expertise in farming and agricultural sectors, including farming related operations and businesses that
support the farming industry.
On October 12, 2022, however, we entered into a Purchase
Agreement with Gladstone Sponsor, and DarkPulse, Inc., a Delaware corporation, pursuant to which DarkPulse, as the new Sponsor, purchased
from Gladstone Sponsor 2,623,120 shares of our Class B Common Stock, and 4,298,496 Private Placement Warrants, each of which is exercisable
to purchase one share of our Class A common stock, for an aggregate purchase price of $1,500,000 (the “Purchase Price”).
In addition to the payment of the Purchase Price,
the New Sponsor also assumed the following obligations: (i) responsibility for all of Company’s public company reporting obligations,
(ii) the right to provide an extension payment and extend the deadline of the Company to complete an initial business combination from
15 months from August 9, 2021 to 18 months for an additional $1,150,000, and (iii) all other obligations and liabilities of our original
Sponsor related to our company.
Also on October 12, 2022, David Gladstone, Terry
L. Brubaker, Paul W. Adelgren, Michela A. English, John H. Outland, Anthony W. Parker, and Walter H. Wilkinson, Jr. tendered their resignations
as officers and directors of the Company, Michael Malesardi, Michael LiCalsi, Bill Frisbie and Bill Reiman resigned as officers of the
Company, and Geoff Mullins, Wayne Bale, and John Bartrum were appointed as members of the board of directors of the Company. Finally,
Rick Iler was appointed as Principal Executive Officer, Chief Financial Officer and Secretary of the Company.
Finally, on October 12, 2022, we filed with the Secretary
of State of the State of Delaware an amendment to our Certificate of Incorporation to change the legal name of the Company from Gladstone
Acquisition Corp. to Global Systems Dynamic, Inc. The Company’s board of directors also has adopted amended and restated By-Laws
of the Company reflecting the name change.
We are a “shell company” as defined under
the Exchange Act because we have no operations and nominal assets consisting almost entirely of cash. We will not generate any operating
revenues until after the completion of our Initial Business Combination, at the earliest. We will generate non-operating income in the
form of interest income on cash and cash equivalents from the proceeds derived from our IPO, described below. To date, our efforts have
been limited to organizational activities and activities related to our initial public offering as well as the search for a prospective
business combination target.
On December 14, 2022, we entered into the Merger
Agreement, which is disclosed in our Current Report on Form 8-K and filed with the SEC on December 15, 2022.
Capitalization, Initial Public Offering and
Initial Business Combination
On January 25, 2021, the original Sponsor paid $25,000,
or approximately $0.009 per share, to cover certain offering costs in consideration for 2,875,000 shares of Class B Common Stock, par
value $0.0001. Up to 375,000 shares of Class B Common Stock were subject to forfeiture to the extent that the over-allotment option was
not exercised in full by the underwriters. The forfeiture would be adjusted to the extent that the over-allotment option was not exercised
in full by the underwriters so that the Class B Common Stock would represent 20% of the Company's issued and outstanding stock after
the Company's IPO.
A registration statement for the Company's IPO was
declared effective on August 4, 2021. On August 9, 2021, the Company consummated its IPO of 10,000,000 units (each, a "Unit"
and collectively, the "Units") at $10.00 per Unit and the sale of 4,200,000 warrants (the "Private Warrants") at
a price of $1.00 per Private Warrant in a private placement to the Sponsor that closed simultaneously with the IPO. Each Unit consists
of one share of Class A Common Stock, par value $0.0001 per share (the "Class A Common Stock" or "public shares")
and one-half of one redeemable warrant (the "Public Warrants"). Each whole Public Warrant entitles the holder thereof to purchase
one share of Class A Common Stock at a price of $11.50 per share, subject to adjustment. Only whole warrants are exercisable. On August
18, 2021, the underwriters partially exercised their over-allotment option and purchased an additional 492,480 Units, generating an aggregate
of gross proceeds of $4,924,800.
Simultaneously with the exercise of the underwriters'
over-allotment option, the Sponsor purchased an additional 98,496 Private Warrants, generating aggregate gross proceeds of $98,496. On
September 18, 2021 the underwriters' over-allotment option expired and as a result 251,880 shares of Class B Common Stock were forfeited,
resulting in outstanding Class B Common Stock of 2,623,120 shares.
We have broad discretion with respect to the specific
application of the net proceeds of the IPO and the Private Warrants, although substantially all of the net proceeds are intended to be
applied generally toward consummating a Business Combination. There is no assurance that we will be able to complete a Business Combination
successfully. We must complete one or more Business Combinations having an aggregate fair market value of at least 80% of the assets
held in the Trust Account (as defined below) (net of amounts disbursed to management for working capital purposes, if permitted, and
excluding the amount of any deferred underwriting commissions) at the time of the agreement to enter into the Initial Business Combination.
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 an interest in the target sufficient for it not to be required to register as an
investment company under the Investment Company Act of 1940, as amended (the "Investment Company Act").
Following the closing of the IPO on August 9, 2021
and the partial over-allotment exercise on August 18, 2021, $107,023,296 ($10.20 per Unit) from the net proceeds sold in the IPO and
over-allotment, including a portion of the proceeds of the sale of the Private Warrants, was deposited in a trust account (the "Trust
Account") which is being invested only in U.S. government securities, with a maturity of 180 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.
Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its tax obligations,
the proceeds from the IPO will not be released from the Trust Account until the earliest to occur of: (a) the completion of the Company's
Business Combination, (b) the redemption of any public shares properly submitted in connection with a stockholder vote to amend the Company's
amended and restated certificate of incorporation to (i) modify the substance or timing of the Company's obligation to provide for the
redemption of its public stock in connection with an Initial Business Combination or to redeem 100% of its public stock if the Company
does not complete its Initial Business Combination within 18 months from the closing of the IPO or (ii) with respect to any other material
provisions relating to stockholders' rights or pre-Initial Business Combination activity, and (c) the redemption of the Company's public
shares if the Company is unable to complete its Initial Business Combination within 18 months from the closing of the IPO, subject to
applicable law.
The Company will provide its public stockholders
with the opportunity to redeem all or a portion of their public shares upon the completion of the Business Combination either (i) in
connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as
to whether the Company will seek stockholder approval of a proposed Business Combination or conduct a tender offer will be made by the
Company, solely in its discretion. The stockholders will be entitled to redeem their shares for a pro rata portion of the amount then
on deposit in the Trust Account (initially approximately $10.20 per share, plus any pro rata interest earned on the funds held in the
Trust Account and not previously released to the Company to pay its tax obligations).
The Deposit to Trust Account, Promissory Note
and Extension to February 9, 2023
On November 2, 2022, we issued a promissory note
(the “Note”) in the aggregate principal amount of $1,150,000 to our new Sponsor, in connection with the extension of the
termination date for our Business Combination from November 9, 2022 to February 9, 2023.
Pursuant to the Note, the Sponsor has agreed to loan
us $1,150,000 to deposit into the Trust Account. The Note bears no interest and is repayable in full upon the earlier of (i) the date
on which the Company consummates a Business Combination, and (ii) the date that the winding up of the Company is effective. At the election
of the Sponsor and subject to certain conditions, all of the unpaid principal amount of the Note may be converted into units of the Company
(the “Conversion Units”) upon consummation of a Business Combination with the total Conversion Units so issued shall be equal
to: (x) the portion of the principal amount of the Note being converted divided by (y) the conversion price of ten dollars ($10.00),
rounded up to the nearest whole number of units.
This additional contribution enabled us to extend
the date by which we have to complete the Business Combination for an initial three-month extension from November 9, 2022 to February
9, 2023. Such contribution effectively increased the pro rata portion of the funds available in our Trust Account in the event of the
consummation of a Business Combination, liquidation, or other redemption event, by $0.11 per share.
If we complete a Business Combination, we will, at
the option of the Sponsor, repay the amount loaned under the Note out of the proceeds of the Trust Account released to us or issue shares
of our Class A common stock in lieu of repayment in accordance with the terms of the Note. If we do not complete a Business Combination
by the Termination Date, we will not repay the amount loaned under the Note until 100% of the public shares have been redeemed and only
in connection with the liquidation of our company to the extent funds are available outside of the Trust Account.
Special Meeting, Deposits to Trust Account, Promissory
Notes and Extension to August 9, 2023
At the special meeting of stockholders held on January
31, 2023, our stockholders voted in favor of an amendment to our amended and restated certificate of incorporation, giving us the right
to extend the February 9, 2023 deadline six times, as needed, for an additional one month each time by depositing into the Trust Account
$0.0625 per public share remaining after redemptions in connection with the approval for each one-month extension, up to August 9, 2023.
We have now extended the deadline up to August 9, 2023, by depositing into the Trust Account for the benefit of the public stockholders
$83,947.13 for each one (1) month extension (or an aggregate of $503,682 since the Combination Period was extended six times).
In connection with the special meeting, stockholders holding 9,149,326 public shares properly exercised their right to redeem their shares
(and did not withdraw their redemption) for cash at a redemption price of approximately $10.42 per share, for an aggregate redemption
amount of approximately $95,356,719. Following such redemptions, approximately $14,128,405 was left in Trust and 1,343,154 public shares
remain outstanding.
On February 7, 2023, March 9, 2023, April
7, 2023, May 5, 2023, June 9, 2023, and July 7, 2023, the Company issued a non-convertible promissory note in the aggregate principal
amount of $503,682 ($83,947 per month) to the New Sponsor, in connection with the extension of the termination date for the Company’s
initial business combination from February 9, 2023 to August 9, 2023.
Pursuant to the promissory notes, the
New Sponsor has agreed to loan to the Company $503,682 to deposit into the Company’s Trust Account. The promissory notes bear no
interest and are repayable in full upon the earlier of (i) the date on which the Company consummates its Initial Business Combination,
and (ii) the date that the winding up of the Company is effective.
The Extension Amendment
The Company is proposing to amend its charter to
extend the date by which the Company has to consummate a Business Combination to the Extended Date.
The Extension Amendment Proposal is required for
the implementation of the Board’s plan to allow the Company more time to complete the Business Combination.
If the Extension Amendment Proposal is not approved,
and we have not consummated the Business Combination by August 9, 2023, we will (i) cease all operations except for the purpose of winding
up, (ii) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully available funds therefor,
redeem 100% of the shares of Class A common stock in consideration of a per-share price, payable in cash, equal to the quotient obtained
by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest (net of taxes payable, less up to $100,000
of such net interest to pay dissolution expenses), by (B) the total number of then outstanding shares of Class A common stock, which
redemption will completely extinguish rights of public stockholders (including the right to receive further liquidating distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of
the remaining stockholders and the Board in accordance with applicable law, dissolve and liquidate, subject in each case to the Company’s
obligations under the DGCL to provide for claims of creditors and other requirements of applicable law.
The Board believes that given our expenditure of
time, effort and money on the Business Combination, circumstances warrant providing public stockholders an opportunity to consider the
Business Combination and that it is in the best interests of our stockholders that we obtain the Extension. The Board believes that the
Business Combination will provide significant benefits to our stockholders. For more information about the Business Combination, see
Company’s Current Report on Form 8-K filed with the SEC December 15, 2022.
A copy of the proposed amendment to the charter of
the Company is attached to this Proxy Statement in Annex A.
Reasons for the Extension Amendment Proposal
The Company’s charter provides that the Company
has until August 9, 2023 to complete the purposes of the Company including, but not limited to, effecting a business combination under
its terms. The purpose of the Extension Amendment is to allow the Company more time to complete its Business Combination.
As previously announced, we entered into the Merger
Agreement on December 14, 2022. Pursuant to the Merger Agreement, the parties agreed, subject to the terms and conditions of the Merger
Agreement, to effect the Business Combination. While we are using our best efforts to complete the Business Combination as soon as practicable,
the Board believes that there will not be sufficient time before the Termination Date to complete the Business Combination. Accordingly,
the Board believes that in order to be able to consummate the Business Combination, we will need to obtain the Extension. Without the
Extension, the Board believes that there is significant risk that we might not, despite our best efforts, be able to complete the Business
Combination on or before August 9, 2023. If that were to occur, we would be precluded from completing the Business Combination and would
be forced to liquidate even if our stockholders are otherwise in favor of consummating the Business Combination.
We have filed with the SEC a registration statement
on Form S-4 on February 14, 2023 including proxy materials in the form of a proxy statement, as amended or supplemented from time to
time, for the purpose of soliciting proxies from the stockholders to vote in favor of the Business Combination Agreement and the other
proposals as set forth therein at a special meeting of the stockholders of the Company and to register certain securities of the Company
with the SEC.
As of the date of this Proxy Statement, the Company
cannot estimate when and if the SEC will declare the Form S-4 effective. There is no assurance that the S-4 will be declared effective.
Additional extensions past the Extended Date may be required, which may subject us and our stockholders to additional risks and contingencies
that would make it more challenging for us to complete the Business Combination or a transaction with an alternative target if we cannot
complete the Business Combination with the Target.
The Company’s IPO prospectus and charter provide
that the affirmative vote of the holders of at least 65% of all outstanding shares of common stock, including the Class A common stock
and Class B Common Stock, is required to extend our corporate existence, except in connection with, and effective upon, consummation
of a business combination. Additionally, our IPO prospectus and charter provide for all public stockholders to have an opportunity to
redeem their public shares in the case our corporate existence is extended as described above. Because we continue to believe that a
business combination would be in the best interests of our stockholders, and because we will not be able to conclude a business combination
within the permitted time period, the Board has determined to seek stockholder approval to extend the date by which we have to complete
a business combination beyond August 9, 2023 to the Extended Date. We intend to hold another stockholder meeting prior to the Extended
Date in order to seek stockholder approval of the Business Combination.
We believe that the foregoing charter provision was
included to protect Company stockholders from having to sustain their investments for an unreasonably long period if the Company failed
to find a suitable business combination in the timeframe contemplated by the charter. We also believe that, given the Company’s
expenditure of time, effort and money on finding a business combination and our entry into the Merger Agreement with respect to the Business
Combination, circumstances warrant providing public stockholders an opportunity to consider the Business Combination.
If the Extension Amendment Proposal is Not
Approved
Stockholder approval of the Extension Amendment is
required for the implementation of our Board’s plan to extend the date by which we must consummate our initial business combination.
Therefore, our Board will abandon and not implement the Extension Amendment unless our stockholders approve the Extension Amendment Proposal.
If the Extension Amendment Proposal is not approved
and a Business Combination is not consummated by August 9, 2023, we will (i) cease all operations except for the purpose of winding up,
(ii) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully available funds therefor,
redeem 100% of the shares of Class A common stock in consideration of a per-share price, payable in cash, equal to the quotient obtained
by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest (net of taxes payable, less up to $100,000
of such net interest to pay dissolution expenses), by (B) the total number of then outstanding shares of Class A common stock, which
redemption will completely extinguish rights of public stockholders (including the right to receive further liquidating distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of
the remaining stockholders and the Board in accordance with applicable law, dissolve and liquidate, subject in each case to the Company’s
obligations under the DGCL to provide for claims of creditors and other requirements of applicable law.
There will be no distribution from the Trust Account
with respect to the Company’s warrants which will expire worthless in the event we wind up. In the event of a liquidation, our
Sponsor will not receive any monies held in the Trust Account as a result of its ownership of the Class B Common Stock, the Private Placement
Warrants or the Note.
If the Extension Amendment Proposal Is Approved
If the Extension Amendment Proposal is approved,
the Company will file an amendment to the charter with the Secretary of State of the State of Delaware in the form set forth in Annex
A hereto to extend the time it has to complete a business combination until the Extended Date. The Company will remain a reporting
company under the Exchange Act and its units, Class A common stock and public warrants will remain publicly traded. The Company will
then continue to work to consummate the Business Combination by the Extended Date.
Notwithstanding stockholder approval of the Extension
Amendment Proposal, our Board will retain the right to abandon and not implement the Extension at any time without any further action
by our stockholders, subject to the terms of the Merger Agreement. We reserve the right at any time to cancel the Special Meeting and
not to submit to our stockholders the Extension Amendment Proposal and implement the Extension Amendment. In the event the Special Meeting
is cancelled and a Business Combination is not consummated by August 9, 2023, we will dissolve and liquidate in accordance with the charter.
You are not being asked to vote on the Business Combination
at this time. If the Extension is implemented and you do not elect to redeem your public shares, provided that you are a stockholder
on the Record Date for a meeting to consider the Business Combination, you will retain the right to vote on the Business Combination
when it is submitted to stockholders and the right to redeem your public shares for cash in the event the Business Combination is approved
and completed or we have not consummated a business combination with DPLS or any other target by the Extended Date.
If the Extension Amendment Proposal is approved,
and the Extension is implemented, the removal of the Withdrawal Amount from the Trust Account in connection with the Election will reduce
the amount held in the Trust Account. The Company cannot predict the amount that will remain in the Trust Account if the Extension Amendment
Proposal is approved, and the amount remaining in the Trust Account may be only a small fraction of the approximately $14,411,751 that
was in the Trust Account as of March 31, 2023, or approximately $14,675,427 expected in the Trust Account at the time of the Special
Meeting. We will not proceed with the Extension if redemptions or repurchases of our public shares cause us to have less than $5,000,001
of net tangible assets following approval of the Extension Amendment Proposal.
Because we have only a limited time to complete
our Business Combination, even if we are able to effect the Extension, our failure to obtain any required regulatory approvals in connection
with the Business Combination, or secure an alternate financing transaction to support the Business Combination with the target, or to
find an alternate target if we are unable to consummated a Business Combination with the target, may require us to liquidate. If
we liquidate, our public shareholders may only receive approximately $10.92 per share, plus any pro rata interest earned on the funds
held in the Trust Account and not previously released to the Company to pay its tax obligations, and our warrants will expire worthless.
This will also cause you to lose any potential investment opportunity in a target company and the chance of realizing future gains on
your investment through any price appreciation in the combined company.
Redemption Rights
If the Extension Amendment Proposal is approved,
and the Extension is implemented, each public stockholder may seek to redeem its public shares at a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable),
divided by the number of then outstanding public shares. Holders of public shares who do not elect to redeem their public shares in connection
with the Extension will retain the right to redeem their public shares in connection with any stockholder vote to approve a proposed
business combination, or if the Company has not consummated a business combination by the Extended Date.
TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST
SUBMIT A REQUEST IN WRITING THAT WE REDEEM YOUR PUBLIC SHARES FOR CASH TO CONTINENTAL STOCK TRANSFER & TRUST COMPANY AT THE ADDRESS
BELOW, AND, AT THE SAME TIME, ENSURE YOUR BANK OR BROKER COMPLIES WITH THE REQUIREMENTS IDENTIFIED ELSEWHERE HEREIN, INCLUDING DELIVERING
YOUR SHARES TO THE TRANSFER AGENT PRIOR TO THE VOTE ON THE EXTENSION AMENDMENT PROPOSAL PRIOR TO 5:00 P.M. EASTERN TIME ON JULY 27, 2023.
In connection with tendering your shares for redemption,
prior to 5:00 p.m. Eastern time on July 27, 2023 (two business days before the Special Meeting), you must elect either to physically
tender your stock certificates to Continental Stock Transfer & Trust Company, 1 State Street Plaza, 30th Floor, New York, New York
10004, Attn: SPAC Redemption Team, spacredemptions@continentalstock.com, or to deliver your shares to the transfer agent electronically
using DTC’s DWAC system, which election would likely be determined based on the manner in which you hold your shares. The requirement
for physical or electronic delivery prior to 5:00 p.m. Eastern time on July 27, 2023 (two business days before the Special Meeting) ensures
that a redeeming holder’s election is irrevocable once the Extension Amendment Proposal is approved. In furtherance of such irrevocable
election, stockholders making the election will not be able to tender their shares after the vote at the Special Meeting.
Through the DWAC system, this electronic delivery
process can be accomplished by the stockholder, whether or not it is a record holder or its shares are held in “street name,”
by contacting the transfer agent or its broker and requesting delivery of its shares through the DWAC system. Delivering shares physically
may take significantly longer. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker,
DTC, and the Company’s transfer agent will need to act together to facilitate this request. 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 and the broker would determine whether or not to pass this cost on to the redeeming
holder. It is the Company’s understanding that stockholders should generally allot at least two weeks to obtain physical certificates
from the transfer agent. The Company does not have any control over this process or over the brokers or DTC, and it may take longer than
two weeks to obtain a physical stock certificate. Such stockholders will have less time to make their investment decision than those
stockholders that deliver their shares through the DWAC system. Stockholders who request physical stock certificates and wish to redeem
may be unable to meet the deadline for tendering their shares before exercising their redemption rights and thus will be unable to redeem
their shares.
Certificates that have not been tendered in accordance
with these procedures prior to 5:00 p.m. Eastern time on July 27, 2023 (two business days before the Special Meeting) will not be redeemed
for cash held in the Trust Account on the redemption date. In the event that a public stockholder tenders its shares and decides prior
to the vote at the Special Meeting that it does not want to redeem its shares, the stockholder may withdraw the tender. If you delivered
your shares for redemption to our transfer agent and decide prior to the vote at the Special Meeting not to redeem your public shares,
you may request that our transfer agent return the shares (physically or electronically). You may make such request by contacting our
transfer agent at the address listed above. In the event that a public stockholder tenders shares and the Extension Amendment Proposal
is not approved, these shares will not be redeemed and the physical certificates representing these shares will be returned to the stockholder
promptly following the determination that the Extension Amendment Proposal will not be approved. The Company anticipates that a public
stockholder who tenders shares for redemption in connection with the vote to approve the Extension Amendment Proposal would receive payment
of the redemption price for such shares soon after the completion of the Extension Amendment. The transfer agent will hold the certificates
of public stockholders that make the election until such shares are redeemed for cash or returned to such stockholders.
If properly demanded, the Company will redeem
each public share for a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including
interest (which interest shall be net of taxes payable), divided by the number of then outstanding public shares. Based upon the current
amount in the Trust Account and the outstanding public shares as of the Record Date, the Company anticipates that the per-share price
at which public shares will be redeemed from cash held in the Trust Account will be approximately $10.92 at the time of the Special Meeting.
The closing price of the Company’s Class A Common Stock on the Record Date was $10.73.
If you exercise your redemption rights, you will
be exchanging your shares of the Company’s Class A common stock for cash and will no longer own the shares. You will be entitled
to receive cash for these shares only if you properly demand redemption and tender your stock certificate(s) to the Company’s transfer
agent prior to 5:00 p.m. Eastern time on July 27, 2023 (two business days before the Special Meeting). The Company anticipates that a
public stockholder who tenders shares for redemption in connection with the vote to approve the Extension Amendment Proposal would receive
payment of the redemption price for such shares soon after the completion of the Extension.
UNITED STATES FEDERAL INCOME
TAX CONSIDERATIONS
The following discussion is a summary of certain
United States federal income tax considerations for holders of our Class A common stock with respect to the exercise of redemption rights
in connection with the approval of the Extension Amendment Proposal. This summary is based upon the Internal Revenue Code of 1986, as
amended, which we refer to as the “Code,” the regulations promulgated by the U.S. Treasury Department, current administrative
interpretations and practices of the Internal Revenue Service, which we refer to as the “IRS,” and judicial decisions, all
as currently in effect and all of which are subject to differing interpretations or to change, possibly with retroactive effect. No assurance
can be given that the IRS would not assert, or that a court would not sustain a position contrary to any of the tax considerations described
below. This summary does not discuss all aspects of United States federal income taxation that may be important to particular investors
in light of their individual circumstances, such as investors subject to special tax rules (e.g., financial institutions, insurance companies,
mutual funds, pension plans, S corporations, broker-dealers, traders in securities that elect mark-to-market treatment, regulated investment
companies, real estate investment trusts, trusts and estates, partnerships and their partners, and tax-exempt organizations (including
private foundations)) and investors that will hold Class A common stock as part of a “straddle,” “hedge,” “conversion,”
“synthetic security,” “constructive ownership transaction,” “constructive sale,” or other integrated
transaction for United States federal income tax purposes, investors subject to the alternative minimum tax provisions of the Code, U.S.
Holders (as defined below) that have a functional currency other than the United States dollar, U.S. expatriates, investors that actually
or constructively own five percent or more of the Class A common stock of the Company, and Non-U.S. Holders (as defined below, and except
as otherwise discussed below), all of whom may be subject to tax rules that differ materially from those summarized below. In addition,
this summary does not discuss any state, local, or non-United States tax considerations, any non-income tax (such as gift or estate tax)
considerations, alternative minimum tax or the Medicare tax. In addition, this summary is limited to investors that hold our Class A
common stock as “capital assets” (generally, property held for investment) under the Code.
If a partnership (including an entity or arrangement
treated as a partnership for United States federal income tax purposes) holds our Class A common stock, the tax treatment of a partner
in such partnership will generally depend upon the status of the partner, the activities of the partnership and certain determinations
made at the partner level. If you are a partner of a partnership holding our Class A common stock, you are urged to consult your tax
advisor regarding the tax consequences of a redemption.
WE URGE HOLDERS OF OUR CLASS A COMMON STOCK CONTEMPLATING
EXERCISE OF THEIR REDEMPTION RIGHTS TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE UNITED STATES FEDERAL, STATE, LOCAL, AND FOREIGN
INCOME AND OTHER TAX CONSEQUENCES THEREOF.
U.S. Federal Income Tax Considerations to U.S.
Holders
This section is addressed to U.S. Holders of our
Class A common stock that elect to have their Class A common stock of the Company redeemed for cash. For purposes of this discussion,
a “U.S. Holder” is a beneficial owner that so redeems its Class A common stock of the Company and is:
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an individual who is a
United States citizen or resident of the United States; |
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a corporation (including
an entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia; |
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an estate the income of
which is includible in gross income for United States federal income tax purposes regardless of its source; or |
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a trust (A) the administration
of which is subject to the primary supervision of a United States court and which has one or more United States persons (within the
meaning of the Code) who have the authority to control all substantial decisions of the trust or (B) that has in effect a valid election
under applicable Treasury regulations to be treated as a United States person. |
Redemption of Class A Common Stock
In the event that a U.S. Holder’s Class A common
stock of the Company is redeemed, the treatment of the transaction for U.S. federal income tax purposes will depend on whether the redemption
qualifies as a sale of the Class A common stock under Section 302 of the Code. Whether the redemption qualifies for sale treatment will
depend largely on the total number of shares of our stock treated as held by the U.S. Holder (including any stock constructively owned
by the U.S. Holder as a result of owning warrants) relative to all of our shares both before and after the redemption. The redemption
of Class A common stock generally will be treated as a sale of the Class A common stock (rather than as a distribution) if the redemption
(i) is “substantially disproportionate” with respect to the U.S. Holder, (ii) results in a “complete termination”
of the U.S. Holder’s interest in us or (iii) is “not essentially equivalent to a dividend” with respect to the U.S.
Holder. These tests are explained more fully below.
In determining whether any of the foregoing tests
are satisfied, a U.S. Holder takes into account not only stock actually owned by the U.S. Holder, but also shares of our stock that are
constructively owned by it. A U.S. Holder may constructively own, in addition to stock owned directly, stock owned by certain related
individuals and entities in which the U.S. Holder has an interest or that have an interest in such U.S. Holder, as well as any stock
the U.S. Holder has a right to acquire by exercise of an option, which would generally include Class A common stock which could be acquired
pursuant to the exercise of the warrants. In order to meet the substantially disproportionate test, the percentage of our outstanding
voting stock actually and constructively owned by the U.S. Holder immediately following the redemption of Class A common stock must,
among other requirements, be less than 80% of our outstanding voting stock actually and constructively owned by the U.S. Holder immediately
before the redemption. There will be a complete termination of a U.S. Holder’s interest if either (i) all of the shares of our
stock actually and constructively owned by the U.S. Holder are redeemed or (ii) all of the shares of our stock actually owned by the
U.S. Holder are redeemed and the U.S. Holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution
of stock owned by certain family members and the U.S. Holder does not constructively own any other stock. The redemption of the Class
A common stock will not be essentially equivalent to a dividend if a U.S. Holder’s conversion results in a “meaningful reduction”
of the U.S. Holder’s proportionate interest in us. Whether the redemption will result in a meaningful reduction in a U.S. Holder’s
proportionate interest in us will depend on the particular facts and circumstances. However, the IRS has indicated in a published ruling
that even a small reduction in the proportionate interest of a small minority stockholder in a publicly held corporation who exercises
no control over corporate affairs may constitute such a “meaningful reduction.”
If none of the foregoing tests are satisfied, then
the redemption will be treated as a distribution and the tax effects will be as described below under “U.S. Federal Income Tax
Considerations to U.S. Holders — Taxation of Distributions.”
U.S. Holders of our Class A common stock considering
exercising their redemption rights should consult their own tax advisors as to whether the redemption of their Class A common stock of
the Company will be treated as a sale or as a distribution under the Code.
Gain or Loss on a Redemption of Class A Common
Stock Treated as a Sale
If the redemption qualifies as a sale of Class A
common stock, a U.S. Holder must treat any gain or loss recognized as capital gain or loss. Any such capital gain or loss will be long-term
capital gain or loss if the U.S. Holder’s holding period for the Class A common stock so disposed of exceeds one year. Generally,
a U.S. Holder will recognize gain or loss in an amount equal to the difference between (i) the amount of cash received in such redemption
(or, if the Class A common stock is held as part of a unit at the time of the disposition, the portion of the amount realized on such
disposition that is allocated to the Class A common stock based upon the then fair market values of the Class A common stock and the
one-half of one warrant included in the unit) and (ii) the U.S. Holder’s adjusted tax basis in its Class A common stock so redeemed.
A U.S. Holder’s adjusted tax basis in its Class A common stock generally will equal the U.S. Holder’s acquisition cost (that
is, the portion of the purchase price of a unit allocated to a share of Class A common stock or the U.S. Holder’s initial basis
for Class A common stock upon exercise of a whole warrant) less any prior distributions treated as a return of capital. Long-term capital
gain realized by a non-corporate U.S. Holder generally will be taxable at a reduced rate. The deduction of capital losses is subject
to limitations.
Taxation of Distributions
If the redemption does not qualify as a sale of Class
A common stock, the U.S. Holder will be treated as receiving a distribution. In general, any distributions to U.S. Holders generally
will constitute dividends for United States federal income tax purposes to the extent paid from our current or accumulated earnings and
profits, as determined under United States federal income tax principles. Distributions in excess of current and accumulated earnings
and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. Holder’s
adjusted tax basis in our Class A common stock. Any remaining excess will be treated as gain realized on the sale or other disposition
of the Class A common stock and will be treated as described under “U.S. Federal Income Tax Considerations to U.S. Holders —
Gain or Loss on a Redemption of Class A Common Stock Treated as a Sale.” Dividends we pay to a U.S. Holder that is a taxable
corporation generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions,
and provided certain holding period requirements are met, dividends we pay to a non-corporate U.S. Holder generally will constitute “qualified
dividends” that will be taxable at a reduced rate.
U.S. Federal Income Tax Considerations to Non-U.S.
Holders
This section is addressed to Non-U.S. Holders of
our Class A common stock that elect to have their Class A common stock of the Company redeemed for cash. For purposes of this discussion,
a “Non-U.S. Holder” is a beneficial owner (other than a partnership) that so redeems its Class A common stock of the Company
and is not a U.S. Holder.
Redemption of Class A Common Stock
The characterization for United States federal income
tax purposes of the redemption of a Non-U.S. Holder’s Class A common stock generally will correspond to the United States federal
income tax characterization of such a redemption of a U.S. Holder’s Class A common stock, as described under “U.S. Federal
Income Tax Considerations to U.S. Holders.”
Non-U.S. Holders of our Class A common stock considering
exercising their redemption rights should consult their own tax advisors as to whether the redemption of their Class A common stock of
the Company will be treated as a sale or as a distribution under the Code.
Gain or Loss on a Redemption of Class A Common
Stock Treated as a Sale
If the redemption qualifies as a sale of Class A
common stock, a Non-U.S. Holder generally will not be subject to United States federal income or withholding tax in respect of gain recognized
on a sale of its Class A common stock of the Company, unless:
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the gain is effectively
connected with the conduct of a trade or business by the Non-U.S. Holder within the United States (and, under certain income tax
treaties, is attributable to a United States permanent establishment or fixed base maintained by the Non-U.S. Holder), in which case
the Non-U.S. Holder will generally be subject to the same treatment as a U.S. Holder with respect to the redemption, and a corporate
Non-U.S. Holder may be subject to the branch profits tax at a 30% rate (or lower rate as may be specified by an applicable income
tax treaty); |
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the Non-U.S. Holder is
an individual who is present in the United States for 183 days or more in the taxable year in which the redemption takes place and
certain other conditions are met, in which case the Non-U.S. Holder will be subject to a 30% tax on the individual’s net capital
gain for the year; or |
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we are or have been a “U.S.
real property holding corporation” for United States federal income tax purposes at any time during the shorter of the five-year
period ending on the date of disposition or the period that the Non-U.S. Holder held our Class A common stock, and, in the case where
shares of our Class A common stock are regularly traded on an established securities market, the Non-U.S. Holder has owned, directly
or constructively, more than 5% of our Class A common stock at any time within the shorter of the five-year period preceding the
disposition or such Non-U.S. Holder’s holding period for the shares of our Class A common stock. We do not believe we are or
have been a U.S. real property holding corporation. |
Taxation of Distributions
If the redemption does not qualify as a sale of Class
A common stock, the Non-U.S. Holder will be treated as receiving a distribution. In general, any distributions we make to a Non-U.S.
Holder of shares of our Class A common stock, to the extent paid out of our current or accumulated earnings and profits (as determined
under United States federal income tax principles), will constitute dividends for U.S. federal income tax purposes and, provided such
dividends are not effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States, we
will be required to withhold tax from the gross amount of the dividend at a rate of 30%, unless such Non-U.S. Holder is eligible for
a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such
reduced rate. Any distribution not constituting a dividend will be treated first as reducing (but not below zero) the Non-U.S. Holder’s
adjusted tax basis in its shares of our Class A common stock and, to the extent such distribution exceeds the Non-U.S. Holder’s
adjusted tax basis, as gain realized from the sale or other disposition of the Class A common stock, which will be treated as described
under “U.S. Federal Income Tax Considerations to Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition
of Class A Common Stock.” Dividends we pay to a Non-U.S. Holder that are effectively connected with such Non-U.S. Holder’s
conduct of a trade or business within the United States generally will not be subject to United States withholding tax, provided such
Non-U.S. Holder complies with certain certification and disclosure requirements. Instead, such dividends generally will be subject to
United States federal income tax, net of certain deductions, at the same graduated individual or corporate rates applicable to U.S. Holders
(subject to an exemption or reduction in such tax as may be provided by an applicable income tax treaty). If the Non-U.S. Holder is a
corporation, dividends that are effectively connected income may also be subject to a “branch profits tax” at a rate of 30%
(or such lower rate as may be specified by an applicable income tax treaty).
Statement Regarding Use of Trust Funds to Pay
Excise Taxes
Except for franchise taxes and income taxes, the
proceeds placed in the trust account and the interest earned thereon shall not be used to pay for possible excise tax or any other fees
or taxes that may be levied on us pursuant to any current, pending or future rules or laws, including without limitation any excise tax
due under the IRA on any redemptions or stock buybacks by us.
As previously noted above, the foregoing discussion
of certain material U.S. federal income tax consequences is included for general information purposes only and is not intended to be,
and should not be construed as, legal or tax advice to any stockholder. We once again urge you to consult with your own tax adviser to
determine the particular tax consequences to you (including the application and effect of any U.S. federal, state, local or foreign income
or other tax laws) of the receipt of cash in exchange for shares in connection with the Extension Amendment Proposal.
THE SPECIAL MEETING
Overview
Date, Time and Place. The Special Meeting
of the Company’s stockholders will be held at 10:00 a.m. Eastern Time on July 31, 2023 as a virtual meeting. You will be able to
attend, vote your shares and submit questions during the Special Meeting via a live webcast available at https://www.cstproxy.com/gsd/2023.
If you plan to attend the virtual online Special Meeting, you will need your 12-digit control number to vote electronically at the Special
Meeting. The meeting will be held virtually over the internet by means of a live audio webcast. Only stockholders who own shares of our
common stock as of the close of business on the Record Date will be entitled to attend the virtual meeting.
To register for the virtual meeting, please follow
these instructions as applicable to the nature of your ownership of our common stock.
If your shares are registered in your name with our
transfer agent and you wish to attend the online-only virtual meeting, go to https://www.cstproxy.com/gsd/2023, enter the control number
you received on your proxy card and click on the “Click here” to preregister for the online meeting link at the top of the
page. Just prior to the start of the meeting you will need to log back into the meeting site using your control number. Pre-registration
is recommended but is not required in order to attend.
Beneficial stockholders who wish to attend the online-only
virtual meeting must obtain a legal proxy by contacting their account representative at the bank, broker, or other nominee that holds
their shares and e-mail a copy (a legible photograph is sufficient) of their legal proxy to proxy@continentalstock.com. Beneficial
stockholders who e-mail a valid legal proxy will be issued a meeting control number that will allow them to register to attend and participate
in the online-only meeting. After contacting our transfer agent a beneficial holder will receive an e-mail prior to the meeting with
a link and instructions for entering the virtual meeting. Beneficial stockholders should contact our transfer agent no later than 72
hours prior to the meeting date.
Stockholders will also have the option to listen
to the Special Meeting by telephone by calling:
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Within the U.S. and Canada:
+1 800-450-7155 (toll-free) |
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Outside of the U.S. and
Canada: +1 857-999-9155 (standard rates apply) |
The passcode for telephone access: 8769128#. You
will not be able to vote or submit questions unless you register for and log in to the Special Meeting webcast as described herein.
Voting Power; Record Date. You will be entitled
to vote or direct votes to be cast at the Special Meeting, if you owned the Company’s Class A common stock at the close of business
on July 5, 2023, the record date for the Special Meeting. You will have one vote per proposal for each share of the Company’s common
stock you owned at that time. The Company’s warrants do not carry voting rights.
Votes Required. Approval of the Extension
Amendment Proposal will require the affirmative vote of holders of at least 65% of the Company’s Class A common stock outstanding
on the Record Date, including the Class B Common Stock. If you do not vote or if you abstain from voting on a proposal, your action will
have the same effect as an “AGAINST” vote. Broker non-votes will have the same effect as “AGAINST” votes.
At the close of business on the Record Date of the
Special Meeting, there were 1,553,004 shares of Class A common stock and 2,623,120 shares of Class B common stock outstanding, each of
which entitles its holder to cast one vote per proposal.
If you do not want the Extension Amendment Proposal
approved, you must abstain, not vote, or vote “AGAINST” the Extension Amendment. You will be entitled to redeem your public
shares for cash in connection with this vote whether or not you vote on the Extension Amendment Proposal so long as you elect to redeem
your public shares for a pro rata portion of the funds available in the Trust Account in connection with the Extension Amendment Proposal.
The Company anticipates that a public stockholder who tenders shares for redemption in connection with the vote to approve the Extension
Amendment Proposal would receive payment of the redemption price for such shares soon after the completion of the Extension Amendment
Proposal.
Proxies; Board Solicitation; Proxy Solicitor.
Your proxy is being solicited by the Board on the proposals being presented to stockholders at the Special Meeting. No recommendation
is being made as to whether you should elect to redeem your public shares. Proxies may be solicited in person or by telephone. If you
grant a proxy, you may still revoke your proxy and vote your shares online at the Special Meeting if you are a holder of record of the
Company’s common stock. You may contact us at: Global System Dynamics, Inc., 740-229-0829; info@gsdxyz.com.
Required Vote
The affirmative vote by holders of at least 65% of
the Company’s outstanding shares of common stock, including the Class B Common Stock, is required to approve the Extension Amendment
Proposal. If the Extension Amendment Proposal is not approved, the Extension Amendment will not be implemented and, if the Business Combination
has not been consummated by August 9, 2023, the Company will be required by its charter to (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 subject to lawfully available funds
therefor, redeem 100% of the shares of Class A common stock in consideration of a per-share price, payable in cash, equal to the quotient
obtained by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest (net of taxes payable, less up
to $100,000 of such net interest to pay dissolution expenses), by (B) the total number of then outstanding shares of Class A common stock,
which redemption will completely extinguish rights of public stockholders (including the right to receive further liquidating distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of
the remaining stockholders and the Board in accordance with applicable law, dissolve and liquidate, subject in each case to the Company’s
obligations under the DGCL to provide for claims of creditors and other requirements of applicable law. Stockholder approval of the Extension
Amendment is required for the implementation of our Board’s plan to extend the date by which we must consummate our initial business
combination. Therefore, our Board will abandon and not implement such amendment unless our stockholders approve the Extension Amendment
Proposal. Notwithstanding stockholder approval of the Extension Amendment Proposal, our Board will retain the right to abandon and not
implement the Extension Amendment at any time without any further action by our stockholders, subject to the terms of the Merger Agreement.
Our Sponsor and all of our directors and officers
are expected to vote any common stock owned by them in favor of the Extension Amendment Proposal. On the Record Date, our Sponsor, directors
and officers beneficially owned and were entitled to vote an aggregate of 2,623,120 shares of Class B Common Stock, representing approximately
63% of the Company’s issued and outstanding shares of common stock. Our Sponsor and our directors and officers do not intend to
purchase shares of Class A common stock in the open market or in privately negotiated transactions in connection with the stockholder
vote on the Extension Amendment.
Interests of our Sponsor, Directors and Officers
When you consider the recommendation of our Board,
you should keep in mind that our Sponsor, executive officers, and members of our Board and special advisors have interests that may be
different from, or in addition to, your interests as a stockholder. These interests include, among other things:
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DarkPulse
is currently the owner of 2,623,120 shares of Class B Common Stock and 4,298,496 Private Placement Warrants, each of which is exercisable
to purchase one share of Class A Common Stock which it purchased for $1,500,000. DarkPulse is currently the Sponsor of our Company.
If an initial business combination, such as the Business Combination, is not completed by August 9, 2023, we will be required to
dissolve and liquidate. In such event, the shares of Class B Common Stock currently held by DarkPulse, which were acquired from our
Original Sponsor will be worthless because DarkPulse has agreed to waive its rights to any liquidation distributions. |
| |
• |
DarkPulse
has loaned us an aggregate amount of $1,552,930, with $1,049,248 in connection with the extension from November 9, 2022 to February
9, 2023, and $503,682 ($83,947 per month) from February 9, 2023 to March 9, 2023, from March 9, 2023 to April 9, 2023, from April
9, 2023 to May 9, 2023, from May 9, 2023 to June 9, 2023, from June 9, 2023 to July 9, 2023 and from July 9, 2023 to August 9, 2023
before we are required to liquidate. Pursuant to the related promissory notes, DarkPulse will only be repaid from the proceeds of
our Business Combination, or if no business combination is consummated, from funds held outside the Trust Account. As a result, if
GSD does not consummate an initial business combination, DarkPulse is at risk of losing the entire amount. |
| |
• |
We
have non-interest-bearing working capital advances due to our Sponsor in the principal amount of $$661,836 as of March 31, 2023.
If GSD completes a Business Combination, the advances would be an intercompany loan between a parent and wholly owned subsidiary.
In the event that a Business Combination does not close, GSD may use a portion of proceeds held outside the Trust Account to repay
the working capital advances but no proceeds held in the Trust Account would be used to repay the working capital loans. |
| |
• |
Our
Sponsor is also the target for acquisition by us as a result of BCA. The Sponsor, as the target, has an interest in completing the
Business Combination as its stockholders stand to benefit from the merger consideration as well seeing that the equity it owns in
our company, and the deposits made to the Trust Account, including recently to extend the date of the business combination to August
9, 2023, as well as deposits required as a result of the Extension Amendment Proposal are put to use in the Business Combination,
and not liquidated and lost in a winding up of our Company. |
| |
• |
If
the Trust Account is liquidated, including in the event we are unable to consummate the Business Combination or an initial business
combination within the required time period, the Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account
are not reduced below $10.20 per Public Share, or such lesser amount per Public Share as is in the Trust Account on the liquidation
date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third-party
vendors or service providers (other than our independent registered public accounting firm) for services rendered or products sold
to us, but only if such target business, vendor or service provider has not executed a waiver of any and all of its rights to seek
access to the Trust Account. |
| |
• |
The
beneficial ownership of DarkPulse’s board of directors and officers of an aggregate of 73,529 shares of DarkPulse’s Series
D Preferred Stock and 100 shares of DarkPulse’s Series A Preferred Stock. The Series D Preferred Stock automatically converts
into DarkPulse’s Common Stock at a ratio 1 share of preferred stock for 2 shares of common stock immediately prior to a change
in control event, such as in the case of the Business Combination. The 100 shares of Series A Preferred Stock automatically converts
into 25% of the Combined Company on a fully diluted basis. |
| |
• |
The
anticipated continuation of Dennis O’Leary, Dr. Anthony Brown, and Carl Eckel, members of DarkPulse’s board of directors,
as directors of DarkPulse following the Merger and Dennis O’Leary, Joseph Catalino (currently DarkPulse’s Chief Strategy
Officer) as directors of GSD following the Merger. |
| |
• |
Richard
J. Iler, our Principal Executive Officer and Chief Financial Officer served as a consultant to DarkPulse from July, 2022 to October,
2022. |
| |
• |
The
exercise of our directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the transaction
may result in a conflict of interest when determining whether such changes or waivers are appropriate and in its stockholders’
best interest. |
| |
• |
If
the Business Combination is completed, Geoff Mullins, Wayne Bale, and John Bartrum will continue as members of the Combined Company’s
board of directors and will be entitled to receive compensation for serving on the Combined Company’s board of directors. |
| |
• |
If
the Business Combination is completed, J. Richard Iler will continue as Chief Financial Officer and will be entitled to receive compensation
for serving as such in the Combined Company. |
The Board’s Reasons for the Extension Amendment
Proposal and Its Recommendation
As discussed below, after careful consideration of
all relevant factors, our Board has determined that the Extension Amendment is in the best interests of the Company and its stockholders.
Our Board has approved and declared advisable adoption of the Extension Amendment Proposal and recommends that you vote “FOR”
such proposal.
Our charter provides that the Company has until August
9, 2023 to complete the purposes of the Company including, but not limited to, effecting a business combination under its terms.
As previously announced, we entered into the Merger
Agreement on December 14, 2022. Pursuant to the Merger Agreement, the parties agreed, subject to the terms and conditions of the Merger
Agreement, to effect the Business Combination. While we are using our best efforts to complete the Business Combination as soon as practicable,
the Board believes that there will not be sufficient time before the Termination Date to complete the Business Combination. Accordingly,
the Board believes that in order to be able to consummate the Business Combination, we will need to obtain the Extension. Without the
Extension, the Board believes that there is significant risk that we might not, despite our best efforts, be able to complete the Business
Combination on or before August 9, 2023. If that were to occur, we would be precluded from completing the Business Combination and would
be forced to liquidate even if our stockholders are otherwise in favor of consummating the Business Combination. For more information
about the Business Combination, see our Current Report on Form 8-K filed with the SEC December 15, 2022.
Our charter states that if the Company’s stockholders
approve an amendment to the Company’s charter that would affect the substance or timing of the Company’s obligation to redeem
100% of the Company’s public shares if it does not complete a business combination before August 9, 2023, the Company will provide
its public stockholders with the opportunity to redeem all or a portion of their public shares upon such approval at a per share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net
of taxes payable), divided by the number of then outstanding public shares. We believe that this charter provision was included to protect
the Company stockholders from having to sustain their investments for an unreasonably long period if the Company failed to find a suitable
business combination in the timeframe contemplated by the charter.
In addition, the Company’s IPO prospectus and
charter provide that the affirmative vote of the holders of at least 65% of all outstanding shares of common stock, including the Class
B Common Stock, is required to extend our corporate existence, except in connection with, and effective upon the consummation of, a business
combination. We believe that, given the Company’s expenditure of time, effort and money on finding a business combination and our
entry into the Merger Agreement with respect to the Business Combination, circumstances warrant providing public stockholders an opportunity
to consider the Business Combination. Because we continue to believe that a Business Combination would be in the best interests of our
stockholders, the Board has determined to seek stockholder approval to extend the date by which we have to complete a business combination
beyond August 9, 2023 to the Extended Date, in the event we cannot consummate the Business Combination by August 9, 2023.
The Company is not asking you to vote on the Business
Combination at this time. If the Extension is implemented and you do not elect to redeem your public shares, you will retain the right
to vote on the Business Combination in the future and the right to redeem your public shares at a per-share price, payable in cash, equal
to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided
by the number of then outstanding public shares, in the event the Business Combination is approved and completed or the Company has not
consummated another business combination by the Extended Date.
After careful consideration of all relevant factors,
the Board determined that the Extension Amendment is in the best interests of the Company and its stockholders.
Recommendation of the Board
Our Board unanimously recommends that our stockholders
vote “FOR” the approval of the Extension Amendment Proposal.
THE ADJOURNMENT PROPOSAL
Overview
The Adjournment Proposal, if adopted, will allow
our Board to adjourn the Special Meeting to a later date or dates to permit further solicitation of proxies. The Adjournment Proposal
will only be presented to our stockholders in the event that there are insufficient votes for, or otherwise in connection with, the approval
of the Extension Amendment Proposal. In no event will our Board adjourn the Special Meeting beyond August 9, 2023.
Consequences if the Adjournment Proposal is Not
Approved
If the Adjournment Proposal is not approved by our
stockholders, our Board may not be able to adjourn the Special Meeting to a later date in the event that there are insufficient votes
for, or otherwise in connection with, the approval of the Extension Amendment Proposal.
Vote Required for Approval
The approval of the Adjournment Proposal requires
the affirmative vote of the majority of the votes cast by stockholders represented in person or by proxy at the Special Meeting. Accordingly,
if a valid quorum is otherwise established, a stockholder’s failure to vote by proxy or online at the Special Meeting will have
no effect on the outcome of any vote on the Adjournment Proposal. Abstentions will be counted in connection with the determination of
whether a valid quorum is established but will have no effect on the outcome of the Adjournment Proposal.
Recommendation of the Board
Our Board unanimously recommends that our stockholders
vote “FOR” the approval of the Adjournment Proposal.
BENEFICIAL OWNERSHIP OF SECURITIES
The following table sets forth information regarding
the beneficial ownership of the Company’s common stock as of the Record Date based on information obtained from the persons named
below, with respect to the beneficial ownership of shares of the Company’s common stock, by:
| |
· |
each person known by us
to be the beneficial owner of more than 5% of our outstanding shares of common stock; |
| |
· |
each of our executive officers
and directors that beneficially owns shares of common stock; and |
| |
· |
all our officers and directors
as a group. |
| |
|
|
|
|
|
|
|
|
|
| |
|
Class
A Common Stock(1) |
|
Class
B Common Stock(2) |
| Name
and Address of Beneficial Owner(2) |
|
Number
of Shares Beneficially Owned |
|
Percent
of Class Beneficially Owned |
|
Number
of Shares Beneficially Owned |
|
|
Percent
of Class Beneficially Owned |
| DarkPulse,
Inc. |
|
— |
|
— |
|
2,623,120
(3) |
|
|
100% |
| Rik
Iler |
|
— |
|
— |
|
— |
|
|
— |
| John
Bartrum |
|
— |
|
— |
|
— |
|
|
— |
| Geoff
Mullins |
|
— |
|
— |
|
— |
|
|
— |
| Wayne
Bale |
|
— |
|
— |
|
— |
|
|
— |
| All
executive officers and directors as a group (4 individuals) |
|
— |
|
— |
|
2,623,120 |
|
|
100% |
| Over
5% Stockholders: |
|
|
|
|
|
|
|
|
|
Saba
Capital Management, L.P.,
405 Lexington Avenue, 58th Floor, New York, New York 10174 |
|
597,960
(4) |
|
38.5% |
|
— |
|
|
— |
Lighthouse
Investment Partners, LLC
3801 PGA Boulevard, Suite 500,
Palm Beach Gardens, FL 33410 |
|
766,557
(5) |
|
49.3% |
|
— |
|
|
— |
Periscope
Capital Inc.
333 Bay Street, Suite 1240,
Toronto, Ontario, Canada M5H 2R2 |
|
753,598
(6) |
|
48.5% |
|
— |
|
|
— |
Shaolin
Capital Management LLC
7610 NE 4th Court, Suite 104
Miami FL 33138 |
|
748,264
(7) |
|
48.1% |
|
— |
|
|
— |
Weiss Asset Management LP
222 Berkeley St., 16th floor
Boston, Massachusetts 02116 |
|
345,415
(8) |
|
22.2% |
|
— |
|
|
— |
Yakira Capital Management, Inc.
1555 Post Road East, Suite 202, Westport, CT 06880 |
|
132,964
(9) |
|
8.5% |
|
— |
|
|
— |
| Atlas Merchant Capital SPAC Fund I LP, 477 Madison
Avenue, 22nd FL New York, NY 10022 |
|
100,000
(10) |
|
7.4% |
|
- |
|
|
- |
| (1) |
This
table is based upon information supplied by officers, directors and principal stockholders. Unless otherwise indicated in the footnotes
to this table and subject to community property laws where applicable, we believe that each of the stockholders named in this table
has sole voting and sole investment power with respect to the shares indicated as beneficially owned. Percentages are determined
in accordance with SEC rules and regulations and are based upon 1,553,004 shares of Class A Common Stock and 2,623,120 shares of
Class B Common Stock outstanding on July 5, 2023. |
| (2) |
Unless
otherwise noted, the business address of each of the following entities or individuals is c/o 815 Walker Street, Ste. 1155 Houston,
TX 77002. |
| (3) |
Represents
2,623,120 shares of Class B Common Stock of the Company. The Class B Common Stock will automatically convert into shares of our Class
A Common Stock on a one-for-one basis, subject to adjustment, at the time of our Initial Business Combination. Dennis O’Leary
is the beneficial owner of DarkPulse, Inc. |
| (4) |
Information
shown is based solely on information reported by the filer on a Schedule 13G/A filed with the SEC on February 14, 2022, in which
Saba Capital Management, L.P. reported that it and its related entities have shared voting and dispositive power over 597,960 shares
of Class A Common Stock. |
| (5) |
Information
shown is based solely on information reported by the filer on a Schedule 13G filed with the SEC on February 14, 2023, in which Lighthouse
Investment Partners, LLC reported that it and its related entities have shared voting and dispositive power over 766,557 shares of
Class A Common Stock. |
| (6) |
Information
shown is based solely on information reported by the filer on a Schedule 13G filed with the SEC on February 13, 2023, in which Periscope
Capital Inc. reported that it has shared voting and dispositive power over 753,598 shares of Class A Common Stock. |
| (7) |
Information
shown is based solely on information reported by the filer on a Schedule 13G filed with the SEC on February 14, 2023, in which Shaolin
Capital Management LLC reported that it has sole voting and dispositive power over 748,264 shares of Class A Common Stock. |
| (8) |
Information
shown is based solely on information reported by the filer on a Schedule 13G/A filed with the SEC on February 10, 2023, in which
Weiss Asset Management LP reported that it and its related entities have shared voting and dispositive power over 345,415 shares
of Class A Common Stock. |
| (9) |
Information
shown is based solely on information reported by the filer on a Schedule 13G/A filed with the SEC on February 13, 2023, in which
Yakira Capital Management, Inc. reported that it and its related entities have shared voting and dispositive power over 132,964 shares
of Class A Common Stock. |
| (10) |
Information
shown is based solely on information reported by the filer on a Schedule 13G filed with the SEC on June 8, 2023, in which Atlas Merchant
Capital SPAC Fund I LP reported that it and its related entities have shared voting and dispositive power over 100,000 shares of
Class A Common Stock. |
STOCKHOLDER PROPOSALS
If the Extension Amendment Proposal is approved,
we anticipate that the special meeting to elect directors and to vote on the business combination will occur sometime after the SEC declares
our S-4 registration statement effective.
Our bylaws provide notice procedures for stockholders
to nominate a person as a director and to propose business to be considered by stockholders at a meeting. Notice of a nomination or proposal
must be delivered to us not later than the close of business on the 90th day nor earlier than the opening of business on the 120th day
before the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the
annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must
be so delivered not earlier than the close of business on the 120th day before the meeting and not later than the later of (x) the close
of business on the 90th day before the meeting or (y) the close of business on the 10th day following the day on which public announcement
of the date of the annual meeting is first made by us. Accordingly, for our special meeting to elect directors, assuming the meeting
is held on or about December 31, 2023, notice of a nomination or proposal must be delivered to us no later than October 2, 2023 and no
earlier than September 2, 2023. Nominations and proposals also must satisfy other requirements set forth in the bylaws. The Chairman
of the Board may refuse to acknowledge the introduction of any stockholder proposal not made in compliance with the foregoing procedures.
If the Extension Amendment Proposal is not approved
and the Company fails to complete a qualifying business combination on or before August 9, 2023, there will be no special meeting in
2023 to elect directors.
HOUSEHOLDING INFORMATION
Unless we have received contrary instructions, we
may send a single copy of this Proxy Statement to any household at which two or more stockholders reside if we believe the stockholders
are members of the same family. This process, known as “householding,” reduces the volume of duplicate information received
at any one household and helps to reduce our expenses. However, if stockholders prefer to receive multiple sets of our disclosure documents
at the same address this year or in future years, the stockholders should follow the instructions described below. Similarly, if an address
is shared with another stockholder and together both of the stockholders would like to receive only a single set of our disclosure documents,
the stockholders should follow these instructions:
| |
· |
If the shares are registered
in the name of the stockholder, the stockholder should contact us at info@dwacspac.com to inform us of his or her
request; or |
| |
· |
If a bank, broker or other
nominee holds the shares, the stockholder should contact the bank, broker or other nominee directly. |
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information
with the SEC as required by the Exchange Act. You can read the Company’s SEC filings, including this Proxy Statement, over the
Internet at the SEC’s website at http://www.sec.gov.
If you would like additional copies of this Proxy
Statement or if you have questions about the proposals to be presented at the Special Meeting, you should contact us at: Global System
Dynamics, Inc., 740-229-0829; info@gsdxyz.com.
You may also obtain these documents by requesting
them via e-mail from the Company at info@dwacspac.com.
If you are a stockholder of the Company and
would like to request documents, please do so by July 27, 2023, in order to receive them before the Special Meeting. If you request
any documents from us, we will mail them to you by first class mail, or another equally prompt means.
ANNEX A
AMENDMENT
TO THE
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
GLOBAL SYSTEM DYNAMICS, INC.
Pursuant to Section 242 of the
Delaware General Corporation Law
GLOBAL SYSTEM DYNAMICS, INC. (the “Corporation”),
a corporation organized and existing under the laws of the State of Delaware, does hereby certify as follows:
| |
1. |
The name of the Corporation is Global System Dynamics,
Inc. The Corporation’s Certificate of Incorporation was filed in the office of the Secretary of State of the State of Delaware
on January 14, 2021 (the “Original Certificate”). An Amended and Restated Certificate of Incorporation was filed in the
office of the Secretary of State of the State of Delaware on August 4, 2021 (the “Amended and Restated Certificate of Incorporation”). |
| |
2. |
This Amendment to the Amended and Restated Certificate
of Incorporation amends the Amended and Restated Certificate of Incorporation of the Corporation. |
| |
3. |
This Amendment to the Amended and Restated Certificate
of Incorporation was duly adopted by the affirmative vote of the holders of 65% of the stock entitled to vote at a meeting of stockholders
in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware (the “DGCL”). |
| |
4. |
The text of Section 9.1(b) of Article IX is hereby
amended and restated to read in full as follows: |
(b) Immediately after
the Offering, a certain amount of the net offering proceeds received by the Corporation in the Offering (including the proceeds of any
exercise of the underwriters’ over-allotment option) and certain other amounts specified in the Corporation’s registration
statement on Form S-1, as initially filed with the U.S. Securities and Exchange Commission (the “SEC”)
on February 9, 2021, as amended (the “Registration Statement”), shall be deposited in a trust account (the
“Trust Account”), established for the benefit of the Public Stockholders (as defined below) pursuant to a trust
agreement described in the Registration Statement. Except for the withdrawal of interest to pay taxes (less up to $100,000 of interest
to pay dissolution expenses), none of the funds held in the Trust Account (including the interest earned on the funds held in the Trust
Account) will be released from the Trust Account until the earliest to occur of (i) the completion of the initial Business Combination,
(ii) the redemption of 100% of the Offering Shares (as defined below) if the Corporation is unable to complete its initial Business
Combination within 24 months (or 30 months, if extended upon request by our Sponsor and through resolution of our Board, as provided
in Section 9.1(c)) from the closing of the Offering (or, if the Office of the Delaware Division of Corporations shall not be open
for business (including filing of corporate documents) on such date the next date upon which the Office of the Delaware Division of Corporations
shall be open (the “Deadline Date”) and (iii) the redemption of shares in connection with a vote seeking
to amend any provisions of this Amended and Restated Certificate (a) to modify the substance or timing of the Corporation’s
obligation to provide for the redemption of the Offering Shares in connection with an initial Business Combination or to redeem 100%
of such shares if the Corporation has not consummated an initial Business Combination by the Deadline Date or (b) with respect to
any other material provisions relating to stockholders’ rights or pre-initial Business Combination activity (as described
in Section 9.7). Holders of shares of Common Stock included as part of the units sold in the Offering (the “Offering
Shares”) (whether such Offering Shares were purchased in the Offering or in the secondary market following the Offering
and whether or not such holders are the Sponsor or officers or directors of the Corporation, or affiliates of any of the foregoing) are
referred to herein as “Public Stockholders.”
| |
5. |
The text of Section 9.1(c) of Article IX is hereby
amended and restated to read in full as follows: |
(c) In the event
that the Corporation has not consummated an initial Business Combination within 24 months from the date of the closing of the Offering,
upon the Sponsor’s request, the Corporation may extend the period of time to consummate a Business Combination by an additional
six months, provided that the Sponsor (or its affiliates or permitted designees) will deposit into the Trust Account of $0.0625 per public
share remaining after redemptions in connection with the approval of this Amendment for each such one-month extension until
February 9, 2024, unless (i) the Closing of the Company’s initial Business Combination shall have occurred for such extension
in exchange for a non-interest bearing, unsecured promissory note payable upon consummation of a Business Combination, and
(ii) the procedures relating to any such extension, as set forth in the Trust Agreement, shall have been complied with. The gross
proceeds from the issuance of such promissory note(s) shall be held in the Trust Account and used to fund the redemption of the Offering
Shares in accordance with Section 9.2.
IN WITNESS WHEREOF, Global System Dynamics, Inc. has caused this
Amendment to the Amended and Restated Certificate to be duly executed in its name and on its behalf by an authorized officer as of this
day of [*], 2023.
GLOBAL SYSTEM DYNAMICS, INC.
| |
|
|
| By: |
|
|
| Name: |
|
J.
Richard Iler |
| Title: |
|
Principal
Executive Officer and Chief Financial Officer |
YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.
Vote by Internet -
QUICK ♦♦♦ EASY
IMMEDIATE -
24 Hours a Day, 7 Days a Week or by Mail
| GLOBAL SYSTEM
DYNAMICS, INC. |
|
Your Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed
and returned your proxy card. Votes submitted electronically over the Internet must be received by 11:59 p.m., Eastern Time, on July
30, 2023. |
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|
|
|
|
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|
|
 |
INTERNET – |
| |
|
|
|
www.cstproxyvote.com |
| |
|
|
|
|
| |
|
|
|
Use the Internet to vote your proxy. Have your proxy card available when you access the above website. Follow the prompts to
vote your shares. |
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|
|
|
|
| |
|
|
 |
Vote at the Meeting – |
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|
|
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|
| |
|
|
|
If you plan to attend the virtual online special meeting, you will need your 12 digit control number to vote electronically at
the special meeting. To attend: https://www.cstproxy.com/gsd/2023 |
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|
|
|
|
| |
|
|
 |
MAIL – Mark, sign and date your proxy card and return it in the postage-paid envelope provided. |
PLEASE DO NOT RETURN THE PROXY CARD
IF YOU ARE VOTING ELECTRONICALLY |
|
|
|
| |
|
| ♦ FOLD
HERE • DO NOT SEPARATE • INSERT IN ENVELOPE PROVIDED ♦ |
| PROXY CARD |
|
|
|
|
| THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL PROPOSALS. |
Please mark your votes like this |
☒ |
| Proposal
1 — Extension Amendment Proposal Amend the Company’s amended and restated certificate of incorporation to extend,
upon the request of DarkPulse, Inc. and approval by the Company’s Board
of Directors, the period of time for the Company to complete a business combination up to six times, each by an additional month,
for an aggregate of six additional months (i.e. from August 9, 2023 to February 9, 2023) or such earlier date as determined by the
Board of Directors, which we refer to as the “Extension Amendment Proposal.” |
FOR AGAINST ABSTAIN
|
|
PLEASE SIGN, DATE
AND RETURN THE PROXY IN THE ENVELOPE ENCLOSED TO CONTINENTAL STOCK TRANSFER & TRUST COMPANY. THIS PROXY WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED “FOR” THE PROPOSAL SET FORTH IN PROPOSAL 1, “FOR” THE PROPOSAL SET FORTH
IN PROPOSAL 2, IF SUCH PROPOSAL IS PRESENTED AT THE SPECIAL MEETING. THIS PROXY WILL REVOKE ALL PRIOR PROXIES SIGNED BY YOU.
|
| |
|
|
|
Proposal
2 — Adjournment Proposal
Approve
the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies
in the event that there are insufficient votes for, or otherwise in connection
with, the approval of the Extension Amendment Proposal, which we refer to as the “Adjournment Proposal.” |
FOR AGAINST ABSTAIN
|
|
|
| |
|
|
|
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|
|
|
CONTROL NUMBER |
| |
|
|
|
|
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|
|
|
Signature__________________________Signature,
if held jointly ____________________________________________Date , 2023
Signature should agree with
name printed hereon. If stock is held in the name of more than one person, EACH joint owner should sign. Executors, administrators, trustees,
guardians, and attorneys should indicate the capacity in which they sign. Attorneys should submit powers of attorney.
GLOBAL SYSTEM DYNAMICS, INC.
815 Walker Street
Suite 1155
Houston, TX 77002
SPECIAL MEETING OF STOCKHOLDERS
July 31, 2023
YOUR VOTE IS IMPORTANT
Important Notice Regarding
the Availability of Proxy Materials
for the Special Meeting
of Stockholders to be held on July 31, 2023:
This notice of meeting
and
the accompanying proxy
statement
are available at https://www.cstproxy.com/gsd/2023
♦ FOLD
HERE • DO NOT SEPARATE • INSERT IN ENVELOPE PROVIDED ♦
GLOBAL SYSTEM DYNAMICS, INC.
THIS PROXY IS SOLICITED BY
THE BOARD OF DIRECTORS
FOR THE SPECIAL
MEETING OF STOCKHOLDERS TO BE HELD ON JULY 31, 2023
The undersigned, revoking
any previous proxies relating to these shares, hereby acknowledges receipt of the Notice dated July 17, 2023 and Proxy Statement, dated
July 17, 2023, in connection with the special meeting to be held at 10 a.m. Eastern Time on July 31, 2023 as a virtual meeting (the “Special
Meeting”) for the sole purpose of considering and voting upon the following proposals, and hereby appoints Rick Iler (with full
power to act alone), the attorney and proxy of the undersigned, with full power of substitution to vote all shares of the common stock
of the Company registered in the name provided, which the undersigned is entitled to vote at the Special Meeting and at any adjournments
thereof, with all the powers the undersigned would have if personally present. Without limiting the general authorization hereby given,
said proxy is instructed to vote or act as follows on the proposals set forth in the accompanying Proxy Statement.
THIS PROXY, WHEN
EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” THE EXTENSION
AMENDMENT PROPOSAL (PROPOSAL 1), AND “FOR” THE ADJOURNMENT PROPOSAL (PROPOSAL 2), IF PRESENTED.
(Continued and to
be marked, dated and signed on reverse side)
Global Systems Dynamics (NASDAQ:GSDWU)
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