Introduction
We are a blank check company
incorporated on April 23, 2021 as a Cayman Islands exempted company and formed for the purpose of effecting a merger, amalgamation, share
exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities.
In July 2021, our Sponsor
paid $25,000, or approximately $0.009 per share, to cover certain expenses on our behalf in consideration of 2,875,000 Class B ordinary
shares, par value $0.0001 (the “Founder Shares”). The per share price of the Founder Shares was determined by dividing the
amount contributed to us by the number of Founder Shares issued. We have also issued to EarlyBirdCapital, Inc. (“EarlyBirdCapital”)
and its designees an aggregate of 200,000 Class A ordinary shares, par value $0.0001 (the “EBC Founder Shares”) for nominal
consideration.
On the IPO Closing Date, we
consummated our Initial Public Offering of 10,000,000 units (the “units”). Each unit consists of one public share, one half
of one public warrant (as defined below) and one public right (as defined below). Each whole warrant (a “public warrant”)
entitles the holder thereof to purchase one of our Class A ordinary shares at a price of $11.50 per share, subject to adjustment, and
only whole warrants are exercisable. Each public right (a “public right”) entitles its holder to receive one-tenth of one
Class A ordinary share upon the completion of a business combination. On February 8, 2022, we issued an additional 1,500,000 units in
connection with the closing of the underwriters’ full exercise of their over-allotment option (the “Over-Allotment Option”).
The units were sold at a price of $10.00 per unit, generating aggregate gross proceeds to us from the Initial Public Offering and the
Over-Allotment Option of approximately $115.0 million.
On the IPO Closing Date, we
completed the private sale of 500,000 private placement units (as defined below) at a price of $10.00 per unit. Each private placement
unit (a “private placement unit”) consists of one Class A ordinary share (a “private share”), one-half of one
private placement warrant (as defined below) and one private right (as defined below). Each whole private placement warrant (the “private
placement warrants” and, together with the public warrants, the “warrants”) entitles the holder thereof to purchase
one of our Class A ordinary shares at a price of $11.50 per share, subject to adjustment, and only whole warrants are exercisable. The
private placement warrants (including the Class A ordinary shares issuable upon exercise thereof) may not, subject to certain limited
exceptions, be transferred, assigned or sold by the holder until 30 days after the completion of our business combination. Each private
right (a “private right” and, together with the public rights, the “rights”) entitles its holder to receive one-tenth
of one Class A ordinary share upon the completion of a business combination. Of the 500,000 private placement units sold, 450,000 were
purchased by our Sponsor and 50,000 were purchased by EarlyBirdCapital. On February 8, 2022, we completed the private sale of an additional
45,000 private placement units in connection with the closing of the Over-Allotment Option. Of these additional 45,000 private placement
units, 40,500 were purchased by our Sponsor and 4,500 were purchased by EarlyBirdCapital. In total, the sales of private placement units
in connection with our Initial Public Offering and the Over-Allotment Option generated aggregate gross proceeds to us of $5.5 million.
The warrants will become exercisable
30 days after the completion of our business combination; provided that we have an effective registration statement under the Securities
Act of 1933, as amended (the “Securities Act”) covering the issuance of the Class A ordinary shares issuable upon exercise
of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration
under the securities, or blue sky, laws of the state of residence of the holder (or we permit holders to exercise their public warrants
on a cashless basis under the circumstances specified in the warrant agreements), and will expire five years after the completion of our
business combination or earlier upon redemption or liquidation.
Approximately $116.2 million
of the net proceeds from our Initial Public Offering, the Over-Allotment Option and the sale of the private placement units in connection
with our Initial Public Offering and the Over-Allotment Option has been deposited in a trust account established for the benefit of our
public shareholders (the “Trust Account”). The amount to be distributed to public shareholders who redeem their public shares
will not be reduced by the cash fee of approximately $4.0 million payable to EarlyBirdCapital (the “Business Combination Marketing
Fee”) for services which include assisting us in holding meetings with our shareholders to discuss the potential business combination
and the target business’ attributes, introducing us to potential investors that are interested in purchasing our securities in connection
with our business combination and assisting us with our press releases and public filings in connection with the business combination.
We have also agreed to pay EarlyBirdCapital a cash fee in an amount equal to 1.0% of the total consideration payable in the business combination
if it introduces us to the target business with whom we complete our business combination. Of the gross proceeds from our Initial Public
Offering, the Over-Allotment Option and the sale of the private placement units in connection with our Initial Public Offering and the
Over-Allotment Option that were not deposited in the Trust Account, approximately $2.3 million was used to pay underwriting discounts
and commissions in connection with our Initial Public Offering and the balance was reserved to pay accrued offering and formation costs,
business, legal and accounting due diligence expenses on prospective acquisitions and continuing general and administrative expenses.
The Founder Shares that we
issued prior to the IPO Closing Date will automatically convert into Class A ordinary shares at the time of our business combination on
a one-for-one basis, subject to adjustment for share sub-division, share dividends, reorganizations, recapitalizations and the like. In
the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts sold
in our Initial Public Offering and related to the closing of the business combination, the ratio at which the Founder Shares will convert
into Class A ordinary shares will be adjusted (unless the holders of a majority of the outstanding Founder Shares agree to waive such
adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion
of all issued and outstanding Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number
of all ordinary shares outstanding upon the completion of our Initial Public Offering plus all Class A ordinary shares and equity-linked
securities issued or deemed issued in connection with the business combination (excluding any shares or equity-linked securities issued,
or to be issued, to any seller in the business combination).
On March 1, 2022, we announced
that, commencing on March 3, 2022, holders of the units sold in our Initial Public Offering and the Over-Allotment Option may elect to
separately trade the public shares, public warrants and public rights included in the units. The public shares, public warrants and public
rights that are separated trade on The Nasdaq Global Market (“Nasdaq”) under the symbols “KYCH,” “KYCHW”
and “KYCHR” respectively. Those units not separated will continue to trade on Nasdaq under the symbol “KYCHU.”
Our Company
Keyarch Acquisition Corporation is
a newly incorporated blank check company incorporated as a Cayman Islands exempted company on April 23, 2021 for the purpose of effecting
a merger, share exchange, asset acquisition, share purchase, re-organization, or similar business combination with one or more businesses
or entities, which we refer to throughout this Annual Report as our business combination. We have not selected any specific business combination
target, and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business
combination target with respect to a business combination with us.
While we may pursue a business combination
target in any business or industry, we intend to target global disruptive technology and innovative services companies. Innovation has
been a major driving force in the global economy. In areas such as artificial intelligence, autonomous driving and advanced manufacturing,
innovative technology and services companies are changing the competitive space of existing industries and creating new industries at
a record pace. For example, Level 4 autonomous driving is expected to become a reality in the next few years as a result of innovations
such as remote sensing methods like Lidar (light detection and radar) and other AI technologies; and 3D printing technologies are transforming
traditional manufacturing from mass production to mass customization. Innovative companies such as Tesla and Luminar have been growing
significantly faster than companies in traditional industries, rewarding investors who have recognized the vision and conviction of such
companies. Looking ahead, we expect disruptive technology and innovative services businesses to play even bigger roles in driving the
global economy. Investors who have the expertise to find and evaluate such opportunities will continue to benefit from the trend.
While we may target disruptive technology
and innovative services companies anywhere in the world, we intend to focus on companies in developed economies such as the U.S. and Israel,
and Southeast Asia. However, our amended and restated memorandum and articles of association provides that we shall not undertake our
business combination with any entity that is based in, located in or with its principal business operations in China (including Hong Kong
and Macau). Developed economies such as the U.S. have been dominating in disruptive technology and services business innovations. Major
breakthroughs in last several decades such as the internet, semiconductors, e-commerce, autonomous driving, electric cars, artificial
intelligence and 3D printing all originated in the U.S. In addition to access to mature capital markets to fund innovations, developed
countries such as the U.S. enjoy a vast talent pool and a long-established culture of entrepreneurships. They also have one of the largest
markets to reward innovations once such innovations achieve commercial production. Going forward, we believe that countries such as the
U.S. will continue to lead innovations and provide great opportunities for investors to take advantage of the trend.
Southeast Asia is another region
we intend to target for acquisition opportunities. Driven by factors such as a stable political environment, attractive demographics and
solid talent pool, Southeast Asian countries have seen accelerating growth in innovative technology and services. For example, companies
such as Sea Limited, which is based in Singapore, and engages in the digital entertainment, e-commerce, and digital financial service
businesses in Southeast Asia, Latin America, and internationally, have established themselves as regional and potentially global leaders
in their specific industries. They have shown strong innovative capabilities on the same level as companies based in the U.S. and China.
We are confident that the expertise
and capabilities of our management team will enable us to identify companies that can best capture such opportunities and create long-term
value for our shareholders. Our team has successfully invested in disruptive technologies and innovative services companies in developed
economies such as the U.S. and Israel. We believe our sourcing and industry expertise will continue to enable us to find significant business
combination opportunities that will deliver substantial value to shareholders in the public markets.
Our Team
Several members of our management team are affiliated
with Keywise, including our chairman, who is the Founder, Managing Partner, and the Chief Investment Officer of Keywise, and our CEO,
who is a Managing Partner and has been with Keywise for more than 10 years. We intend to utilize Keywise’s experience and expertise
to help us identify quality target opportunities.
Keywise is a leading alternative investment management
firm with offices in Hong Kong, Beijing, and Shanghai. Keywise has been managing investments for global prominent financial institutions
such as sovereign wealth funds, pensions, endowments and family offices for over 15 years. Keywise is fully licensed in Hong Kong and
mainland China for investment management and is also a registered investment adviser with the SEC. Keywise employs a bottom-up fundamental
approach to investments, generating investment ideas through top-down sector screening, extensive industry contacts and proprietary in-house
research. This investment process includes on-site visits of targeted companies, channel check with suppliers and clients, verification
with competitors and industry experts, extensive due diligence on management teams, and valuation using our internal proprietary models.
Since inception, Keywise has established a strong track record in both public and private market investments. Leveraging its reputation
and an experienced investment team, Keywise has invested in a number of private companies with disruptive technology and innovative services
both in China and globally including Luminar — a leading LiDAR company in Silicon Valley; Carbon 3D — a
leading 3D printing technology company in Silicon Valley; Zoox — a pioneer autonomous driving company in Silicon Valley;
and Xjet — a leading 3D printing company in Israel.
Our management team is led by Mr. Fang Zheng, who
is based in Hong Kong, Dr. Kai Xiong, who is based in Hong Kong and the U.S. and Dr. Jing Lu, who is based in the U.S. They have decades
of experience in investing in and building companies. Our independent directors, Mr. Mark Taborsky and Mr. Doug Rothschild, who are based
in the U.S. and Dr. Mei Han, who is based in Singapore, will also provide additional insights into our target sectors and extensive experience
in investing in the U.S., Southeast Asia and globally.
Mr. Fang Zheng, our Founder and Chairman, is the
Founder, Managing Director and the CIO of Keywise. In his career, Mr. Zheng has been applying an institutional approach to investment,
with a focus on information technology and services industries. He has developed deep insights and built strong industry connections in
the global markets. Before Keywise, Mr. Zheng was a co-founder and portfolio manager at Neon Liberty Capital Management, an asset management
firm based in New York City, investing in the Greater China markets on behalf of institutional investors in the U.S. Prior to co-founding
Neon Liberty in 2002, Mr. Zheng was a Vice President and portfolio manager at the JP Morgan’s Emerging Market Equity Group. Mr.
Zheng was responsible for the team’s investment strategy in the Asian small cap markets. An employee of JP Morgan for more than
six years, Mr. Zheng began as an equity research analyst in Singapore, covering the financial and property sectors. Prior to joining JP
Morgan, Mr. Zheng worked at the Ministry of Machinery and Electronics Industries and CITIC in China, and Rockefeller & Co., Inc. in
New York as an equity analyst. Mr. Zheng holds a BA degree from the University of International Business & Economics in Beijing and
an MBA from Harvard Business School and is a CFA charter holder. Mr. Zheng is a native of China and speaks Mandarin. Mr. Zheng holds a
Hong Kong special administrative region passport and resides in Hong Kong.
Dr. Kai Xiong, our Chief Executive Officer and
director, has more than two decades of experience in investments, risk management, marketing and operations in the financial services
industry. Dr. Xiong joined Keywise in 2010 and is currently a Managing Partner, responsible for multiple management functions, including
capital market deal sourcing, management due diligence, new business development, regulatory policy assessment, investor relations, and
personnel and culture development within the firm, splitting his time among Hong Kong, Beijing and the U.S. Dr. Xiong works closely with
Mr. Zheng in the daily management of the firm and building a strong culture for the firm’s long-term success. Prior to joining Keywise,
Dr. Xiong worked in New York City as a Senior Vice President at Citigroup, a Senior Director at E*Trade, and a Vice President at JPMorgan
Chase for more than over 10 years combined, responsible for developing risk management, marketing and sales strategies for various financial
products using advanced quantitative methodology and statistical modeling. Before moving to the United States, Dr. Xiong worked at National
Development and Reform Commission of China (NDRC) in Beijing for five years. Dr. Xiong holds a B.A. in Economics from Peking University,
an MBA from Columbia University, and a Ph.D. in Economics from State University of New York at Buffalo. He is a native of China and speaks
Mandarin. Dr. Xiong is a U.S. permanent resident with a Hong Kong special administrative region passport residing in the United States
and in Hong Kong.
Dr. Jing Lu, our Chief Financial Officer, has
more than 20 years of experience in the financial service industry. Dr. Lu has served as a Managing Director and then Chief
Operating Officer of China Bridge Capital USA, a PE/VC investment advisory company specialized in innovative technologies from 2017
to 2019 and then from 2021 to 2022. She also served as Chief Investment Officer for the New Hope Fertility Center (NHFC) from 2019
to 2021, sourcing and managing PE investments, bank loans and government PPP loans. Prior to China Bridge Capital, Dr. Lu was
President of ACE AV Consulting Inc. from 2005 to 2017. Dr. Lu was an Executive Director at CIBC World Markets in 2001 working on
corporate securities. Between 1998 and 2001, Dr. Lu worked at the Federal Reserve Bank of New York as a bank regulator and
supervisor, working on Basel Capital Accords as well as examining banks’ implementation of the Basel Accords. Before moving to
New York, Dr. Lu was a professor of economics at York University in Canada for four years, specializing her teaching and research in
Macroeconomics, Institutional Economics, and Econometrics. Dr. Lu holds Ph.D. and M.A. in Economics from Western University in
Canada, Graduate Certificate in Economics from People’s University in China, and B.A in World Economy from Fudan University in
China. Dr. Lu is a U.S. citizen and resident of the State of New York.
Mr. Mark Taborsky, one of our independent directors,
is the founder and managing partner of MarkerTree Capital, an investment firm he started in 2016 specializing in creating and managing
custom and thematic investment portfolios for institutional investors. Mr. Taborsky has over 25 years of investment experience as a senior
investment professional, most recently at Stanford Management Company,
Harvard Management Company, PIMCO, and BlackRock. At BlackRock, from 2011 to 2016, he was a Managing Director and the CIO for global asset
allocation clients in the US and Asia. At PIMCO, from 2008 to 2011, he led the successful buildout of its liquid asset allocation strategy.
At Harvard Management Company, from 2006 to 2008, he was a Managing Director and head of external investments. At Stanford Management
Company, from 2001 to 2006, he was a Managing Director and oversaw the absolute return and fixed income portfolios and internal trading.
He was also their first CFO. Mr. Taborsky is a CFA charter holder. Mr. Taborsky holds an MBA in Finance and Policy with honors from The
University of Chicago Booth School of Business and a B.Comm. in Joint Honors Economics and Finance with first-class honors from McGill
University. He is a U.S. citizen and is a resident of the Commonwealth of Massachusetts.
Mr. Doug Rothschild, one of our independent directors,
is a portfolio manager at Scoggin Management LP, a privately owned hedge fund sponsor, assisting in the management of its investment portfolio.
Since joining Scoggin Management in 2002, he has focused on analyzing and investing in both public and private securities across all asset
sectors. Mr. Rothschild was a senior advisor for MTech Acquisition Corp. from 2018 to 2019. Prior to joining Scoggin Management, Mr. Rothschild
was an associate in the asset management group of Goldman Sachs from 1997 to 2002, where he focused on the real estate, lodging and gaming
sectors. Mr. Rothschild is an active supporter of various charities specifically Sinai Schools for children with special needs, where
he previously served as a Board Member and on the Executive Committee. Mr. Rothschild received a B.A. in Finance from the Sy Syms School
of Business at Yeshiva University. He is a CFA charter holder. Mr. Rothschild is a U.S. citizen and is a resident of the State of New
Jersey.
Dr. Mei Han, one of our independent directors,
is an experienced business professional, with a successful 27 years career in global investment and wealth management. For 20 years, Dr.
Han held various senior management roles with Capital Group, one of the world’s largest investment management firms with assets
under management of USD2 trillion as of December 31, 2020, including Managing Director for Strategic Solutions. She was responsible for
business development and strategic partnerships in major Asian markets, helping clients design strategic solutions and asset allocation
recommendations. The key clients were sovereign wealth funds, central banks, pension funds, insurance companies, large commercial banks
and securities companies. Dr. Han was a founding member of Capital Group’s China Committee and was one of the key members who planned
and organized the opening of Capital Group’s representative office in Beijing in 2009. She was also the leader of Capital Group’s
Asian Women Leadership Program. Since leaving Capital Group in 2017, Dr. Han has been advising and assisting several industry leading
firms from China and Singapore, including Ucommune (co-working) and MCP Payment (digital payment), mainly on strategy, business network
building and fund raising. Dr. Han is an independent director of Ucommune International Ltd. (Nasdaq: UK), the largest co-working company
in China. Dr. Han holds a Bachelor Degree of Law from Peking University, an MBA degree from European University (now the EU Business School),
and a Ph.D. in Business Administration from University of South Australia. Dr. Han is a citizen and resident of the Commonwealth of Singapore.
We believe that our management team’s significant
investment and transaction experience, combined with their strong relationships, give us key competitive strengths in the following areas:
| · | Deep industry insights: investment expertise to understand technology trends and evaluate market potential of disruptive innovations
in sectors we intend to focus on. |
| · | Strong sourcing capabilities: broad network and relationships providing access to acquisition opportunities globally. |
| · | Established research process: research methodology developed across multiple cycles and to generate returns consistently. |
| · | Long-term value creation: strong track record in collaborating with target management teams, forming strategic partnerships to enhance
value for shareholders. |
| · | Execution and structuring capabilities: experience in both public and private markets in structuring and executing complicated deals
with key stakeholders and service providers. |
We believe that our team will add significant
value to target companies. They have a strong track record in helping companies grow, and we believe this will give us a competitive edge
when negotiating and structuring fair terms in a transaction with a target business. We intend to add value to target companies through
engagement in multiple areas:
| · | Strategic advice: leverage our deep industry insights, broad industry and transaction expertise and extensive network to provide strategic
advice for the target’s organic growth and acquisitions. |
| · | Talent enhancement: identify and recruit management talent to support the target’s long-term success. |
| · | Geographic expansion: leverage our global network and relationships to help the target to expand beyond their initial and home markets. |
| · | Partnership expansion: leverage our industry know-how and broad reach to help create new strategic partnerships and collaborations. |
| · | Enabling capital market access: help optimize capital structure and secure funding from reputable investors and lenders for the target. |
Permission Required from the Chinese Authorities to Operate and
for a Business Combination
As a Cayman Islands company with no operations
or subsidiaries in China and expected to conduct a target search outside of China, we are not required to obtain permission from any Chinese
authorities to operate nor have we been contacted by any Chinese authorities in connection with our operations, and we do not expect that
permission will be required from the Chinese authorities in the future in connection our business combination since our amended and restated
memorandum and articles of association forbids us from undertaking our business combination with any entity that is based in, located
in or with its principal business operations in China.
Initial Business Combination
We have until 18 months from the IPO Closing Date, or such later time as our shareholders may
approve in accordance with our articles of association, to consummate our business combination. If we are unable to consummate our business
combination within the applicable time period, we will, as promptly as reasonably possible but not more than five business days thereafter,
redeem the public shares for a pro rata portion of the funds held in the Trust Account and as promptly as reasonably possible following
such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in
each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
In such event, the warrants will be worthless.
Nasdaq rules provide that our business combination
must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account
(less any taxes payable on interest earned) at the time of our signing a definitive agreement in connection with our business combination.
If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion
from an independent investment banking firm or another independent firm that commonly renders valuation opinions with respect to the satisfaction
of such criteria. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the
post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of
the 80% fair market value test. If the business combination involves more than one target business, the 80% fair market value test will
be based on the aggregate value of all of the target businesses. If our securities are not listed on Nasdaq, we would not be required
to satisfy the 80% requirement. However, we intend to satisfy the 80% requirement even if our securities are not listed on Nasdaq at the
time of our business combination.
We anticipate structuring our business combination
so that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets
of the target business or businesses. We may, however, structure our business combination such that the post-transaction company owns
or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management
team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or
acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient
for it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company
owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively
own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination
transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the
outstanding capital stock, shares or other equity securities of a target. In this case, we would acquire a 100% controlling interest in
the target.
However, as a result of the issuance of a substantial
number of new shares, our shareholders immediately prior to our business combination could own less than a majority of our issued and
outstanding shares subsequent to our business combination.
We are not prohibited from pursuing a business
combination with a company that is affiliated with our initial shareholders, officers or directors. In the event we seek to complete our
business combination with a company that is affiliated with our initial shareholders, officers or directors, we, or a committee of independent
directors, will obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation
opinions that our business combination is fair to our company (or shareholders) from a financial point of view.
Members of our management team and our
independent directors and their affiliates directly or indirectly own ordinary shares and private placement units, and, accordingly,
may have a conflict of interest in determining whether a particular target business is an appropriate business with which to
effectuate our business combination. Further, each of our officers and directors may have a conflict of interest with respect to
evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a
target business as a condition to any agreement with respect to our business combination. Additionally, each of our officers and
directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to another entity,
including other blank check companies similar to our company, pursuant to which such officer or director may be required to present
a business combination opportunity to such entity. Specifically, certain of our executive officers are affiliated with our sponsor
and other entities that make, or are looking to make, investments in companies. Accordingly, if any of our officers or directors
becomes aware of a business combination opportunity which is suitable for an entity to which he or she has fiduciary or contractual
obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity
to such entity, and only present it to us if such entity rejects the opportunity. We do not believe, however, that the fiduciary
duties or contractual obligations of our executive officers will materially affect our ability to complete our business combination.
For additional information regarding our executive officers’ and directors’ business affiliations and potential
conflicts of interest, see “Item 10. Directors, Executive
Officers and Corporate Governance” and “Item
10. Directors, Executive Officers and Corporate Governance — Conflicts of Interest.” Our
amended and restated memorandum and articles of association provides that, subject to fiduciary duties under Cayman Islands law, we
renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered
to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and
contractually permitted to undertake and would otherwise be reasonable for us to pursue.
The past performance of our management team or
of their affiliates is not a guarantee either (i) that we will be able to identify a suitable candidate for our business combination or
(ii) of success with respect to any business combination we may consummate. You should not rely on the historical record of our management
team’s or their affiliates’ performance as indicative of our future performance.
Some of our executive officers and directors may
be located in or have significant ties to China. As a result, it may be difficult for investors to effect service of process within the
United States on our company, executive officers and directors, or enforce judgments obtained in the United States courts against our
company, executive officers and directors.
Status as a Public Company
We believe that our structure will make us an attractive
business combination partner to target businesses. As an existing public company, we offer a target business an alternative to a traditional
initial public offering through a merger or other business combination. In this situation, the owners of the target business would exchange
their stock, shares or other equity interests in the target business for our ordinary shares or for a combination of our ordinary shares
and cash, allowing us to tailor the consideration used in the transaction to the specific needs of the sellers. We believe that target
businesses might find this avenue a more certain and cost-effective method to becoming a public company than a typical initial public
offering. In a typical initial public offering, there are additional expenses incurred in marketing, roadshow and public reporting efforts
that will likely not be present to the same extent in connection with a business combination with us. Furthermore, once the business combination
is consummated, the target business will have effectively become a public company, whereas an initial public offering is always subject
to the underwriters’ ability to complete the offering, as well as general market conditions that could prevent the offering from
occurring. Once public, we believe the target business would then have greater access to capital and an additional means of providing
management incentives consistent with shareholders’ interests than it would have as a privately-held company. Public company status
can offer further benefits by enhancing a company’s profile among potential new customers and vendors and attracting talented employees.
While we believe that our status as a public company will make us an attractive business partner, some potential target businesses may
view the inherent limitations in our status as a blank check company as a deterrent and may prefer to effect a business combination with
a more established entity or with a private company. These limitations include constraints on our available financial resources, which
may be inferior to those of other entities pursuing the acquisition of similar target businesses; the requirement that we seek shareholder
approval of a business combination or conduct a tender offer in relation thereto, which may delay the consummation of a transaction; and
the existence of our outstanding warrants, which may represent a source of future dilution.
Effecting a Business Combination
General
We are not presently engaged in, and we will
not engage in, any substantive commercial business for an indefinite period of time. We intend to utilize cash derived from the
proceeds of our Initial Public Offering and the private placement of private placement units, our equity, debt or a combination of
these in effecting a business combination which has not yet been identified. Accordingly, our shareholders are investing without
first having an opportunity to evaluate the specific merits or risks of any one or more business combinations. A business
combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital but which
desires to establish a public trading market for its shares, while avoiding what it may deem to be adverse consequences of
undertaking a public offering itself. These include time delays, significant expense, loss of voting control and compliance with
various federal and state securities laws. In the alternative, we may seek to consummate a business combination with a company that
may be financially unstable or in its early stages of development or growth. While we may seek to effect simultaneous business
combinations with more than one target business, we will probably have the ability, as a result of our limited resources, to effect
only a single business combination.
We Have Not Identified a Target Business
To date, we have not selected any target business
on which to concentrate our search for a business combination. None of our sponsor, officers, directors, promoters and other affiliates
has engaged in any substantive discussions on our behalf with representatives of other companies regarding the possibility of a potential
merger, share exchange, asset acquisition or other similar business combination with us. Additionally, we have not engaged or retained
any agent or other representative to identify or locate such companies. As a result, we cannot assure you that we will be able to locate
a target business or that we will be able to engage in a business combination with a target business on favorable terms or at all.
Subject to our management team’s pre-existing
fiduciary obligations and the fair market value requirement described below, we have virtually unrestricted flexibility in identifying
and selecting a prospective acquisition candidate. We have not established any specific attributes or criteria (financial or otherwise)
for prospective target businesses other than that we may target disruptive technology and innovative services companies anywhere in the
world and that we intend to focus on companies in developed economies such as the U.S. and Israel, and Southeast Asia. Accordingly, there
is no basis for our investors to evaluate the possible merits or risks of the target business with which we may ultimately complete a
business combination. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot
assure you that we will properly ascertain or assess all significant risk factors.
Sources of Target Business
While we have not yet selected a target business
with which to consummate our business combination, we believe based on our management’s business knowledge and past experience that
there are numerous potential candidates. We expect that our principal means of identifying potential target businesses will be through
the extensive contacts and relationships of our sponsor, initial shareholders, officers and directors. While our officers and directors
are not required to commit any specific amount of time in identifying or performing due diligence on potential target businesses, our
officers and directors believe that the relationships they have developed over their careers and their access to our sponsor’s contacts
and resources will generate a number of potential business combination opportunities that will warrant further investigation. We also
anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment bankers,
venture capital funds, private equity funds, leveraged buyout funds, management buyout funds and other members of the financial community.
Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings.
These sources may also introduce us to target businesses they think we may be interested in on an unsolicited basis, since many of these
sources will have read this Annual Report and know what types of businesses we are targeting.
Our officers and directors must present to us
all target business opportunities that have a fair market value of at least 80% of the assets held in the Trust Account (excluding
taxes payable on the income accrued in the Trust Account) at the time of the agreement to enter into the business combination,
subject to any pre-existing fiduciary or contractual obligations. While we do not presently anticipate engaging the services of
professional firms or other individuals that specialize in business acquisitions on any formal basis (other than EarlyBirdCapital,
Inc. as described elsewhere in this Annual Report), we may engage these firms or other individuals in the future, in which event we
may pay a finder’s fee, consulting fee or other compensation to be determined in an arm’s length negotiation based on
the terms of the transaction. In no event, however, will our sponsor, initial shareholders, officers, directors or their respective
affiliates be paid any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order
to effectuate, the consummation of a business combination (regardless of the type of transaction that it is) other than the up to
$10,000 administrative services fee, the payment of consulting, success or finder fees to our sponsor, officers, directors, initial
shareholders or their affiliates in connection with the consummation of our business combination, the repayment of the $150,000 loan
and reimbursement of any out-of-pocket expenses. Our audit committee will review and approve all reimbursements and payments made to
our sponsor, officers, directors or our or their respective affiliates, with any interested director abstaining from such review and
approval. We have no present intention to enter into a business combination with a target business that is affiliated with any of
our officers, directors or sponsor. However, we are not restricted from entering into any such transactions and may do so if (i)
such transaction is approved by a majority of our disinterested independent directors and (ii) we obtain an opinion from an
independent investment banking firm, or another independent entity that commonly renders valuation opinions, that the business
combination is fair to our unaffiliated shareholders from a financial point of view.
Selection of a Target Business and Structuring
of a Business Combination
Subject to our management team’s pre-existing
fiduciary obligations and the limitations that a target business have a fair market value of at least 80% of the balance in the Trust
Account (excluding taxes payable on the income earned on the Trust Account) at the time of the execution of a definitive agreement for
our business combination, as described below in more detail, and that we must acquire a controlling interest in the target business, our
management has virtually unrestricted flexibility in identifying and selecting a prospective target business. We have not established
any specific attributes or criteria (financial or otherwise) for prospective target businesses other than that we may target disruptive
technology and innovative services companies anywhere in the world and we intend to focus on companies in developed economies such as
the U.S. and Israel, and Southeast Asia. In evaluating a prospective target business, our management may consider a variety of factors,
including one or more of the following:
| · | financial condition and results of operation; |
| · | brand recognition and potential; |
| · | experience and skill of management and availability of additional personnel; |
| · | stage of development of the products, processes or services; |
| · | existing distribution and potential for expansion; |
| · | degree of current or potential market acceptance of the products, processes or services; |
| · | proprietary aspects of products and the extent of intellectual property or other protection for products or formulas; |
| · | impact of regulation on the business; |
| · | regulatory environment of the industry; |
| · | the target business’s compliance with U.S. federal law; |
| · | costs associated with effecting the business combination; |
| · | industry leadership, sustainability of market share and attractiveness of market industries in which a target business participates;
and |
| · | macro competitive dynamics in the industry within which the company competes. |
These criteria are not intended to be exhaustive.
Any evaluation relating to the merits of a particular business combination will be based, to the extent relevant, on the above factors
as well as other considerations deemed relevant by our management in effecting a business combination consistent with our business objective.
In evaluating a prospective target business, we will conduct an extensive due diligence review which will encompass, among other things,
meetings with incumbent management and inspection of facilities, as well as review of financial and other information which is made available
to us. This due diligence review will be conducted either by our management or by unaffiliated third parties we may engage, although we
have no current intention to engage any such third parties.
The time and costs required to select and evaluate
a target business and to structure and complete the business combination cannot presently be ascertained with any degree of certainty.
Any costs incurred with respect to the identification and evaluation of a prospective target business with which a business combination
is not ultimately completed will result in a loss to us and reduce the amount of capital available to otherwise complete a business combination.
Fair Market Value of Target Business
Nasdaq listing rules require that the target business
or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the Trust
Account (excluding taxes payable on the income earned on the Trust Account) at the time of the execution of a definitive agreement for
our business combination. Notwithstanding the foregoing, if we are not then listed on Nasdaq for whatever reason, we would no longer be
required to meet the foregoing 80% fair market value test.
We currently anticipate structuring a business
combination to acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our business
combination where we merge directly with the target business or where we acquire less than 100% of such interests or assets of the target
business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete
such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target
or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under
the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target,
our shareholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending
on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which
we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares, or other equity interests of
a target. In this case, we could acquire a 100% controlling interest in the target; however, as a result of the issuance of a substantial
number of new shares, our shareholders immediately prior to our business combination could own less than a majority of our issued and
outstanding shares subsequent to our business combination. If less than 100% of the equity interests or assets of a target business or
businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired
is what will be valued for purposes of the 80% of Trust Account balance test.
The fair market value of the target will be determined
by our board of directors based upon one or more standards generally accepted by the financial community (such as actual and potential
sales, earnings, cash flow and/or book value). The proxy solicitation materials or tender offer documents used by us in connection with
any proposed transaction will provide public shareholders with our analysis of the fair market value of the target business, as well as
the basis for our determinations. If our board is not able to independently determine that the target business has a sufficient fair market
value, we will obtain an opinion from an unaffiliated, independent investment banking firm, or another independent entity that commonly
renders valuation opinions, with respect to the satisfaction of such criteria.
We will not be required to obtain an opinion from
an investment banking firm as to the fair market value if our board of directors independently determines that the target business complies
with the 80% threshold. Additionally, pursuant to Nasdaq rules, any business combination must be approved by a majority of our independent
directors.
Lack of Business Diversification
We may seek to effect a business combination with
more than one target business, although we expect to complete our business combination with just one business. Therefore, at least initially,
the prospects for our success may be entirely dependent upon the future performance of a single business operation. Unlike other entities
which may have the resources to complete several business combinations of entities operating in multiple industries or multiple areas
of a single industry, it is probable that we will not have the resources to diversify our operations or benefit from the possible spreading
of risks or offsetting of losses. By consummating a business combination with only a single entity, our lack of diversification may:
| · | subject us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact
upon the particular industry in which we may operate subsequent to a business combination; and |
| · | result in our dependency upon the performance of a single operating business or the development or market acceptance of a single or
limited number of products, processes or services. |
If we determine to simultaneously acquire several
businesses and such businesses are owned by different sellers, we will need for each of such sellers to agree that our purchase of its
business is contingent on the simultaneous closings of the other acquisitions, which may make it more difficult for us, and delay our
ability, to complete the business combination. With multiple acquisitions, we could also face additional risks, including additional burdens
and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional
risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating
business.
Limited Ability to Evaluate the Target Business’ Management
Although we intend to scrutinize the management
of a prospective target business when evaluating the desirability of effecting a business combination, we cannot assure you that our assessment
of the target business’ management will prove to be correct. In addition, we cannot assure you that the future management will have
the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of our officers and directors,
if any, in the target business following a business combination cannot presently be stated with any certainty. While it is possible that
some of our key personnel will remain associated in senior management or advisory positions with us following a business combination,
it is unlikely that they will devote their full time efforts to our affairs subsequent to a business combination. Moreover, they would
only be able to remain with the company after the consummation of a business combination if they are able to negotiate employment or consulting
agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the
business combination and could provide for them to receive compensation in the form of cash payments and/or our securities for services
they would render to the company after the consummation of the business combination. While the personal and financial interests of our
key personnel may influence their motivation in identifying and selecting a target business, their ability to remain with the company
after the consummation of a business combination will not be the determining factor in our decision as to whether or not we will proceed
with any potential business combination. Additionally, we cannot assure you that our officers and directors will have significant experience
or knowledge relating to the operations of the particular target business.
Following a business combination, we may seek to
recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the
ability to recruit additional managers, or that any such additional managers we do recruit will have the requisite skills, knowledge or
experience necessary to enhance the incumbent management.
Shareholders May Not Have the Ability to Approve Our Initial
Business Combination
We may conduct redemptions without a shareholder
vote pursuant to the tender offer rules of the SEC subject to the provisions of our amended and restated memorandum and articles of association.
However, we will seek shareholder approval if it is required by applicable law or stock exchange listing requirement, or we may decide
to seek shareholder approval for business or other reasons.
Under the Nasdaq’s listing rules, shareholder
approval would typically be required for our business combination if, for example:
| · | We issue ordinary shares that will be equal to or in excess of 20% of the number of our ordinary shares then-outstanding (other than
in a public offering); |
| · | Any of our directors, officers or 5% or greater shareholder has a 5% or greater interest (or such persons collectively have a 10%
or greater interest), directly or indirectly, in the target company or assets to be acquired or otherwise and the present or potential
issuance of ordinary shares could result in an increase in issued and outstanding ordinary shares or voting power of 5% or more; or |
| · | The issuance or potential issuance of ordinary shares will result in our undergoing a change of control. |
The decision as to whether we will seek shareholder
approval of a proposed business combination in those instances in which shareholder approval is not required by law will be made by us,
solely in our discretion, and will be based on business and reasons, which include a variety of factors, including, but not limited to:
| · | the timing of the transaction, including in the event we determine shareholder approval would require additional time and there is
either not enough time to seek shareholder approval or doing so would place the company at a disadvantage in the transaction or result
in other additional burdens on the company; |
| · | the expected cost of holding a shareholder vote; |
| · | the risk that the shareholders would fail to approve the proposed business combination; |
| · | other time and budget constraints of the company; and |
| · | additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to shareholders. |
Permitted Purchases and Other Transactions with Respect to Our Securities
If we seek shareholder approval of our business
combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our sponsor,
directors, executive officers, or their affiliates may purchase public shares or warrants in privately negotiated transactions or in the
open market either prior to or following the completion of our business combination. Additionally, at any time at or prior to our business
combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors,
executive officers, or their affiliates may enter into transactions with investors and others to provide them with incentives to acquire
public shares, vote their public shares in favor of our business combination or not redeem their public shares. However, they have no
current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions.
None of the funds in the Trust Account will be used to purchase public shares or warrants in such transactions. If they engage in such
transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information
not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act.
In the event that our sponsor, directors, officers,
or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise
their redemption rights or submitted a proxy to vote against our business combination, such selling shareholders would be required to
revoke their prior elections to redeem their shares and any proxy to vote against our business combination. We do not currently anticipate
that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private
transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases
that the purchases are subject to such rules, the purchasers will be required to comply with such rules.
The purpose of any such transaction could be to
(i) vote in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination,
(ii) reduce the number of public warrants outstanding or vote such warrants on any matters submitted to the warrant holders for approval
in connection with our business combination or (iii) satisfy a closing condition in an agreement with a target that requires us to have
a minimum net worth or a certain amount of cash at the closing of our business combination, where it appears that such requirement would
otherwise not be met. Any such purchases of our securities may result in the completion of our business combination that may not otherwise
have been possible.
In addition, if such purchases are made, the public
“float” of our Class A ordinary shares or public warrants may be reduced and the number of beneficial holders of our securities
may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities
exchange.
Our sponsor, officers, directors and/or their affiliates
anticipate that they may identify the shareholders with whom our sponsor, officers, directors or their affiliates may pursue privately
negotiated transactions by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders
(in the case of Class A ordinary shares) following our mailing of tender offer or proxy materials in connection with our business combination.
To the extent that our sponsor, officers, directors, or their affiliates enter into a private transaction, they would identify and contact
only potential selling or redeeming shareholders who have expressed their election to redeem their shares for a pro rata share of the
Trust Account or vote against our business combination, whether or not such shareholder has already submitted a proxy with respect to
our business combination but only if such shares have not already been voted at the general meeting related to our business combination.
Our sponsor, executive officers, directors, or their affiliates will select which shareholders to purchase shares from based on the negotiated
price and number of shares and any other factors that they may deem relevant, and will be restricted from purchasing shares if such purchases
do not comply with Regulation M under the Exchange Act and the other federal securities laws.
Our sponsor, officers, directors and/or their affiliates
will be restricted from making purchases of shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. We
expect any such purchases would be reported by such person pursuant to Section 13 and Section 16 of the Exchange Act to the extent such
purchasers are subject to such reporting requirements.
Redemption Rights for Public Shareholders upon
Completion of Our Initial Business Combination
We will provide our public shareholders with the
opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our business combination at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to
the consummation of the business combination, including interest and other income earned on the funds held in the Trust Account and not
previously released to us to pay our taxes, if any, divided by the number of then-outstanding public shares, subject to the limitations
described herein. The amount in the Trust Account is initially anticipated to be $10.10 per public share. The per-share amount we will
distribute to investors who properly redeem their shares will not be reduced by the cash fee payable to EarlyBirdCapital for services
performed in connection with the business combination. The redemption rights will include the requirement that a beneficial holder must
identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of our business combination
with respect to our warrants. Our sponsor and each member of our management team have entered into an agreement with us, pursuant to which
they have agreed to waive their redemption rights with respect to any Founder Shares and public shares held by them in connection with
(i) the completion of our business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum
and articles of association (A) that would affect our public shareholders’ ability to convert or sell their shares to us in connection
with a business combination as described herein or that would modify our obligation to redeem 100% of our public shares if we do not complete
our business combination within 18 months from the IPO Closing Date or (B) with respect to any other provision relating to the rights
of holders of our Class A ordinary shares or pre-business combination activity.
Limitations on Redemptions
Our amended and restated memorandum and
articles of association will provide that in no event will we redeem our public shares in an amount that would cause our net
tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock”
rules). However, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii)
cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to
satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash
consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount
required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash
available to us, we will not complete the business combination or redeem any shares, and all Class A ordinary shares submitted for
redemption will be returned to the holders thereof.
Manner of Conducting Redemptions
We will provide our public shareholders with the
opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our business combination either (i) in
connection with a general meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether
we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion,
and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require
us to seek shareholder approval under applicable law or stock exchange listing requirement or whether we were deemed to be a foreign private
issuer (which would require a tender offer rather than seeking shareholder approval under SEC rules). Asset acquisitions and share purchases
would not typically require shareholder approval while direct mergers with our company where we do not survive and any transactions where
we issue more than 20% of our issued and outstanding ordinary shares or seek to amend our amended and restated memorandum and articles
of association would typically require shareholder approval. We currently intend to conduct redemptions in connection with a shareholder
vote unless shareholder approval is not required by applicable law or stock exchange listing requirement or we choose to conduct redemptions
pursuant to the tender offer rules of the SEC for business or other reasons. So long as we maintain a listing for our securities on the
Nasdaq, we will be required to comply with the Nasdaq rules.
If we held a shareholder vote to approve our business
combination, we will, pursuant to our amended and restated memorandum and articles of association:
| · | conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the
solicitation of proxies, and not pursuant to the tender offer rules; and |
| · | file proxy materials with the SEC. |
In the event that we seek shareholder approval
of our business combination, we will distribute proxy materials and, in connection therewith, provide our public shareholders with the
redemption rights described above upon completion of the business combination.
If we seek shareholder approval, we will complete
our business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative
vote of a majority of the shareholders who attend and vote at a general meeting of the company. In such case, our sponsor and each member
of our management team have agreed to vote their Founder Shares and public shares in favor of our business combination. As a result, in
addition to our initial purchaser’s Founder Shares, we would need 4,312,501, or 37.5% (assuming all issued and outstanding shares
are voted) of the 11,500,000 public shares to be voted in favor of a business combination in order to have our business combination approved.
Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction
or vote at all. In addition, our sponsor and each member of our management team have entered into an agreement with us, pursuant to which
they have agreed to waive their redemption rights with respect to any Founder Shares and public shares held by them in connection with
(i) the completion of a business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum
and articles of association (A) that would affect our public shareholders’ ability to convert or sell their shares to us in connection
with a business combination as described herein or that would modify our obligation to redeem 100% of our public shares if we do not complete
our business combination within 18 months from the IPO Closing Date or (B) with respect to any other provision relating to the rights
of holders of our Class A ordinary shares or pre-business combination activity.
If we conduct redemptions pursuant to the tender
offer rules of the SEC, we will, pursuant to our amended and restated memorandum and articles of association:
| · | conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and |
| · | file tender offer documents with the SEC prior to completing our business combination which contain substantially the same financial
and other information about the business combination and the redemption rights as is required under Regulation 14A of the Exchange Act,
which regulates the solicitation of proxies. |
Upon the public announcement of our business combination,
if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate any plan established in accordance
with Rule 10b5-1 to purchase Class A ordinary shares in the open market, in order to comply with Rule 14e-5 under the Exchange
Act.
In the event we conduct redemptions pursuant to
the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under
the Exchange Act, and we will not be permitted to complete our business combination until the expiration of the tender offer period. In
addition, the tender offer will be conditioned on public shareholders not tendering more than the number of public shares we are permitted
to redeem. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete
such business combination.
Limitation on Redemption upon Completion of Our Initial Business
Combination If We Seek Shareholder Approval
If we seek shareholder approval of our business combination and we do not conduct redemptions
in connection with our business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association
will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder
is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming
its shares with respect to more than an aggregate of 15% of the public shares, which we refer to as “Excess Shares,” without
our prior consent. We believe this restriction will discourage shareholders from accumulating large blocks of shares, and subsequent attempts
by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us
or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent
this provision, a public shareholder holding more than an aggregate of 15% of the public shares could threaten to exercise its redemption
rights if such holder’s shares are not purchased by us, our sponsor or our management at a premium to the then-current market price
or on other undesirable terms. By limiting our shareholders’ ability to redeem no more than 15% of the public shares without our
prior consent, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete
our business combination, particularly in connection with a business combination with a target that requires as a closing condition that
we have a minimum net worth or a certain amount of cash.
However, we would not be restricting our shareholders’
ability to vote all of their shares (including Excess Shares) for or against our business combination.
Tendering Share Certificates in Connection
with a Tender Offer or Redemption Rights
Public shareholders seeking to exercise their redemption
rights, whether they are record holders or hold their shares in “street name,” will be required to either tender their certificates
(if any) to our transfer agent prior to the date set forth in the proxy solicitation or tender offer materials, as applicable, mailed
to such holders, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/
Withdrawal At Custodian) System, at the holder’s option, in each case up to two business days prior to the initially scheduled vote
to approve the business combination. The proxy solicitation or tender offer materials, as applicable, that we will furnish to holders
of our public shares in connection with our business combination will indicate the applicable delivery requirements, which will include
the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Accordingly, a public shareholder
would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two business days
prior to the initially scheduled vote on the proposal to approve the business combination if we distribute proxy materials, as applicable,
to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short period in which to exercise redemption
rights, it is advisable for shareholders to use electronic delivery of their public shares.
There is a nominal cost associated with the above-referenced
tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically
charge the tendering broker a fee of approximately $80.00 and it would be up to the broker whether or not to pass this cost on to the
redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights
to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such
delivery must be effectuated.
The foregoing is different from the procedures
used by many blank check companies. In order to perfect redemption rights in connection with their business combinations, many blank check
companies would distribute proxy materials for the shareholders’ vote on a business combination, and a holder could simply vote
against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption
rights. After the business combination was approved, the company would contact such shareholder to arrange for him or her to deliver his
or her certificate to verify ownership. As a result, the shareholder then had an “option window” after the completion of the
business combination during which he or she could monitor the price of the company’s shares in the market. If the price rose above
the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to the company
for cancellation. As a result, the redemption rights, to which shareholders were aware they needed to commit before the general meeting,
would become “option” rights surviving past the completion of the business combination until the redeeming holder delivered
its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming shareholder’s
election to redeem is irrevocable once the business combination is approved.
Any request to redeem such shares, once made, may
be withdrawn at any time up to two business days prior to the initially scheduled vote on the proposal to approve the business combination,
unless otherwise agreed to by us or as otherwise provided in the proxy statement. Furthermore, if a holder of a public share delivered
its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect
to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically).
It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed
promptly after the completion of our business combination.
If our business combination is not approved or
completed for any reason, then our public shareholders who elected to exercise their redemption rights would not be entitled to redeem
their shares for the applicable pro rata share of the Trust Account. In such case, we will promptly return any certificates delivered
by public holders who elected to redeem their shares.
If our initial proposed business combination is
not completed, we may continue to try to complete a business combination with a different target until 18 months from the IPO Closing
Date.
Redemption of Public Shares and Liquidation
If No Initial Business Combination
Our amended and restated memorandum and
articles of association will provide that we have only 18 months from the IPO Closing Date to consummate a business combination. If
we have not consummated a business combination within 18 months from the IPO Closing 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, redeem the
public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including
interest and other income earned on the funds held in the Trust Account and not previously released to us to pay our income taxes,
if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares,
which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive
further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the
approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations
under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no
redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to consummate a
business combination within 18 months from the IPO Closing Date. Our amended and restated memorandum and articles of association
will provide that, if we wind up for any other reason prior to the consummation of our business combination, we will follow the
foregoing procedures with respect to the liquidation of the Trust Account as promptly as reasonably possible but not more than ten
business days thereafter, subject to applicable Cayman Islands law.
Our sponsor and each member of our management team
have entered into an agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the
Trust Account with respect to any Founder Shares they hold if we fail to consummate a business combination within 18 months from the IPO
Closing Date (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they
hold if we fail to complete our business combination within the prescribed time frame).
Our sponsor, executive officers and directors have
agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles
of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right
to have their shares redeemed in connection with our business combination or to redeem 100% of our public shares if we do not complete
our business combination within 18 months from the IPO Closing Date or (B) with respect to any other provision relating to the rights
of holders of our Class A ordinary shares or pre-business combination activity, unless we provide our public shareholders with the opportunity
to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount
then on deposit in the Trust Account, including interest and other income earned on the funds held in the Trust Account and not previously
released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares. However, we may not redeem our public
shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the
SEC’s “penny stock” rules). If this optional redemption right is exercised with respect to an excessive number of public
shares such that we cannot satisfy the net tangible asset requirement, we would not proceed with the amendment or the related redemption
of our public shares at such time. This redemption right shall apply in the event of the approval of any such amendment, whether proposed
by our sponsor, any executive officer, director or any other person.
We expect that all costs and expenses associated
with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the $1,400,000
held outside the Trust Account plus up to $100,000 of funds from the Trust Account available to us to pay dissolution expenses, although
we cannot assure you that there will be sufficient funds for such purpose.
If we were to expend all of the net proceeds of
our Initial Public Offering and the sale of the private placement units, other than the proceeds deposited in the Trust Account, and without
taking into account interest, if any, earned on the Trust Account, the per-share redemption amount received by shareholders upon our dissolution
would be $10.10. The proceeds deposited in the Trust Account could, however, become subject to the claims of our creditors which would
have higher priority than the claims of our public shareholders. We cannot assure you that the actual per-share redemption amount received
by shareholders will not be less than $10.10. While we intend to pay such amounts, if any, we cannot assure you that we will have funds
sufficient to pay or provide for all creditors’ claims.
Although we will seek to have all vendors,
service providers (other than our independent registered public accounting firm), prospective target businesses and other entities
with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies
held in the Trust Account for the benefit of our public shareholders, there is no guarantee that they will execute such agreements
or even if they execute such agreements that they would be prevented from bringing claims against the Trust Account including, but
not limited, to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the
enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the
funds held in the Trust Account. If any third-party refuses to execute an agreement waiving such claims to the monies held in the
Trust Account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement
with a third-party that has not executed a waiver if management believes that such third-party’s engagement would be
significantly more beneficial to us than any alternative. An example of possible instances where we may engage a third-party that
refuses to execute a waiver includes the engagement of a third-party consultant whose particular expertise or skills are believed by
management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where
management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities
will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or
agreements with us and will not seek recourse against the Trust Account for any reason. In order to protect the amounts held in the
Trust Account, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third-party for services
rendered or products sold to us (other than our independent registered public accounting firm), or a prospective target business
with which we have discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below the lesser of
(i) $10.10 per public share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation
of the Trust Account if less than $10.10 per public share due to reductions in the value of the trust assets, in each case net of
the interest that may be withdrawn to pay our tax obligations, provided that such liability will not apply to any claims by a
third-party or prospective target business that executed a waiver of any and all rights to seek access to the Trust Account nor will
it apply to any claims under our indemnity of the underwriters of our Initial Public Offering against certain liabilities, including
liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third-party, our
sponsor will not be responsible to the extent of any liability for such third-party claims. However, we have not asked our sponsor
to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to
satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of the company. Therefore, we
cannot assure you that our sponsor would be able to satisfy those obligations. None of our officers or directors will indemnify us
for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
In the event that the proceeds in the Trust Account
are reduced below the lesser of (i) $10.10 per public share and (ii) the actual amount per public share held in the Trust Account as of
the date of the liquidation of the Trust Account if less than $10.10 per public share due to reductions in the value of the trust assets,
in each case net of the amount of interest which may be withdrawn to pay our tax obligations, and our sponsor asserts that it is unable
to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent
directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently
expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations
to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance.
Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less
than $10.10 per public share.
We will seek to reduce the possibility that our
sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other
than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute
agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Our sponsor will
also not be liable as to any claims under our indemnity of the underwriters of our Initial Public Offering against certain liabilities,
including liabilities under the Securities Act. We have access to up to $1,400,000 with which to pay any such potential claims (including
costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). In the
event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, shareholders who
received funds from our Trust Account could be liable for claims made by creditors, however such liability will not be greater than the
amount of funds from our Trust Account received by any such shareholder. In the event that our offering expenses exceed our estimate of
$600,000, we may fund such excess with funds from the funds not to be held in the Trust Account. In such case, the amount of funds we
intend to be held outside the Trust Account would decrease by a corresponding amount. Conversely, in the event that the offering expenses
are less than our estimate of $600,000, the amount of funds we intend to be held outside the Trust Account would increase by a corresponding
amount.
If we file a bankruptcy petition or an
involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject
to applicable bankruptcy law, and may be included in our bankruptcy or insolvency estate and subject to the claims of third parties
with priority over the claims of our shareholders. To the extent any bankruptcy or insolvency claims deplete the Trust Account, we
cannot assure you we will be able to return $10.10 per public share to our public shareholders. Additionally, if we file a
bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by
shareholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer”
or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our
shareholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may
have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public shareholders
from the Trust Account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us
for these reasons.
Our public shareholders will be entitled to receive
funds from the Trust Account only (i) in the event of the redemption of our public shares if we do not complete our business combination
within 18 months from the IPO Closing Date, (ii) in connection with a shareholder vote to amend our amended and restated memorandum and
articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the
right to have their shares redeemed in connection with our business combination or to redeem 100% of our public shares if we do not complete
our business combination within 18 months from the IPO Closing Date or (B) with respect to any other provision relating to the rights
of holders of our Class A ordinary shares or pre-business combination activity., or (iii) if they redeem their respective shares for cash
upon the completion of the business combination. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder
vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the Trust Account upon the subsequent completion
of a business combination or liquidation if we have not consummated a business combination within 18 months from the IPO Closing Date,
with respect to such Class A ordinary shares so redeemed. However, in no event will we redeem our public shares in an amount that would
cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock”
rules). In no other circumstances will a shareholder have any right or interest of any kind to or in the Trust Account. In the event we
seek shareholder approval in connection with our business combination, a shareholder’s voting in connection with the business combination
alone will not result in a shareholder’s redeeming its shares to us for an applicable pro rata share of the Trust Account. Such
shareholder must have also exercised its redemption rights described above. These provisions of our amended and restated memorandum and
articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with a
shareholder vote.
Amended and Restated Memorandum and Articles
of Association
Our amended and restated memorandum and articles
of association contains certain requirements and restrictions that apply to us until the completion of our business combination. Our amended
and restated memorandum and articles of association contains a provision which provides that, if we seek to amend our amended and restated
memorandum and articles of association (A) that would affect our public shareholders’ ability to convert or sell their shares to
us in connection with a business combination as described herein or to modify the substance or timing of our obligation to redeem 100%
of our public shares if we do not complete our business combination within 18 months from the IPO Closing Date or (B) with respect to
any other provision relating to shareholders’ rights or pre-business combination activity, we will provide public shareholders with
the opportunity to redeem their public shares in connection with any such amendment. Specifically, our amended and restated memorandum
and articles of association will provide, among other things, that:
| · | prior to the completion of our business combination, we shall either (1) seek shareholder approval of our business combination at
a meeting called for such purpose at which public shareholders may elect to redeem their public shares without voting, and if they do
vote, irrespective of whether they vote for or against the proposed business combination, or (2) provide our public shareholders with
the opportunity to redeem all or a portion of their public shares upon the completion of our business combination by means of a tender
offer (and thereby avoid the need for a shareholder vote), in each in cash, for an amount payable in cash equal to the aggregate amount
then on deposit in the Trust Account as of two business days prior to the completion of our business combination, including interest (which
interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to the limitations
described herein and provided that the Company shall not repurchase Public Shares in an amount that would cause the Company’s net
tangible assets to be less than US$5,000,001 immediately prior to or upon consummation of such Business Combination. Such obligation to
repurchase Shares is subject to the completion of the proposed Business Combination to which it relates; |
| · | we will consummate our business combination only if we have net tangible assets of at least $5,000,001 either immediately prior to
or upon completion of our business combination and, solely if we seek shareholder approval, we obtain the approval of an ordinary resolution
under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting
of the company; |
| · | if our business combination is not consummated within 18 months from the IPO Closing Date, then our existence will terminate and we
will distribute all amounts in the Trust Account; and |
| · | prior to our business combination, we may not issue additional shares that would entitle the holders thereof to (1) receive funds
from the Trust Account or (2) vote as a class with our public shares on any business combination. |
These provisions cannot be amended without
the approval of holders of at least two-thirds of our ordinary shares. In the event we seek shareholder approval in connection with our
business combination, our amended and restated memorandum and articles of association will provide that we may consummate our business
combination only if approved by a majority of the ordinary shares voted by our shareholders at a duly held general meeting.
Additionally, our amended and restated memorandum
and articles of association provides that, prior to our business combination, only holders of our Founder Shares will have the right to
vote on the appointment of directors and that holders of a majority of our Founder Shares may remove a member of the board of directors
for any reason. These provisions of our amended and restated memorandum and articles of association may only be amended by a special resolution
passed by at least 90% of our ordinary shares voting in a general meeting. With respect to any other matter submitted to a vote of our
shareholders, including any vote in connection with our business combination, except as required by law, holders of our Founder Shares
and holders of our public shares will vote together as a single class, with each share entitling the holder to one vote.
Website
We do not have a website.
Our public filings, including our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, our
proxy statements and reports filed by our executive officers and directors under Section 16(a) of the Securities Exchange Act, and any
amendments to those filings, are available free of charge on the SEC’s website at www.sec.gov.
An investment in our securities
involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained
in this Annual Report on Form 10-K, including our financial statements and related notes, before making a decision to invest in our securities.
If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In
that event, the trading price of our securities could decline, and you could lose all or part of your investment.
General Risk Factors
We are a newly incorporated company with no operating history
and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a newly incorporated company incorporated
under the laws of the Cayman Islands with no operating results. Because we lack an operating history, you have no basis upon which to
evaluate our ability to achieve our business objective of completing our business combination with one or more target businesses. We have
no plans, arrangements or understandings with any prospective target business concerning a business combination and may be unable to complete
our business combination. If we fail to complete our business combination, we will never generate any operating revenues.
Past performance of either the members of our management team
or their respective affiliates may not be indicative of future performance of an investment in the Company.
Information regarding performance of either the
members of our management team or their respective affiliates is presented for informational purposes only. Past performance of either
the members of our management team or their respective affiliates is not a guarantee either (1) that we will be able to identify a suitable
candidate for our business combination or (2) of success with respect to any business combination we may consummate. You should not rely
on the historical record of our management team and their affiliates as indicative of our future performance of an investment in the company
or the returns the company will, or is likely to, generate going forward. Our management has no experience in operating special purpose
acquisition companies.
We are an emerging growth company and a smaller reporting company
within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging
growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult
to compare our performance with other public companies.
We are an “emerging growth
company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain
exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies
including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,
and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any
golden parachute payments not previously approved. As a result, our shareholders may not have access to certain information they may
deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that
status earlier, including if the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the end of
any second quarter of a fiscal year, in which case we would no longer be an emerging growth company as of the end of such fiscal
year. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some
investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities
may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of
our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but
any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a
standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company,
can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our
financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has
opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards
used.
Additionally, we are a “smaller reporting
company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure
obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting
company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds $250
million as of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during such completed
fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the end of that year’s
second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial
statements with other public companies difficult or impossible.
We are currently operating in a period of economic uncertainty
and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflict
between Russia and Ukraine. Our search for a business combination, and any target business with which we ultimately consummate a business
combination, may be materially adversely affected by any negative impact on the global economy and capital markets resulting from the
conflict in Ukraine or any other geopolitical tensions.
U.S. and global markets are experiencing volatility
and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine. On
February 24, 2022, a full-scale military invasion of Ukraine by Russian troops was reported. Although the length and impact of the ongoing
military conflict is highly unpredictable, the conflict in Ukraine could lead to market disruptions, including significant volatility
in commodity prices, credit and capital markets, as well as supply chain interruptions. We are continuing to monitor the situation in
Ukraine and globally and assessing its potential impact on our business. Additionally, Russia’s prior annexation of Crimea, recent
recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military interventions in Ukraine
have led to sanctions and other penalties being levied by the United States, European Union and other countries against Russia, Belarus,
the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic, including
agreement to remove certain Russian financial institutions from the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”)
payment system, expansive ban on imports and exports of products to and from Russia and ban on exportation of U.S denominated banknotes
to Russia or persons locates there. Additional potential sanctions and penalties have also been proposed and/or threatened. Russian military
actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of
liquidity in capital markets, potentially making it more difficult for us to obtain additional funds. Any of the abovementioned factors
could affect our ability to search for a target and consummate a business combination. The extent and duration of the military action,
sanctions and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions may also magnify
the impact of other risks described in this Annual Report on Form 10-K.
Risks Relating to Our Search for, and Consummation of or Inability
to Consummate, a Business Combination
Our public shareholders may not be afforded an opportunity to
vote on our proposed business combination, which means we may complete our business combination even though a majority of our public shareholders
do not support such a combination.
We will either (1) seek shareholder approval of
our business combination at a meeting called for such purpose at which public shareholders may elect to redeem their public shares without
voting, and if they do vote, irrespective of whether they vote for or against the proposed business combination, or (2) provide our public
shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our business combination by
means of a tender offer (and thereby avoid the need for a shareholder vote), in each in cash, for an amount payable in cash equal to the
aggregate amount then on deposit in the Trust Account as of two business days prior to the completion of our business combination, including
interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to
the limitations described herein. Accordingly, it is possible that we will consummate our business combination even if holders of a majority
of our public shares do not approve of the business combination we consummate. The decision as to whether we will seek shareholder approval
of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely
in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction
would otherwise require us to seek shareholder approval. For instance, Nasdaq rules currently allow us to engage in a tender offer in
lieu of a general meeting but would still require us to obtain shareholder approval if we were seeking to issue more than 20% of our issued
and outstanding shares to a target business as consideration in any business combination.
Therefore, if we were structuring a business combination
that required us to issue more than 20% of our issued and outstanding shares, we would seek shareholder approval of such business combination
instead of conducting a tender offer.
Your only opportunity to affect the investment decision regarding
a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek
shareholder approval of such business combination.
At the time of your investment in us, you will
not be provided with an opportunity to evaluate the specific merits or risks of any target businesses. Additionally, since our board of
directors may complete a business combination without seeking shareholder approval, public shareholders may not have the right or opportunity
to vote on the business combination, unless we seek such shareholder approval. Accordingly, if we do not seek shareholder approval, your
only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption
rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public
shareholders in which we describe our business combination.
Our search for a business combination, and any target business
with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19)
pandemic.
The COVID-19 pandemic has resulted in a widespread
health crisis that has adversely affected the economies and financial markets worldwide, and the business of any potential target business
with which we consummate a business combination could be materially and adversely affected. Furthermore, we may be unable to complete
a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors
or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a
timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are
highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of COVID-19 and the actions
to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue
for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we
ultimately consummate a business combination, may be materially adversely affected.
The ability of our public shareholders to redeem their shares
for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to
enter into a business combination with a target.
We may seek to enter into a business combination
transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount
of cash. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing condition and, as
a result, would not be able to proceed with the business combination. Furthermore, in no event will we redeem our public shares in an
amount that would cause our net tangible assets to be less than $5,000,001 either immediately prior to or upon completion of our business
combination (so that we do not then become subject to the SEC’s “penny stock” rules), or any greater net tangible asset
or cash requirement that may be contained in the agreement relating to our business combination. Consequently, if accepting all properly
submitted redemption requests would cause our net tangible assets to be less than $5,000,001 either immediately prior to or upon completion
of our business combination or less than such greater amount necessary to satisfy a closing condition as described above, we would not
proceed with such redemption of our public shares and the related business combination, and we instead may search for an alternate business
combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction
with us.
The ability of our public shareholders to exercise redemption
rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our
capital structure.
At the time we enter into an agreement for our
business combination, we will not know how many shareholders may exercise their redemption rights and, therefore, we will need to structure
the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our business combination
agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount
of cash at closing, we will need to reserve a portion of the cash in the Trust Account to meet such requirements, or arrange for third-party
financing. In addition, if a larger number of shares is submitted for redemption than we initially expected, we may need to restructure
the transaction to reserve a greater portion of the cash in the Trust Account or arrange for third-party financing.
Raising additional third-party financing may involve
dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability
to complete the most desirable business combination available to us or optimize our capital structure.
The ability of our public shareholders to exercise redemption
rights with respect to a large number of our shares could increase the probability that our business combination would be unsuccessful
and that you would have to wait for liquidation in order to redeem your shares.
If our business combination agreement requires
us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount of cash at closing,
the probability that our business combination would be unsuccessful increases. If our business combination is unsuccessful, you would
not receive your pro rata portion of the Trust Account until we liquidate the Trust Account. If you are in need of immediate liquidity,
you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to the pro rata amount
per share in the Trust Account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected
in connection with our redemption until we liquidate or you are able to sell your shares in the open market.
The requirement that we complete our business combination within
the prescribed time frame may give potential target businesses leverage over us in negotiating a business combination and may limit the
time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution
deadline, which could undermine our ability to complete our business combination on terms that would produce value for our shareholders.
Any potential target business with which we
enter into negotiations concerning a business combination will be aware that we must complete our business combination within 18
months from the IPO Closing Date. Consequently, such target business may obtain leverage over us in negotiating a business
combination, knowing that if we do not complete our business combination with that particular target business, we may be unable to
complete our business combination with any target business. This risk will increase as we get closer to the end of the 18 month
period. In addition, we may have limited time to conduct due diligence and may enter into our business combination on terms that we
would have rejected upon a more comprehensive investigation.
We may not be able to complete our business combination within
the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem our public
shares and liquidate, in which case our public shareholders may receive only $10.10 per share, or less than such amount in certain circumstances,
and our warrants and rights will expire worthless.
Our sponsor, officers and directors have agreed
that we must complete our business combination within 18 months from the IPO Closing Date. We may not be able to find a suitable target
business and complete our business combination within such time period. Our ability to complete our business combination may be negatively
impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein.
If we are unable to complete our business combination
within such 18 month period, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible
but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the Trust Account, including interest (less up to $100,000 of interest to pay dissolution expenses and which
interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely
extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any);
and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board
of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors
and the requirements of other applicable law. In such case, our public shareholders may receive only $10.10 per share, or less than $10.10
per share, on the redemption of their shares, and our warrants will expire worthless. See “— If third parties bring claims
against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be
less than $10.10 per share” and other risk factors herein.
If we seek shareholder approval of our business combination,
our sponsor, directors, officers, or any of their affiliates may elect to purchase shares or warrants from public shareholders, which
may influence a vote on a proposed business combination and reduce the public “float” of our securities.
If we seek shareholder approval of our business
combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our initial
shareholders, directors, officers, or any of their affiliates may purchase public shares or public warrants or a combination thereof in
privately negotiated transactions or in the open market either prior to or following the completion of our business combination, although
they are under no obligation or duty to do so. Such a purchase may include a contractual acknowledgement that such shareholder, although
still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights.
In the event that our sponsor, directors, officers, or any of their affiliates purchase shares in privately negotiated transactions from
public shareholders who have already elected to exercise their redemption rights or submitted a proxy to vote against our business combination,
such selling shareholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against our business
combination. The price per share paid in any such transaction may be different than the amount per share a public shareholder would receive
if it elected to redeem its shares in connection with our business combination. The purpose of such purchases could be to vote such shares
in favor of our business combination and thereby increase the likelihood of obtaining shareholder approval of our business combination
or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash
at the closing of our business combination, where it appears that such requirement would otherwise not be met. The purpose of any such
purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted
to the warrant holders for approval in connection with our business combination. This may result in the completion of our business combination
that may not otherwise have been possible.
In addition, if such purchases are made, the public
“float” of our Class A ordinary shares or public warrants and the number of beneficial holders of our securities may be reduced,
possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Because of our limited resources and the significant
competition for business combination opportunities, it may be more difficult for us to complete our business combination. If we are
unable to complete our business combination, our public shareholders may receive only approximately $10.10 per share, or less in
certain circumstances, on our redemption of their shares, and our warrants will expire worthless.
We expect to encounter intense competition from
other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships),
other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire.
Many of these individuals and entities are well established and have extensive experience in identifying and effecting, directly or indirectly,
acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical,
human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted
with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net
proceeds of our Initial Public Offering and the sale of the private placement units, our ability to compete with respect to the acquisition
of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation
gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, in the event we seek shareholder approval
of our business combination and we are obligated to pay cash for our Class A ordinary shares, it will potentially reduce the resources
available to us for our business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating
a business combination. If we are unable to complete our business combination, our public shareholders may receive only approximately
$10.10 per share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless. See
“— If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption
amount received by shareholders may be less than $10.10 per share” and other risk factors herein.
If we are deemed to be an investment company under the Investment
Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it
difficult for us to complete our business combination.
If we are deemed to be an investment company under
the Investment Company Act, our activities may be restricted, including:
| · | restrictions on the nature of our investments, and |
| · | restrictions on the issuance of securities, |
| · | each of which may make it difficult for us to complete our business
combination. |
In addition, we may have imposed upon us
burdensome requirements, including:
| · | registration as an investment company with the SEC; |
| · | adoption of a specific form of corporate structure; and |
| · | reporting, record keeping, voting, proxy and disclosure requirements
and other rules and regulations that we are currently not subject to. |
We do not believe that our anticipated principal
activities will subject us to the Investment Company Act. The proceeds held in the Trust Account may be invested by the trustee only in
U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting
certain conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the proceeds will be restricted to these
instruments, we believe we will meet the requirements for the exemption provided in Rule 3a-1 promulgated under the Investment Company
Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require
additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination. If we are unable
to complete our business combination, our public shareholders may receive only approximately $10.10 per share, or less in certain circumstances,
on the liquidation of our Trust Account and our warrants will expire worthless.
Changes in laws or regulations, or a failure to comply with any
laws and regulations, may adversely affect our business, including our ability to negotiate and complete our business combination, and
results of operations.
We are subject to laws and regulations
enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal
requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those
laws and regulations and their interpretation and application may also change from time to time and those changes could have a
material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable
laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to
negotiate and complete our business combination, and results of operations.
If the funds not being held in the Trust Account are insufficient
to allow us to operate for at least the 18 months following the IPO Closing Date, we may be unable to complete our business combination.
Of the net proceeds of our Initial Public Offering
and the sale of the private placement units, only $1,400,000 will be available to us initially outside the Trust Account to fund our working
capital requirements. In the event that our offering expenses exceed our estimate of $600,000, we may fund such excess with funds not
to be held in the Trust Account. In such case, the amount of funds we intend to be held outside the Trust Account would decrease by a
corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $600,000, the amount of funds
we intend to be held outside the Trust Account would increase by a corresponding amount. The funds available to us outside of the Trust
Account may not be sufficient to allow us to operate for at least the 18 months following the IPO Closing Date, assuming that our business
combination is not completed during that time. We expect to incur significant costs in pursuit of our acquisition plans. If we are required
to seek additional capital, we would need to borrow funds from our sponsor, management team or other third parties to operate or may be
forced to liquidate. Neither our sponsor, members of our management team nor any of their affiliates is under any obligation to loan funds
to, or invest in, us in such circumstances. Any such loans may be repaid only from funds held outside the Trust Account or from funds
released to us upon completion of our business combination. If we are unable to complete our business combination because we do not have
sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In such case, our public shareholders
may receive only $10.10 per share, or less in certain circumstances, and our warrants and rights will expire worthless. See “—
If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount
received by shareholders may be less than $10.10 per share” and other risk factors herein.
Although we have identified general criteria and guidelines that
we believe are important in evaluating prospective target businesses, we may enter into our business combination with a target that does
not meet such criteria and guidelines, and as a result, the target business with which we enter into our business combination may not
have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria and
guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our business combination
will not have all of these positive attributes. If we complete our business combination with a target that does not meet some or all of
these criteria and guidelines, such combination may not be as successful as a combination with a business that does meet all of our general
criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria
and guidelines, a greater number of shareholders may exercise their redemption rights, which may make it difficult for us to meet any
closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if shareholder
approval of the transaction is required by applicable law or stock exchange listing requirement, or we decide to obtain shareholder approval
for business or other reasons, it may be more difficult for us to attain shareholder approval of our business combination if the target
business does not meet our general criteria and guidelines. If we are unable to complete our business combination, our public shareholders
may receive only approximately $10.10 per share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants
will expire worthless.
We may seek acquisition opportunities with an early stage company,
a financially unstable business or an entity lacking an established record of revenue or earnings.
To the extent we complete our business
combination with an early stage company, a financially unstable business or an entity lacking an established record of sales or
earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include
investing in a business without a proven business model and with limited historical financial data, volatile revenues or earnings,
intense competition and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to
evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the
significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be
outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target
business.
We are not required to obtain an opinion from an independent
investment banking firm or from another independent entity that commonly renders valuation opinions, and consequently, you may have no
assurance from an independent source that the price we are paying for the business is fair to our company from a financial point of view.
Unless we complete our business combination with
an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm, or from another independent
entity that commonly renders valuation opinions, that the price we are paying is fair to our company from a financial point of view. If
no opinion is obtained, our shareholders will be relying on the judgment of our board of directors, who will determine fair market value
based on standards generally accepted by the financial community. Such standards used will be disclosed in our tender offer documents
or proxy solicitation materials, as applicable, related to our business combination.
Since only holders of our Founder Shares have the right to vote
on the appointment of directors, upon the listing of our shares on the Nasdaq, the Nasdaq may consider us to be a “controlled company”
within the meaning of the Nasdaq rules and, as a result, we may qualify for exemptions from certain corporate governance requirements.
Only holders of our Founder Shares have the right
to vote on the appointment of directors. As a result, the Nasdaq may consider us to be a “controlled company” within the meaning
of the Nasdaq corporate governance standards. Under the Nasdaq corporate governance standards, a company of which more than 50% of the
voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with
certain corporate governance requirements, including the requirements that:
| · | we have a board that includes a majority of “independent directors,”
as defined under the rules of the Nasdaq; |
| · | we have a compensation committee of our board that is comprised entirely
of independent directors with a written charter addressing the committee’s purpose and responsibilities; and |
| · | we have a nominating and corporate governance committee of our board that
is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities. |
We do not intend to utilize these exemptions and
intend to comply with the corporate governance requirements of the Nasdaq, subject to applicable phase-in rules. However, if we determine
in the future to utilize some or all of these exemptions, you will not have the same protections afforded to shareholders of companies
that are subject to all of the Nasdaq corporate governance requirements.
Unlike certain other blank check companies, our initial shareholder
will receive additional Class A ordinary shares if we issue shares to consummate a business combination.
The
Founder Shares will automatically convert into Class A ordinary shares on the first business day following the completion of our business
combination on a one-for-one basis, subject to adjustment as provided herein. In the case that additional Class A ordinary shares, or
equity-linked securities convertible or exercisable for Class A ordinary shares, are issued or deemed issued in excess of the amounts
issued in our Initial Public Offering and related to the closing of our business combination, the ratio at which Founder Shares will convert
into Class A ordinary shares will be adjusted (subject to waiver by holders of a majority of the Founder Shares then
in issue) so that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will
equal, in the aggregate, on an as-converted basis, 20% of the sum of our ordinary shares issued and outstanding plus the number of Class
A ordinary shares and equity-linked securities issued or deemed issued in connection with our business combination (net of redemptions),
excluding any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller in our business combination and
any private placement units issued to our sponsor, EarlyBirdCapital, or any of their respective officers, directors, or other affiliates.
This is different than certain other blank check companies in which the initial shareholders will only be issued an aggregate of 20% of
the total number of shares to be outstanding prior to our business combination.
Since our initial shareholders will lose their entire investment
in us if our business combination is not completed (other than with respect to any public shares they may acquire), a conflict of interest
may arise in determining whether a particular business combination target is appropriate for our business combination.
In
July 2021, our sponsor paid $25,000, or $0.009 per share, to cover certain offering and formation costs of the company in exchange for
2,875,000 Founder Shares. As such, our initial shareholders will collectively own approximately 20% of our issued and outstanding shares.
The Founder Shares will be worthless if we do not complete a business combination. In addition, in connection with our Initial Public
Offering and the Over-Allotment Option, our Sponsor and EarlyBirdCapital and their designees have in a private placement purchased an
aggregate of 545,000 private placement units (including 490,500 private placement units purchased by our Sponsor and 54,500 private placement
units purchased by EarlyBirdCapital) at $10.00 per unit, generating gross proceeds to us of approximately $5.5
million in the aggregate, that will also be worthless if we do not complete a business combination. Each whole private warrant contained
within the private placement units may be exercised for one Class A ordinary share at a price of $11.50 per share, subject to adjustment
as provided herein.
The Founder Shares are identical to the ordinary
shares included in the units except that: (1) prior to our business combination, only holders of the Founder Shares have the right to
vote on the appointment of directors and holders of a majority of our Founder Shares may remove a member of the board of directors for
any reason; (2) the Founder Shares are subject to certain transfer restrictions; (3) our initial shareholders have entered into a letter
agreement with us, pursuant to which they have agreed to waive: (x) their redemption rights with respect to their Founder Shares and any
public shares held by them in connection with the completion of our business combination (and not seek to sell its shares to us in any
tender offer we undertake in connection with our business combination); (y) their redemption rights with respect to their Founder Shares
and any public shares held by them in connection with a shareholder vote to approve an amendment to our amended and restated memorandum
and articles of association (A) that would affect our public shareholders’ ability to convert or sell their shares to us in connection
with a business combination as described herein or to modify the substance or timing of our obligation to redeem 100% of our public shares
if we do not complete our business combination within 18 months from the IPO Closing Date or (B) with respect to any other provision relating
to shareholders’ rights or pre-business combination activity; and (z) their rights to liquidating distributions from the Trust Account
with respect to any Founder Shares they hold if we fail to complete our business combination within 18 months from the IPO Closing Date
(although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if we
fail to complete our business combination within the prescribed time frame); (4) the Founder Shares will automatically convert into our
Class A ordinary shares on the first business day following the completion of our business combination on a one-for-one basis subject
to adjustment pursuant to certain anti-dilution rights and (5) the Founder Shares are entitled to registration rights. Our directors and
officers have also entered into the letter agreement with respect to public shares acquired by them, if any.
The personal and financial interests of our sponsor,
officers and directors may influence their motivation in identifying and selecting a target business combination, completing a business
combination and influencing the operation of the business following the business combination. This risk may become more acute as the 18
month deadline following the IPO Closing Date nears, which is the deadline for the completion of our business combination.
We may be able to complete only one business combination with
the proceeds of our Initial Public Offering and the sale of the private placement units, which will cause us to be solely dependent on
a single business which may have a limited number of products or services. This lack of diversification may negatively impact our operations
and profitability.
We may effectuate our business combination
with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be
able to effectuate our business combination with more than one target business because of various factors, including the existence
of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present
operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By
completing our business combination with only a single entity our lack of diversification may subject us to numerous economic,
competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit from the possible spreading
of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in
different industries or different areas of a single industry. Accordingly, the prospects for our success may be:
| · | solely dependent upon the performance of a single business, property or asset;
or |
| · | dependent upon the development or market acceptance of a single or limited
number of products, processes or services. |
This lack of diversification may subject us to
numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry
in which we may operate subsequent to our business combination.
We may attempt to simultaneously complete business combinations
with multiple prospective targets, which may hinder our ability to complete our business combination and give rise to increased costs
and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several
businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent
on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete
our business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs
with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks
associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating
business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our business combination with a private
company about which little information is available, which may result in a business combination with a company that is not as profitable
as we suspected, if at all.
In pursuing our acquisition strategy, we may seek
to effectuate our business combination with a privately held company. Very little public information generally exists about private companies,
and we could be required to make our decision on whether to pursue a potential business combination on the basis of limited information,
which may result in a business combination with a company that is not as profitable as we suspected, if at all.
Our management may not be able to maintain control of a target
business after our business combination. We cannot provide assurance that, upon loss of control of a target business, new management will
possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our business combination so that
the post-transaction company in which our public shareholders own shares will own less than 100% of the equity interests or assets of
a target business, but we will complete such business combination only if the post-transaction company owns or acquires 50% or more of
the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient
for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction
that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our shareholders
prior to our business combination may collectively own a minority interest in the post business combination company, depending on valuations
ascribed to the target and us in our business combination transaction. For example, we could pursue a transaction in which we issue a
substantial number of new Class A ordinary shares in exchange for all of the issued and outstanding capital stock, shares or other equity
interests of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial
number of new Class A ordinary shares, our shareholders immediately prior to such transaction could own less than a majority of our issued
and outstanding Class A ordinary shares subsequent to such transaction. In addition, other minority shareholders may subsequently combine
their holdings resulting in a single person or group obtaining a larger share of the company’s shares than we initially acquired.
Accordingly, this may make it more likely that our management will not be able to maintain our control of the target business.
We do not have a specified maximum redemption threshold. The
absence of such a redemption threshold may make it possible for us to complete a business combination with which a substantial majority
of our shareholders do not agree.
Our amended and restated memorandum and articles
of association will not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in
an amount that would cause our net tangible assets to be less than $5,000,001 either immediately prior to or upon completion of our business
combination (such that we do not then become subject to the SEC’s “penny stock” rules), or any greater net tangible
asset or cash requirement that may be contained in the agreement relating to our business combination. As a result, we may be able to
complete our business combination even though a substantial majority of our public shareholders do not agree with the transaction and
have redeemed their shares or, if we seek shareholder approval of our business combination and do not conduct redemptions in connection
with our business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares
to our sponsor, officers, directors, or any of their affiliates. In the event the aggregate cash consideration we would be required to
pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant
to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business
combination or redeem any shares, all Class A ordinary shares submitted for redemption will be returned to the holders thereof, and we
instead may search for an alternate business combination.
In order to effectuate a business combination, blank check companies
have, in the past, amended various provisions of their charters and modified governing instruments. We cannot assure you that we will
not seek to amend our amended and restated memorandum and articles of association or governing instruments, in a manner that will make
it easier for us to complete our business combination that some of our shareholders may not support.
In order to effectuate a business combination,
blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments. For example,
blank check companies have amended the definition of business combination, increased redemption thresholds and extended the time to consummate
a business combination. Amending our amended and restated memorandum and articles of association will require at least a special resolution
of our shareholders as a matter of Cayman Islands law. A resolution is deemed to be a special resolution as a matter of Cayman Islands
law where it has been approved by either (1) at least two-thirds (or any higher threshold specified in a company’s articles of association)
of a company’s shareholders at a general meeting for which notice specifying the intention to propose the resolution as a special
resolution has been given or (2) if so authorized by a company’s articles of association, by a unanimous written resolution of all
of the company’s shareholders. Our amended and restated memorandum and articles of association will provide that special resolutions
must be approved either by at least two-thirds of our shareholders who attend and vote at a general meeting (i.e., the lowest threshold
permissible under Cayman Islands law) (other than amendments relating to the appointment or removal of directors prior to our business
combination, which require the approval of at least 90% of our ordinary shares voting in a general meeting), or by a unanimous written
resolution of all of our shareholders. We cannot assure you that we will not seek to amend our amended and restated memorandum and articles
of association or governing instruments or extend the time to consummate a business combination in order to effectuate our business combination.
The provisions of our amended and restated memorandum and articles
of association that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release
of funds from our Trust Account) may be amended with the approval of holders of at least two-thirds of our ordinary shares who attend
and vote at a general meeting, which is a lower amendment threshold than that of some other blank check companies. It may be easier for
us, therefore, to amend our amended and restated memorandum and articles of association and the trust agreement to facilitate the completion
of a business combination that some of our shareholders may not support.
Some other blank check companies have a
provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to a
company’s pre-business combination activity, without approval by holders of a certain percentage of the company’s
shares. In those companies, amendment of these provisions typically requires approval by holders holding between 90% and 100% of the
company’s public shares. Our amended and restated memorandum and articles of association will provide that any of its
provisions, including those related to pre-business combination activity (including the requirement to deposit proceeds of our
Initial Public Offering and the private placement of warrants into the Trust Account and not release such amounts except in
specified circumstances), may generally be amended if approved by holders of at least two-thirds of our ordinary shares who attend
and vote in a general meeting, and corresponding provisions of the trust agreement governing the release of funds from our Trust
Account may be amended if approved by holders of 65% of our ordinary shares (other than amendments relating to the appointment or
removal of directors prior to our business combination, which require the approval of at least 90% of our ordinary shares voting in
a general meeting). Our initial shareholders, who will collectively beneficially own approximately 20% of our ordinary shares upon
the IPO Closing Date (excluding the shares contained within the private placement units and EBC Founder Shares), may participate in
any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the
discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated
memorandum and articles of association which govern our pre-business combination behavior more easily than some other blank check
companies, and this may increase our ability to complete our business combination with which you do not agree. However, our amended
and restated memorandum and articles of association prohibits any amendment of its provisions (A) that would affect our public
shareholders’ ability to convert or sell their shares to us in connection with a business combination as described herein or
to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our business
combination within 18 months from the IPO Closing Date or (B) with respect to any other provision relating to shareholders’
rights or pre-business combination activity, unless we provide public shareholders with the opportunity to redeem their public
shares. Furthermore, our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not
propose such an amendment unless we provide our public shareholders with the opportunity to redeem their public shares. In certain
circumstances, our shareholders may pursue remedies against us for any breach of our amended and restated memorandum and articles of
association.
Certain agreements related to our Initial Public Offering may
be amended without shareholder approval.
Each of the agreements related to our Initial Public
Offering to which we are a party, other than the warrant agreements and the investment management trust agreement, may be amended without
shareholder approval. These agreements contain various provisions that our public shareholders might deem to be material. For example,
our letter agreement and the underwriting agreement contain certain lock-up provisions with respect to the Founder Shares, private placement
units and other securities held by our initial shareholders, officers and directors.
Amendments to such agreements would require the
consent of the applicable parties thereto and would need to be approved by our board of directors, which may do so for a variety of reasons,
including to facilitate our business combination. While we do not expect our board of directors to approve any amendment to any of these
agreements prior to our business combination, it may be possible that our board of directors, in exercising its business judgment and
subject to its fiduciary duties, chooses to approve one or more amendments to any such agreement. Any material amendment entered into
in connection with the completion of our business combination will be disclosed in our proxy solicitation or tender offer materials, as
applicable, related to such business combination, and any other material amendment to any of our material agreements will be disclosed
in a filing with the SEC. Any such amendments would not require approval from our shareholders, may result in the completion of our business
combination that may not otherwise have been possible, and may have an adverse effect on the value of an investment in our securities.
For example, amendments to the lock-up provision discussed above may result in our initial shareholders selling their securities earlier
than they would otherwise be permitted, which may have an adverse effect on the price of our securities.
We may be unable to obtain additional financing to complete our
business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular
business combination.
Although we believe that the net proceeds of
our Initial Public Offering and the sale of the private placement units will be sufficient to allow us to complete our business
combination, because we have not yet selected any target business we cannot ascertain the capital requirements for any particular
transaction. If the net proceeds of our Initial Public Offering and the sale of the private placement units prove to be
insufficient, either because of the size of our business combination, the depletion of the available net proceeds in search of a
target business, the obligation to redeem for cash a significant number of shares from shareholders who elect redemption in
connection with our business combination or the terms of negotiated transactions to purchase shares in connection with our business
combination, we may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you
that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be
unavailable when needed to complete our business combination, we would be compelled to either restructure the transaction or abandon
that particular business combination and seek an alternative target business candidate. In addition, even if we do not need
additional financing to complete our business combination, we may require such financing to fund the operations or growth of the
target business. The failure to secure additional financing could have a material adverse effect on the continued development or
growth of the target business. None of our officers, directors or shareholders is required to provide any financing to us in
connection with or after our business combination. If we are unable to complete our business combination, our public shareholders
may receive only approximately $10.10 per share, or less in certain circumstances, on the liquidation of our Trust Account, and our
warrants will expire worthless.
Risks Relating to Our Securities
If we are unable to consummate our business combination within
18 months of the IPO Closing Date, our public shareholders may be forced to wait beyond such 18 months before redemption from our Trust
Account.
If we are unable to consummate our business combination
within 18 months from the IPO Closing Date, we will distribute the aggregate amount then on deposit in the Trust Account, including interest
(less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), pro rata to our public
shareholders by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described
herein. Any redemption of public shareholders from the Trust Account shall be effected automatically by function of our amended and restated
memorandum and articles of association prior to any voluntary winding up. If we are required to windup, liquidate the Trust Account and
distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation
and distribution must comply with the applicable provisions of the Companies Act. In that case, investors may be forced to wait beyond
the initial 18 months before the redemption proceeds of our Trust Account become available to them and they receive the return of their
pro rata portion of the proceeds from our Trust Account. We have no obligation to return funds to investors prior to the date of our redemption
or liquidation unless, prior thereto, we consummate our business combination or amend certain provisions of our amended and restated memorandum
and articles of association and then only in cases where investors have properly sought to redeem their Class A ordinary shares. Only
upon our redemption or any liquidation will public shareholders be entitled to distributions if we are unable to complete our business
combination and do not amend certain provisions of our amended and restated memorandum and articles of association prior thereto.
Subsequent to our completion of our business combination, we
may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative
effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of
your investment.
Even if we conduct extensive due diligence on a
target business with which we combine, we cannot assure you that this diligence will identify all material issues that may be present
with a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence,
or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be
forced to later write down or write off assets, restructure our operations, or incur impairment or other charges that could result in
our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known
risks may materialize in a manner not consistent with our preliminary risk analysis. Although these charges may be non-cash items and
not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions
about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be
subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing.
Accordingly, any shareholder or warrant holder who chooses to remain a shareholder or warrant holder following our business combination
could suffer a reduction in the value of their securities. Such shareholders and warrant holders are unlikely to have a remedy for such
reduction in value.
If third parties bring claims against us, the proceeds held in
the Trust Account could be reduced and the per-share redemption amount received by shareholders may be less than $10.10 per share.
Our placing of funds in the Trust Account may
not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than
our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us
waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public
shareholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from
bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility
or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage
with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute an
agreement waiving such claims to the monies held in the Trust Account, our management will perform an analysis of the alternatives
available to it and will enter into an agreement with a third party that has not executed a waiver only if management believes that
such third party’s engagement would be significantly more beneficial to us than any alternative.
Examples of possible instances where we may engage
a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills
are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases
where we are unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will
agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with
us and will not seek recourse against the Trust Account for any reason. Upon redemption of our public shares, if we are unable to complete
our business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our business combination,
we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years
following redemption. Accordingly, the per-share redemption amount received by public shareholders could be less than the $10.10 per share
initially held in the Trust Account, due to claims of such creditors.
Our sponsor has agreed that it will be liable to
us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us,
or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the
Trust Account, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account
and except as to any claims under our indemnity of the underwriters of our Initial Public Offering against certain liabilities, including
liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party,
our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether
our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities
of our company. Accordingly, our sponsor may not have sufficient funds available to satisfy those obligations. We have not asked our sponsor
to reserve for such obligations, and therefore, no funds are currently set aside to cover any such obligations. As a result, if any such
claims were successfully made against the Trust Account, the funds available for our business combination and redemptions could be reduced
to less than $10.10 per public share. In such event, we may not be able to complete our business combination, and you would receive such
lesser amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for
claims by third parties including, without limitation, claims by vendors and prospective target businesses.
The securities in which we invest the funds held in the Trust
Account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption
amount received by public shareholders may be less than $10.10 per share.
The proceeds held in the Trust Account will be
held as cash or invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing
solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. While short-term U.S. government
treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central
banks in Asia and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not
ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we are unable to complete
our business combination or make certain amendments to our amended and restated certificate of incorporation, our public shareholders
are entitled to receive their pro-rata share of the proceeds held in the Trust Account, plus any interest income, net of taxes paid or
payable (less, in the case we are unable to complete our business combination, $100,000 of interest). Negative interest rates could reduce
the value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.10
per share.
Our directors may decide not to enforce the indemnification obligations
of our sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to our public shareholders.
In the event that the proceeds in the Trust Account
are reduced and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related
to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification
obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce
its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose
not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount
of funds in the Trust Account available for distribution to our public shareholders may be reduced below $10.10 per share.
If, after we distribute the proceeds in the Trust Account to
our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against
us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed
as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of
punitive damages.
If, after we distribute the proceeds in the Trust
Account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is
filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or
insolvency laws as a voidable performance. As a result, a liquidator could seek to recover some or all amounts received by our shareholders.
In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith
by paying public shareholders from the Trust Account prior to addressing the claims of creditors, thereby exposing itself and us to claims
of punitive damages.
If, before distributing the proceeds in the Trust
Account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is
filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders
and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the Trust
Account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is
filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable insolvency law, and may
be included in our liquidation estate and subject to the claims of third parties with priority over the claims of our shareholders. To
the extent any liquidation claims deplete the Trust Account, the per-share amount that would otherwise be received by our shareholders
in connection with our liquidation would be reduced.
Our shareholders may be held liable for claims by third parties
against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an insolvent liquidation,
any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date
on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result,
a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors may be viewed as having
breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, and thereby exposing themselves and our company
to claims, by paying public shareholders from the Trust Account prior to addressing the claims of creditors. We cannot assure you that
claims will not be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted
any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course
of business would be guilty of an offence and may be liable to a fine of up to $18,293 and to imprisonment for five years in the Cayman
Islands.
We may not hold an annual general meeting of shareholders until
after the completion of our business combination. Our public shareholders will not have the right to appoint directors prior to the consummation
of our business combination.
In accordance with Nasdaq corporate
governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our
listing on Nasdaq. There is no requirement under the Companies Act for us to hold annual or general meetings to appoint directors.
Until we hold an annual general meeting of shareholders, public shareholders may not be afforded the opportunity to discuss company
affairs with management. As holders of our Class A ordinary shares, our public shareholders also will not have the right to vote on
the appointment of directors prior to completion of our business combination. Our board of directors is divided into three classes
with only one class of directors being appointed in each year and each class (except for those directors appointed prior to our
first annual meeting of shareholders) serving a 3-year term. In addition, holders of a majority of our Founder Shares may remove a
member of the board of directors for any reason.
Holders of Class A ordinary shares will not be entitled to vote
on any appointment of directors we hold prior to our business combination.
Prior to our business combination, only holders
of our Founder Shares have the right to vote on the appointment of directors. Holders of our public shares will not be entitled to vote
on the appointment of directors during such time. In addition, prior to our business combination, holders of a majority of our Founder
Shares may remove a member of the board of directors for any reason. Accordingly, you may not have any say in the management of the company
prior to the consummation of a business combination.
The warrants may become exercisable and redeemable for a security
other than the Class A ordinary shares, and you will not have any information regarding such other security at this time.
In certain situations, including if we are not
the surviving entity in our business combination, the warrants may become exercisable for a security other than the Class A ordinary shares.
As a result, if the surviving company redeems your warrants for securities pursuant to the warrant agreements, you may receive a security
in a company of which you do not have information at this time. Pursuant to the warrant agreements, the surviving company will be required
to use commercially reasonable efforts to register the issuance of the security underlying the warrants within 20 business days of the
closing of a business combination.
The grant of registration rights to our sponsor and EarlyBirdCapital
may make it more difficult to complete our business combination, and the future exercise of such rights may adversely affect the market
price of our Class A ordinary shares.
Our sponsor and its permitted transferees may exercise
their registration rights and demand that we register the private placement units, their component parts and securities underlying those
component parts, and holders of units that may be issued upon conversion of working capital loans may demand that we register such units,
their component parts and securities underlying those component parts. We will bear the cost of registering these securities. The registration
and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market
price of our Class A ordinary shares. In addition, the existence of the registration rights may make our business combination more costly
or difficult to conclude. This is because the shareholders of the target business may increase the equity stake they seek in the combined
entity or ask for more cash consideration to offset the negative impact on the market price of our securities that is expected when the
securities owned by our sponsor or its permitted transferees are registered for resale.
Because we are not limited to a particular industry or any specific
target businesses with which to pursue our business combination, you will be unable to ascertain the merits or risks of any particular
target business’s operations.
We may consummate a business combination with a
company in any location or industry we choose and are not limited to any particular industry, location or type of business. However, our
amended and restated memorandum and articles of association provides that we shall not undertake our business combination with any entity
that is based in, located in or with its principal business operations in China (including Hong Kong and Macau). Accordingly, there is
no current basis for you to evaluate the possible merits or risks of the particular industry in which we may ultimately operate or the
target business which we may ultimately acquire. To the extent we complete a business combination with a financially unstable company
or an entity in its early stages of development or growth, we may be affected by numerous risks inherent in the business operations of
those entities. If we complete a business combination with an entity in an industry characterized by a high level of risk, we may be affected
by the currently unascertainable risks of that industry. Although our management will endeavor to evaluate the risks inherent in a particular
industry or target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors. We also
cannot assure you that an investment in our units will not ultimately prove to be less favorable to our investors than a direct investment,
if an opportunity were available, in a target business.
Our warrant agreements and rights agreement will designate the
courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum
for certain types of actions and proceedings that may be initiated by holders of our warrants and rights, respectively, which could limit
the ability of warrant or rights holders to obtain a favorable judicial forum for disputes with our company.
Our warrant agreements and rights agreement will
provide that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant
agreements, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States
District Court for the Southern District of New York, (ii) any action, proceeding or claim against us arising out of or relating in any
way to the rights agreement will be brought and enforced in the courts of the State of New York or the United States District Court for
the Southern District of New York and (iii) in each case, we irrevocably submit to such jurisdiction, which jurisdiction shall be the
exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum.
Notwithstanding the foregoing, these provisions
of the warrant agreements and rights agreement will not apply to suits brought to enforce any liability or duty created by the Exchange
Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person
or entity purchasing or otherwise acquiring any interest in any of our warrants or rights, as applicable, shall be deemed to have notice
of and to have consented to the forum provisions in our warrant agreements or rights agreement, as applicable. If any action, the subject
matter of which is within the scope the forum provisions of the warrant agreements or rights agreement, as applicable, is filed in a court
other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign
action”) in the name of any holder of our warrants or rights, as applicable, such holder shall be deemed to have consented to: (x)
the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any
such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant
holder or rights holder, as applicable, in any such enforcement action by service upon such warrant holder’s or rights holder’s
counsel in the foreign action as agent for such warrant holder or rights holder, as applicable. We note, however, that there is uncertainty
as to whether a court would enforce this provision and that investors cannot waive compliance with the federal securities laws and the
rules and regulations thereunder.
This choice-of-forum provision may limit a warrant
or right holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may
discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreements or rights agreement to be inapplicable
or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated
with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and
results of operations and result in a diversion of the time and resources of our management and board of directors.
We may issue additional Class A ordinary shares or preference
shares to complete our business combination or under an employee incentive plan after completion of our business combination. We may also
issue Class A ordinary shares upon the conversion of the Founder Shares at a ratio greater than one-to-one at the time of our business
combination as a result of the anti-dilution provisions contained in our amended and restated memorandum and articles of association.
Any such issuances would substantially dilute the interest of our shareholders and likely present other risks.
Our amended and restated memorandum and articles
of association will authorize the issuance of ordinary shares, including 180,000,000 Class A ordinary shares, par value $0.0001 per share,
and 20,000,000 Class B ordinary shares, par value $0.0001 per share, as well as 1,000,000 preference shares, par value $0.0001. There
are 162,850,000 (including the EBC Founder Shares) authorized but unissued Class A ordinary shares, 15,125,000 authorized but unissued
Class B ordinary shares, and 1,000,000 authorized but unissued preference shares available for issuance. Such amounts do not take into
account the Class A ordinary shares reserved for issuance upon both the (i) conversion of the issued and outstanding Founder Shares and
(ii) exercise of outstanding warrants (including the private warrants) and (iii) the Class A ordinary shares underlying the rights.
We may issue a substantial number of
additional Class A ordinary shares, and may issue preference shares, in order to complete our business combination or under an
employee incentive plan after completion of our business combination. We may also issue Class A ordinary shares upon conversion of
the Class B ordinary shares at a ratio greater than one-to-one at the time of our business combination as a result of the
anti-dilution provisions as set forth herein. However, our amended and restated memorandum and articles of association will provide,
among other things, that prior to our business combination, we may not issue additional shares that would entitle the holders
thereof to (1) receive funds from the Trust Account or (2) vote as a class with our public shares on any business combination. The
issuance of additional ordinary shares or preference shares:
| · | may significantly dilute the equity interest of our investors; |
| · | may subordinate the rights of holders of Class A ordinary shares if preference
shares are issued with rights senior to those afforded our Class A ordinary shares; |
| · | could cause a change in control if a substantial number of Class A ordinary
shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result
in the resignation or removal of our present officers and directors; and |
| · | may adversely affect prevailing market prices for our units, Class A ordinary
shares and/or warrants. |
If a shareholder fails to receive notice of our offer to redeem
our public shares in connection with our business combination, or fails to comply with the procedures for tendering its shares, such shares
may not be redeemed.
We will comply with the tender offer rules or proxy
rules, as applicable, when conducting redemptions in connection with our business combination. Despite our compliance with these rules,
if a shareholder fails to receive our tender offer or proxy materials, as applicable, such shareholder may not become aware of the opportunity
to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that we will furnish to holders of our
public shares in connection with our business combination will describe the various procedures that must be complied with in order to
validly tender or redeem public shares. In the event that a shareholder fails to comply with these procedures, its shares may not be redeemed.
See “Item 1. Business — Effecting Our Initial Business Combination — Tendering share certificates
in connection with a tender offer or redemption rights.”
You will not have any rights or interests in funds from the Trust
Account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares
or warrants, potentially at a loss.
Our public shareholders will be entitled to receive
funds from the Trust Account only upon the earliest to occur of: (1) the completion of our business combination, and then only in connection
with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein, (2)
the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum
and articles of association (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete
our business combination within 18 months from the IPO Closing Date or (B) with respect to any other provision relating to shareholders’
rights or pre-business combination activity and (3) the redemption of our public shares if we are unable to complete our business combination
within 18 months from the IPO Closing Date, subject to applicable law and as further described herein. In no other circumstances will
a shareholder have any right or interest of any kind in the Trust Account. Holders of warrants will not have any right to the proceeds
held in the Trust Account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public
shares or warrants, potentially at a loss.
Nasdaq may delist our securities from its exchange, which could
limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
Our units, public shares, public warrants and public
rights are all listed on the Nasdaq and our public shares, public warrants and public rights are eligible to trade separately. Although
we meet Nasdaq’s minimum initial listing standards, which generally only require that we meet certain requirements relating to shareholders’
equity, market capitalization, aggregate market value of publicly held shares and distribution requirements, we cannot assure you that
our securities will be, or will continue to be, listed on Nasdaq in the future or prior to our business combination. In order to continue
listing our securities on Nasdaq prior to our business combination, we must maintain certain financial, distribution and share price levels.
Additionally, in connection with our business combination, it is likely that Nasdaq will require us to file a new initial listing application
and meet its initial listing requirements as well as certain qualitative requirements, as opposed to its more lenient continued listing
requirements. We cannot assure you that we will be able to meet those initial listing requirements at that time.
If Nasdaq delists any of our securities from trading
on its exchange and we are not able to list such securities on another national securities exchange, we expect such securities could be
quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
| · | a limited availability of market quotations for our securities; |
| · | reduced liquidity with respect to such securities; |
| · | a determination that our Class A ordinary shares are a “penny stock”
which will require brokers trading in our Class A ordinary shares to adhere to more stringent rules, possibly resulting in a reduced level
of trading activity in the secondary trading market for our securities; |
| · | a limited amount of news and analyst coverage for our company; and |
| · | a decreased ability to issue additional securities or obtain additional
financing in the future. |
The National Securities Markets Improvement Act
of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred
to as “covered securities.” Because are securities listed on Nasdaq, our units, Class A ordinary shares, rights and warrants
qualify as covered securities under such statute. Although the states are preempted from regulating the sale of covered securities, the
federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent
activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were no longer listed
on Nasdaq, our securities would not qualify as covered securities under such statute and we would be subject to regulation in each state
in which we offer our securities.
We expect to need to comply with the rules of Nasdaq that require
our business combination to occur with one or more target businesses having an aggregate fair market value equal to at least 80% of the
assets held in the Trust Account at the time of the agreement to enter into the business combination.
The rules of Nasdaq require that our business combination
occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the Trust
Account (excluding taxes payable on the income earned on the Trust Account) at the time of the agreement to enter into the business combination.
This restriction may limit the type and number of companies that we may complete a business combination with. If we are unable to locate
a target business or businesses that satisfy this fair market value test, our public shareholders may receive only approximately $10.10
per share, or less in certain circumstances, on the liquidation of our Trust Account, and our warrants will expire worthless. If we are
not then listed on Nasdaq for whatever reason, we would not be required to satisfy the foregoing 80% fair market value test and could
complete a business combination with a target business having a fair market value substantially below 80% of the balance in the Trust
Account. Additionally, pursuant to Nasdaq rules, any business combination must be approved by a majority of our independent directors.
You will not be entitled to protections normally afforded to
investors of many other blank check companies.
Since the net proceeds of our Initial Public Offering
and the sale of the private placement units are intended to be used to complete a business combination with a target business that has
not been identified, we may be deemed to be a “blank check” company under the U.S. securities laws. However, because we have
net tangible assets in excess of $5,000,000, we are exempt from rules promulgated by the SEC to protect investors in blank check companies,
such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means
our units will be immediately tradable. Moreover, if our Initial Public Offering were subject to Rule 419, that rule would prohibit the
release of any interest earned on funds held in the Trust Account to us unless and until the funds in the Trust Account were released
to us in connection with our completion of a business combination.
If we seek shareholder approval of our business combination and
we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders are deemed to hold
in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 15% of our Class A ordinary
shares.
If we seek shareholder approval of our
business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer
rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any
affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group”
(as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an
aggregate of 15% of the public shares, which we refer to as the “Excess Shares,” without our prior consent. However, we
would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our
business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our
business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market
transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our
business combination. And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of
such shares, would be required to sell your shares in open market transactions, potentially at a loss.
We may issue notes or other debt securities, or otherwise incur
substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively
impact the value of our shareholders’ investment in us.
Although we have no commitments as of the date
of this Annual Report to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial
debt to complete our business combination. We have agreed that we will not incur any indebtedness unless we have obtained from the lender
a waiver of any right, title, interest or claim of any kind in or to the monies held in the Trust Account. As such, no issuance of debt
will affect the per-share amount available for redemption from the Trust Account. Nevertheless, the incurrence of debt could have a variety
of negative effects, including:
| · | default and foreclosure on our assets if our operating revenues after a business
combination are insufficient to repay our debt obligations; |
| · | acceleration of our obligations to repay the indebtedness even if we make
all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or
reserves without a waiver or renegotiation of that covenant; |
| · | our immediate payment of all principal and accrued interest, if any, if the
debt is payable on demand; |
| · | our inability to obtain necessary additional financing if the debt contains
covenants restricting our ability to obtain such financing while the debt security is outstanding; |
| · | our inability to pay dividends on our Class A ordinary shares; |
| · | using a substantial portion of our cash flow to pay principal and interest
on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital expenditures,
acquisitions and other general corporate purposes; |
| · | limitations on our flexibility in planning for and reacting to changes in
our business and in the industry in which we operate; |
| · | increased vulnerability to adverse changes in general economic, industry
and competitive conditions and adverse changes in government regulation; and |
| · | limitations on our ability to borrow additional amounts for expenses, capital
expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to
our competitors who have less debt. |
Our initial shareholders will control the appointment of our
board of directors until completion of our business combination and will hold a substantial interest in us. As a result, they will appoint
all of our directors prior to our business combination and may exert a substantial influence on actions requiring shareholder vote, potentially
in a manner that you do not support.
Upon the IPO Closing Date, our initial shareholders
will own approximately 20% of our issued and outstanding ordinary shares (excluding the shares contained within the private placement
units and EBC Founder Shares). In addition, prior to our business combination, only the Founder Shares, all of which are held by our initial
shareholders, have the right to vote on the appointment of directors, and holders of a majority of our Founder Shares may remove a member
of the board of directors for any reason.
Neither our initial shareholders nor, to our
knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed
in this Annual Report. Factors that would be considered in making such additional purchases would include consideration of the
current trading price of our Class A ordinary shares. In addition, as a result of their substantial ownership in our company, our
initial shareholders may exert a substantial influence on other actions requiring a shareholder vote, potentially in a manner that
you do not support, including amendments to our amended and restated memorandum and articles of association and approval of major
corporate transactions. If our initial shareholders purchase any Class A ordinary shares in the market or in privately negotiated
transactions, this would increase their influence over these actions. In addition, our board of directors, whose members are elected
by our initial shareholders, is and will be divided into three classes, each of which will generally serve for term of three years
with only one class of directors being elected in each year. We may not hold an annual meeting of shareholders to appoint new
directors prior to the completion of our business combination, in which case all of the current directors will continue in office
until at least the completion of the business combination. If there is an annual meeting, as a consequence of our
“staggered” board of directors, only a minority of the board of directors will be considered for appointment and our
initial shareholders, because of their ownership position, will control the outcome, as only holders of our Founder Shares have
the right to vote on the appointment of directors and to remove directors prior to our business combination. Accordingly, our
initial shareholders will exert significant influence over actions requiring a shareholder vote at least until the completion of our
business combination.
Our sponsor paid an aggregate of $25,000, or $0.009 per Founder
Share, and, accordingly, you will experience immediate and substantial dilution upon the purchase of our Class A ordinary shares.
The difference between the public offering price
per share (allocating all of the unit purchase price to the Class A ordinary shares and none to the warrant included in the unit) and
the net tangible book value per Class A ordinary share constitutes the dilution to you and our other investors. Our initial shareholders
acquired their shares at a nominal price, significantly contributing to this dilution. At the IPO Closing Date, and assuming no value
is ascribed to the warrants included in the units, you and the other public shareholders incurred an immediate and substantial dilution
of approximately 100.0% or $10.00 per share, the difference between the pro forma net tangible book value per share after our Initial
Public Offering of $0.009 and the initial offering price of $10.00 per unit. This dilution would increase to the extent that the anti-dilution
provisions of the Founder Shares result in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion
of the Founder Shares at the time of our business combination and would become exacerbated to the extent that public shareholders seek
redemptions from the trust for their public shares. In addition, because of the anti-dilution protection in the Founder Shares, any equity
or equity-linked securities issued in connection with our business combination would be disproportionately dilutive to our Class A ordinary
shares.
We may be a passive foreign investment company, or “PFIC,”
which could result in adverse United States federal income tax consequences to U.S. investors.
If we are a PFIC for any taxable year (or portion
thereof) that is included in the holding period of a U.S. Holder of our Class A ordinary shares, rights or warrants, the U.S. Holder may
be subject to adverse United States federal income tax consequences and may be subject to additional reporting requirements. Our PFIC
status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception. Depending on the
particular circumstances, the application of the start-up exception may be subject to uncertainty, and there cannot be any assurance that
we will qualify for the start-up exception. Accordingly, there can be no assurances with respect to our status as a PFIC for our current
taxable year or any subsequent taxable year. Our actual PFIC status for any taxable year, moreover, will not be determinable until after
the end of such taxable year. If we determine we are a PFIC for any taxable year (of which there can be no assurance), we will endeavor
to provide to a U.S. Holder such information as the Internal Revenue Service (“IRS”) may require, including a PFIC annual
information statement, in order to enable the U.S. Holder to make and maintain a “qualified electing fund” election, but there
can be no assurance that we will timely provide such required information, and such election would be unavailable in all cases with respect
to our warrants and possibly also with respect to our rights. We urge U.S. investors to consult their own tax advisors regarding the possible
application of the PFIC rules.
Because we must furnish our shareholders with target business
financial statements, we may lose the ability to complete an otherwise advantageous business combination with some prospective target
businesses.
The federal proxy rules require that a proxy
statement with respect to a vote on a business combination meeting certain financial significance tests include historical and/or
pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in connection
with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be
required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of
America, or U.S. GAAP, or international financing reporting standards as issued by the International Accounting Standards Board, or
IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the
standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may
limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements
in time for us to disclose such financial statements in accordance with federal proxy rules and complete our business combination
within the prescribed time frame.
Trading in our securities may be prohibited under the Holding
Foreign Companies Accountable Act if the PCAOB determines that it cannot inspect or fully investigate our auditor. In that case, Nasdaq
would delist our securities. The delisting of our securities, or the threat of their being delisted, may materially and adversely affect
the value of your investment. Additionally, the inability of the PCAOB to conduct inspections may deprive our investors with the benefits
of such inspections.
The Holding Foreign Companies Accountable Act,
or the HFCAA, was enacted on December 18, 2020. The HFCAA states if the SEC determines that we have filed audit reports issued by a registered
public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall
prohibit our shares or other securities from being traded on a national securities exchange or in the over the counter trading market
in the U.S.
Our current auditor, the independent registered
public accounting firm that issues the audit report included elsewhere in this Annual Report, as an auditor of companies that are traded
publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB
conducts regular inspections to assess its compliance with the applicable professional standards. However, if it is later determined that
the PCAOB is unable to inspect or investigate completely our auditor because of a position taken by an authority in a foreign jurisdiction,
Nasdaq would delist our securities, including our units, ordinary shares, rights and public warrants, and the SEC shall prohibit them
from being traded on a national securities exchange or in the over the counter trading market in the U.S. If our securities are delisted
and prohibited from being traded on a national securities exchange or in the over the counter trading market in the U.S. due to the PCAOB
not being able to conduct inspections or full investigations of our auditor, it would substantially impair your ability to sell or purchase
our securities when you wish to do so, and the risk and uncertainty associated with potential delisting and prohibition would have a negative
impact on the price of our securities. Also, such delisting and prohibition could significantly affect the Company’s ability to
raise capital on acceptable terms, or at all, which would have a material adverse effect on the Company’s business, financial condition
and prospects.
On March 24, 2021, the SEC adopted interim final
rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA. We will be required to comply
with these rules if the SEC identifies us as having a “non-inspection” year under a process to be subsequently established
by the SEC. On June 22, 2021, the U.S. Senate passed a bill which, if passed by the U.S. House of Representatives and signed into law,
would reduce the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years
to two. The SEC is assessing how to implement other requirements of the HFCAA, including the listing and trading prohibition requirements
described above.
On June 22, 2021, the U.S. Senate passed the Accelerating
Holding Foreign Companies Accountable Act which, if signed into law, would amend the HFCAA and require the SEC to prohibit an issuer’s
securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead
of three consecutive years.
On November 5, 2021, the SEC approved the PCAOB’s
Rule 6100, Board Determinations Under the Holding Foreign Companies Accountable Act. Rule 6100 provides a framework for the PCAOB to use
when determining, as contemplated under the HFCAA, whether it is unable to inspect or investigate completely registered public accounting
firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.
On December 2, 2021, the SEC issued
amendments to finalize rules implementing the submission and disclosure requirements in the Holding Foreign Companies Accountable
Act. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a
registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate
completely because of a position taken by an authority in foreign jurisdictions. The SEC may propose additional rules or guidance
that could impact us if our auditor is not subject to PCAOB inspection.
On December 16, 2021, the PCAOB issued a Determination
Report which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in:
(i) China, and (ii) Hong Kong. Our auditor, UHY LLP, headquartered in New York, NY, is an independent registered public accounting firm
with the PCAOB and has been inspected by the PCAOB on a regular basis. The PCAOB currently has access to inspect the working papers of
our auditor. Our auditor is not headquartered in China or Hong Kong and was not identified in this report as a firm subject to the PCAOB’s
determination.
The SEC has announced that the SEC staff is preparing
a consolidated proposal for the rules regarding the implementation of the HFCAA. It is unclear when the SEC will complete its rulemaking
and when such rules will become effective. The SEC has also announced amendments to various annual report forms to accommodate the certification
and disclosure requirements of the HFCAA. There could be additional regulatory or legislative requirements or guidance that could impact
us if our auditor is not subject to PCAOB inspection. The implications of these possible regulations in addition to the requirements of
the HFCAA are uncertain, and such uncertainty could cause the market price of our securities to be materially and adversely affected.
If, for whatever reason, the PCAOB is unable to conduct inspections or full investigations of our auditor, the Company could be delisted
or prohibited from being traded over the counter earlier than would be required by the HFCAA. If our securities are unable to be listed
on another securities exchange by then, such delisting and prohibition would substantially impair your ability to sell or purchase our
securities when you wish to do so, and the risk and uncertainty associated with potential delisting and prohibition would have a negative
impact on the price of our securities. Also, such delisting and prohibition could significantly affect the Company’s ability to
raise capital on acceptable terms, or at all, which would have a material adverse effect on the Company’s business, financial condition
and prospects.
Inspections of audit firms that the PCAOB has conducted
have identified deficiencies in those firms’ audit procedures and quality control procedures, which may be addressed as part of
the inspection process to improve future audit quality. If the PCAOB were unable to conduct inspections or full investigations of the
Company’s auditor, investors in our securities would be deprived of the benefits of such PCAOB inspections. In addition, the inability
of the PCAOB to conduct inspections or full investigations of auditors would may make it more difficult to evaluate the effectiveness
of the Company’s independent registered public accounting firm’s audit procedures or quality control procedures as compared
to auditors that are subject to the PCAOB inspections, which could cause investors and potential investors in our stock to lose confidence
in the audit procedures of our auditor and reported financial information and the quality of our financial statements.
Compliance obligations under the Sarbanes-Oxley Act may make
it more difficult for us to effectuate our business combination, require substantial financial and management resources, and increase
the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act requires
that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the fiscal year ending
December 31, 2023.
Only in the event we are deemed to be a large accelerated
filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent
registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank
check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public
companies because a target business with which we seek to complete our business combination may not be in compliance with the provisions
of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve
compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
Provisions in our amended and restated memorandum and articles
of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class
A ordinary shares and could entrench management.
Our amended and restated memorandum and
articles of association will contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to
be in their best interests. These provisions include 3-year director terms and the ability of the board of directors to designate
the terms of and issue new series of preference shares, which may make more difficult the removal of management and may discourage
transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
We will be subject to changing law and regulations regarding
regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.
We will be subject to rules and regulations of
various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies
whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new
and changing laws and regulations are likely to continue to result in increased general and administrative expenses and a diversion of
management time and attention from our search for a business combination target to compliance activities.
Moreover, because these laws, regulations and standards
are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution
may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure
and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty
and our business may be harmed.
Resources could be wasted in researching acquisitions that are
not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we
are unable to complete our business combination, our public shareholders may receive only approximately $10.10 per share, or less than
such amount in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
We anticipate that the investigation of each specific
target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require
substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a
specific business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore,
if we reach an agreement relating to a specific target business, we may fail to complete our business combination for any number of reasons
including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely
affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our business combination,
our public shareholders may receive only approximately $10.10 per share, or less in certain circumstances, on the liquidation of our Trust
Account and our warrants will expire worthless.
We may amend the terms of the rights in a manner that may be
adverse to holders with the approval by the holders of at least a majority of the then outstanding rights.
Our rights will be issued in registered form under
a rights agreement between Continental Stock Transfer & Trust Company, as rights agent, and us. The rights agreement provides that
the terms of the rights may be amended without the consent of any holder to cure any ambiguity or correct any defective provision. The
rights agreement requires the approval by the holders of at least a majority of the then outstanding rights in order to make any change
that adversely affects the interests of the holders of the rights.
We may amend the terms of the warrants in a manner that may be
adverse to holders of public warrants with the approval by the holders of at least a majority of the then outstanding public warrants.
Our warrants will be issued in registered form
under warrant agreements between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreements provide
that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision,
but requires the approval by the holders of at least a majority of the then outstanding public warrants to make any change that adversely
affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner
adverse to a holder if holders of at least a majority of the then outstanding public warrants approve of such amendment. Although our
ability to amend the terms of the public warrants with the consent of at least a majority of the then outstanding public warrants is unlimited,
examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise
period or decrease the number of Class A ordinary shares purchasable upon exercise of a warrant.
Our unit structure may cause our units to be worth less than
units of other blank check companies.
Each unit contains on Class A ordinary share, one
right and one-half of one redeemable warrant. No fractional warrants will be issued upon separation of the units and only whole warrants
will trade, and no fractional shares will be issued upon conversion of any rights. Accordingly, unless you purchase at least two units,
you will not be able to receive or trade a whole warrant and unless you purchase at least ten units, you will not be able to receive a
whole Class A ordinary share. The foregoing is different from other offerings similar to ours whose units include whole warrants. This
unit structure may cause our units to be worth less than if they included a warrant to purchase one whole share.
A provision of our warrant agreements may make it more difficult
for us to consummate a business combination.
If:
(i) we issue additional Class A ordinary shares
or equity-linked securities for capital raising purposes in connection with the closing of our business combination at a Newly Issued
Price of less than $9.20 per Class A ordinary share;
(ii) the aggregate gross proceeds from such issuances
represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our business combination on the
date of the completion of our business combination (net of redemptions); and
(iii) the Market Value is below $9.20 per
share;
then the exercise price of the warrants will be
adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger
price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. This may
make it more difficult for us to consummate a business combination with a target business.
We may redeem your unexpired warrants prior to their exercise
at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem outstanding warrants
at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant; provided that the last reported
sales price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share dividends, rights
issuances, subdivisions, reorganizations, recapitalizations and the like or as indicated above) for any 20 trading days within a 30 trading-day
period commencing on the date they become exercisable and ending on the third trading day prior to the date we send the notice of redemption
to the warrant holders. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to
register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants
could force you to: (1) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to
do so; (2) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants; or (3) accept the
nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than
the market value of your warrants. None of the private warrants will be redeemable by us.
Our rights, warrants and Founder Shares may have an adverse effect
on the market price of our Class A ordinary shares and make it more difficult to effectuate our business combination.
We will be issuing rights to receive
1,150,000 Class A ordinary shares and warrants to purchase 5,750,000 Class A ordinary shares, at a price of $11.50 per share
(subject to adjustment as provided herein), as part of the units. In addition, in connection with our Initial Public Offering and
the Over-Allotment Option, our Sponsor and EarlyBirdCapital and their designees have in a private placement purchased an aggregate
of 545,000 private placement units (including 490,500 private placement units purchased by our Sponsor and 54,500 private placement
units purchased by EarlyBirdCapital), each containing one right to receive one-tenth of one Class A ordinary share upon the
completion of a business combination and one half of one private warrant exercisable to purchase one Class A ordinary share at a
price of $11.50 per share, subject to adjustment as provided herein. Our initial shareholders currently hold 2,875,000 Founder
Shares. In addition, if our sponsor, an affiliate of our sponsor or certain of our officers and directors make any working capital
loans, up to $1,500,000 of such loans may be converted into units, at the price of $10.00 per unit, at the option of the lender.
Such units would be identical to the private placement units. To the extent we issue ordinary shares to effectuate a business
transaction, the potential for the issuance of a substantial number of additional Class A ordinary shares upon exercise of these
warrants or rights could make us a less attractive acquisition vehicle to a target business. Any such issuance will increase the
number of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares issued to complete the
business transaction. Therefore, our rights, warrants and Founder Shares may make it more difficult to effectuate a business
combination or increase the cost of acquiring the target business.
Further, unlike the warrants offered by many other
blank check companies, whose warrants become exercisable on the later of (i) 30 days following the completion of their business combination
and (ii) twelve months after the date of their initial public offering, our warrants become exercisable 30 days after the completion of
a business combination, even if that date is less than twelve months after our initial public offering. The possibility that our warrants
may become exercisable more quickly than the warrants of other blank check companies may make us a less attractive acquisition vehicle
in the eyes of a target business relative to other blank check companies and may cause our warrants to have a greater or more immediate
adverse effect on the market price for our securities or our ability to obtain future financing. In addition, as our warrants may become
exercisable sooner, you may experience dilution to your holdings sooner.
Because we are incorporated under the laws of the Cayman Islands
and some of our executive officers and directors may be located in or have significant ties to China, you may face difficulties in protecting
your interests, and your ability to protect your rights through the U.S. Federal courts may be limited.
We are an exempted company incorporated under the
laws of the Cayman Islands. In addition, some of our executive officers and directors may be located in or have significant ties to China.
As a result, it may be difficult for investors to effect service of process within the United States upon our directors or officers, or
enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs will be governed by our amended
and restated memorandum and articles of association, the Companies Act (as the same may be supplemented or amended from time to time)
and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders
and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of
the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman
Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court
in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are
different from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the
Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have
more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to
initiate a shareholders derivative action in a Federal court of the United States.
We have been advised by Walkers (Hong Kong), our
Cayman Islands legal counsel that the courts of the Cayman Islands are unlikely (1) to recognize or enforce against us judgments of courts
of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state;
and (2) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions
of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature.
In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the
courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without
retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation
to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman
Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty,
inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner,
or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive
or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent
proceedings are being brought elsewhere.
As a result of all of the above, public shareholders
may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or
controlling shareholders than they would as public shareholders of a United States company.
Since our sponsor paid only approximately $0.009 per share for
the Founder Shares, our sponsor could potentially make a substantial profit even if we acquire a target business that subsequently declines
in value. In addition, EarlyBirdCapital, the representative of the underwriters, acquired the EBC Founder Shares for nominal consideration.
Our sponsor acquired Founder Shares for approximately
$0.009 per share and we are offering units at a price of $10.00 per unit. In addition, EarlyBirdCapital, the representative of the underwriters,
acquired the EBC Founder Shares for nominal consideration. As a result, our sponsor, EarlyBirdCapital and directors could make a substantial
profit after the business combination even if public investors experience substantial losses and, accordingly, may have a conflict of
interest in determining whether a particular target business is an appropriate business with which to effectuate our business combination.
For example, assuming the value of the Class A ordinary shares is $10.00 following the business combination, public investors would not
experience a profit (or a loss), but the 2,875,000 Founder Shares, which were purchased for an aggregate of $25,000, would be valued at
$28,750,000 on an as-converted basis, reflecting appreciation of $9.991 per share. In addition, our sponsor will be able to obtain a full
return on the capital invested in connection with our formation and initial public offering in any business combination resulting in an
aggregate value of the Founder Shares equal to or greater than $4,930,000. Because the threshold at which a transaction will be profitable
for our sponsor and directors is significantly lower than for our public investors, the interests of our management in deciding which
opportunities to pursue may be misaligned with public investors.
We may issue our shares to investors in connection with our business
combination at a price that is less than the prevailing market price of our shares at that time.
In connection with our business combination, we
may issue shares to investors in private placement transactions (so-called PIPE transactions) at a price of $10.10 per share or which
approximates the per-share amounts in our Trust Account at such time, which is generally approximately $10.10. The purpose of such issuances
will be to enable us to provide sufficient liquidity to the post-business combination entity. The price of the shares we issue may therefore
be less, and potentially significantly less, than the market price for our shares at such time.
As the number of special purpose acquisition companies evaluating
targets increases, attractive targets may become scarcer and there may be more competition for attractive targets. This could increase
the cost of our business combination and could even result in our inability to find a target or to consummate a business combination.
In recent years, the number of special purpose
acquisition companies that have been formed has increased substantially, especially in the past year. Many potential targets for special
purpose acquisition companies have already entered into a business combination, and there are still many special purpose acquisition companies
seeking targets for their business combination, as well as many such companies currently in registration. As a result, at times, fewer
attractive targets may be available, and it may require more time, more effort and more resources to identify a suitable target and to
consummate a business combination.
In addition, because there are more special purpose
acquisition companies seeking to enter into a business combination with available targets, the competition for available targets with
attractive fundamentals or business models may increase, which could cause targets companies to demand improved financial terms. Attractive
deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions, or increases
in the cost of additional capital needed to close business combinations or operate targets post-business combination. This could increase
the cost of, delay or otherwise complicate or frustrate our ability to find and consummate a business combination, and may result in our
inability to consummate a business combination on terms favorable to our investors altogether.
Changes in the market for directors and officers liability insurance
could make it more difficult and more expensive for us to negotiate and complete a business combination.
In recent months, the market for directors and
officers liability insurance for special purpose acquisition companies has changed. The premiums charged for such policies have generally
increased and the terms of such policies have generally become less favorable. There can be no assurance that these trends will not continue.
The increased cost and decreased availability of
directors and officers liability insurance could make it more difficult and more expensive for us to negotiate a business combination.
In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public company, the post-business
combination entity might need to incur greater expense, accept less favorable terms or both. However, any failure to obtain adequate directors
and officers liability insurance could have an adverse impact on the post-business combination’s ability to attract and retain qualified
officers and directors.
In addition, even after we were to complete a business
combination, our directors and officers could still be subject to potential liability from claims arising from conduct alleged to have
occurred prior to the business combination. As a result, in order to protect our directors and officers, the post-business combination
entity will likely need to purchase additional insurance with respect to any such claims (“run-off insurance”). The need for
run-off insurance would be an added expense for the post-business combination entity, and could interfere with or frustrate our ability
to consummate a business combination on terms favorable to our investors.
Cyber incidents or attacks directed at us could result in information
theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies, including information
systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and
deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the
cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early
stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences.
We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents.
It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial
loss.
Risks Relating to Our Management Team, Our Sponsor, and EarlyBirdCapital
We are dependent upon our officers and directors and their departure
could adversely affect our ability to operate.
Our operations are dependent upon a relatively
small group of individuals. We believe that our success depends on the continued service of our officers and directors, at least until
we have completed our business combination. In addition, our officers and directors are not required to commit any specified amount of
time to our affairs and, accordingly, have conflicts of interest in allocating their time among various business activities, including
identifying potential business combinations and monitoring the related due diligence. Moreover, certain of our officers and directors
have time and attention requirements for investment funds of which affiliates of our sponsor are the investment managers. We do not have
an employment agreement with, or key-man insurance on the life of, any of our directors or officers. The unexpected loss of the services
of one or more of our directors or officers could have a detrimental effect on us.
Our ability to successfully effect our business combination and
to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us following our business combination.
The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
Our ability to successfully effect our business
combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot
presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions
following our business combination, it is likely that some or all of the management of the target business will remain in place. While
we intend to closely scrutinize any individuals we engage after our business combination, we cannot assure you that our assessment of
these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated
by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
In addition, the officers and directors of an acquisition
candidate may resign upon completion of our business combination. The departure of a business combination target’s key personnel
could negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s
key personnel upon the completion of our business combination cannot be ascertained at this time. Although we contemplate that certain
members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our business
combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place. The loss of key
personnel could negatively impact the operations and profitability of our post-combination business.
Our key personnel may negotiate employment or consulting agreements
with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation
following our business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business
combination is the most advantageous.
Our key personnel may be able to remain with the
company after the completion of our business combination only if they are able to negotiate employment or consulting agreements in connection
with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and
could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would
render to us after the completion of our business combination. The personal and financial interests of such individuals may influence
their motivation in identifying and selecting a target business, subject to their fiduciary duties under Cayman Islands law.
However, we believe the ability of such individuals
to remain with us after the completion of our business combination will not be the determining factor in our decision as to whether or
not we will proceed with any potential business combination. There is no certainty, however, that any of our key personnel will remain
with us after the completion of our business combination. We cannot assure you that any of our key personnel will remain in senior management
or advisory positions with us. The determination as to whether any of our key personnel will remain with us will be made at the time of
our business combination.
We may have limited ability to assess the management of a prospective
target business and, as a result, we may effect our business combination with a target business whose management may not have the skills,
qualifications or abilities to manage a public company.
When evaluating the desirability of effecting our
business combination with a prospective target business, our ability to assess the target business’s management may be limited due
to a lack of time, resources or information. Our assessment of the capabilities of the target’s management, therefore, may prove
to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s management
not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination
business may be negatively impacted. Accordingly, shareholders or warrant holders who choose to remain shareholders or warrant holders
following our business combination could suffer a reduction in the value of their securities. Such shareholders or warrant holders are
unlikely to have a remedy for such reduction in value.
The officers and directors of an acquisition candidate
may resign upon completion of our business combination. The departure of a business combination target’s key personnel could negatively
impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s key personnel upon
the completion of our business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition
candidate’s management team will remain associated with the acquisition candidate following our business combination, it is possible
that members of the management of an acquisition candidate will not wish to remain in place.
Our officers and directors will allocate their time to other
businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of
interest could have a negative impact on our ability to complete our business combination.
Our officers and directors are not required
to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between
our operations and our search for a business combination and their other businesses. We do not intend to have any full-time
employees prior to the completion of our business combination. Each of our officers is engaged in several other business endeavors
for which he may be entitled to substantial compensation and our officers are not obligated to contribute any specific number of
hours per week to our affairs. Our independent directors may also serve as officers and board members for other entities. If our
officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in
excess of their current commitment levels, it could limit their ability to devote time to our affairs, which may have a negative
impact on our ability to complete our business combination. For a complete discussion of our officers’ and directors’
other business affairs, please see “Item 10. Directors, Executive Officers and Corporate Governance.”
Certain of our officers and directors are now, and all of them
may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and,
accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Until we consummate our business combination, we
intend to engage in the business of identifying and combining with one or more businesses. Our sponsor and officers and directors are,
or may in the future become, affiliated with entities that are engaged in a similar business, and they are not prohibited from sponsoring,
or otherwise becoming involved with, other blank check companies prior to us completing our business combination. Moreover, certain of
our officers and directors have time and attention requirements for investment funds of which affiliates of our sponsor are the investment
managers.
Our officers and directors also may become aware
of business opportunities which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary or
contractual duties. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity
should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to other entities
prior to its presentation to us, subject to their fiduciary duties under Cayman Islands law.
For a complete discussion of our officers’
and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see “Item
10. Directors, Executive Officers and Corporate Governance,” “Item 10. Directors, Executive Officers and Corporate
Governance — Conflicts of Interest” and “Item 13. Certain Relationships and Related Transactions, and Director
Independence.”
Our officers, directors, security holders and their respective
affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits
our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment
to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business
combination with a target business that is affiliated with our sponsor, directors or officers, although we do not intend to do so. Nor
do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types
conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
In particular, affiliates of our sponsor have invested
in industries as diverse as industrials, telecom services, real estate, information technology, consumer staples, consumer discretionary,
financials, materials, utilities and health care, among others. As a result, there may be substantial overlap between companies that would
be a suitable business combination for us and companies that would make an attractive target for such other affiliates.
EarlyBirdCapital may have a conflict of interest in rendering
services to us in connection with our business combination.
We have engaged EarlyBirdCapital to assist us in
connection with our business combination. We will pay EarlyBirdCapital a cash fee for such services upon the consummation of our business
combination in an aggregate amount equal to 3.5% of the total gross proceeds raised in the offering. The EBC Founder Shares held by EarlyBirdCapital
and its designees will also be worthless if we do not consummate a business combination. In addition, we may engage EarlyBirdCapital as
an advisor in connection with introducing a target business to us. If we engage EarlyBirdCapital and it introduces us to the target business
with whom we complete our business combination, EarlyBirdCapital will receive a cash fee equal to 1% of the total consideration payable
in the business combination. These financial interests may result in EarlyBirdCapital having a conflict of interest when providing the
services to us in connection with a business combination.
We may engage in a business combination with one or more target
businesses that have relationships with entities that may be affiliated with our sponsor, officers or directors which may raise potential
conflicts of interest.
In light of the involvement of our sponsor, officers
and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, officers and directors.
Our officers and directors also serve as officers and board members for other entities, including, without limitation, those described
under “Management — Conflicts of Interest.” Such entities may compete with us for business combination opportunities.
Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our business combination
with any entities with which they are affiliated, and there have been no preliminary discussions concerning a business combination with
any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities,
we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination as set forth
in “Proposed Business — Effecting Our Initial Business Combination — Selection of a target business
and structuring of our business combination” and such transaction was approved by a majority of our independent and disinterested
directors.
If our management following our business combination is unfamiliar
with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory
issues.
Following our business combination, any or all
of our management could resign from their positions as officers of the Company, and the management of the target business at the time
of the business combination could remain in place. Management of the target business may not be familiar with U.S. securities laws. If
new management is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws. This
could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.
Risks Associated with Acquiring and Operating a Business Outside
the United States
If we effect a business combination with a company located outside
the United States, we would be subject to a variety of additional risks that may negatively impact our operations.
If we are successful in consummating a business
combination with a target business in Asia, or if we effect a business combination with a company located in another foreign country,
we would be subject to any special considerations or risks associated with companies operating in the target business’ home jurisdiction,
including any of the following:
| · | rules and regulations or currency conversion or corporate withholding taxes
on individuals; |
| · | tariffs and trade barriers; |
| · | regulations related to customs and import/export matters; |
| · | tax issues, such as tax law changes and variations in tax laws as
compared to the United States; |
| · | currency fluctuations and exchange controls; |
| · | challenges in collecting accounts receivable; |
| · | cultural and language differences; |
| · | employment regulations; |
| · | crime, strikes, riots, civil disturbances, terrorist attacks and wars;
and |
| · | deterioration of political relations with the United States, which
could result in uncertainty and/or changes in or to existing trade treaties. |
In particular, if we acquire a target business
in Asia, we would be subject to the risk of changes in economic conditions, social conditions and political conditions inherent in Asia,
including changes in laws and policies that govern foreign investment, as well as changes in United States laws and regulations relating
to foreign trade and investment.
We cannot assure you that we would be able to adequately
address these additional risks. If we were unable to do so, our operations might suffer.
We may reincorporate in another jurisdiction in connection with
our business combination and such reincorporation may result in taxes imposed on shareholders.
We may, subject to requisite shareholder approval
under the Companies Act, effect a business combination with a target company in another jurisdiction, reincorporate in the jurisdiction
in which the target company or business is located, or reincorporate in another jurisdiction. Such transactions may require a shareholder
to recognize taxable income in the jurisdiction in which the shareholder is a tax resident (or in which its members are resident if it
is a tax transparent entity), in which the target company is located, or in which we reincorporate. In the event of a reincorporation
pursuant to our business combination, such tax liability may attach prior to the consummation of redemptions of any of our public shares
properly submitted to us for redemption in connection with such business combination. We do not intend to make any cash distributions
to shareholders to pay such taxes. Shareholders may be subject to withholding taxes or other taxes with respect to their ownership of
us after the reincorporation.
After our business combination, substantially all of our assets
may be located in a foreign country and substantially all of our revenue may be derived from our operations in such country. Accordingly,
our results of operations and prospects will be subject, to a significant extent, to the economic, political, social and government policies,
developments and conditions in the country in which we operate.
Although our amended and restated memorandum and
articles of association provides that we will not enter into our business combination with any entity that is based in, located in or
with its principal business operations in China (including Hong Kong and Macau), after our business combination, substantially all of
our assets may be located in another foreign country and substantially all of our revenue may be derived from our operations in such country.
The economic, political and social conditions, as well as government policies, of the country in which our operations are located could
affect our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such growth may
not be sustained in the future. If in the future such country’s economy experiences a downturn or grows at a slower rate than expected,
there may be less demand for spending in certain industries. A decrease in demand for spending in certain industries could materially
and adversely affect our ability to find an attractive target business with which to consummate our business combination and if we effect
our business combination, the ability of that target business to become profitable.
After our business combination, it is possible that a majority
of our directors and officers will live outside the United States and all or substantially all of our assets will be located outside the
United States; therefore investors may not be able to enforce federal securities laws or their other legal rights.
It is possible that after our business combination,
a majority of our directors and officers will reside outside of the United States and all or substantially all of our assets will be located
outside of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United States to enforce
their legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United States courts
predicated upon civil liabilities and criminal penalties on our directors and officers under United States laws.
If we effect a business combination with a company located outside
of the United States, we would be subject to a variety of additional risks that may negatively impact our operations.
If we effect a business combination with a company
located outside of the United States, the laws of the country in which such company operates will likely govern almost all of the material
agreements relating to its operations. We cannot assure you that the target business will be able to enforce any of its material agreements
or that remedies will be available in this new jurisdiction. The system of laws and the enforcement of existing laws in such jurisdiction
may not be as certain in implementation and interpretation as in the United States. The inability to enforce or obtain a remedy under
any of our future agreements could result in a significant loss of business, business opportunities or capital.
Because of the costs and difficulties inherent in managing cross-border
business operations, our results of operations may be negatively impacted.
Managing a business, operations, personnel or
assets in another country is challenging and costly. Any management that we may have (whether based abroad or in the U.S.) may be
inexperienced in cross-border business practices and unaware of significant differences in accounting rules, legal regimes and labor
practices. Even with a seasoned and experienced management team, the costs and difficulties inherent in managing cross-border
business operations, personnel and assets can be significant (and much higher than in a purely domestic business) and may negatively
impact our financial and operational performance.
Exchange rate fluctuations and currency policies
may cause a target business’ ability to succeed in the international markets to be diminished.
In the event we acquire a non-U.S. target, all
revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and distributions, if
any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions fluctuate
and are affected by, among other things, changes in political and economic conditions. Any change in the relative value of such currency
against our reporting currency may affect the attractiveness of any target business or, following consummation of our business combination,
our financial condition and results of operations. Additionally, if a currency appreciates in value against the dollar prior to the consummation
of our business combination, the cost of a target business as measured in dollars will increase, which may make it less likely that we
are able to consummate such transaction.
We may re-incorporate in another jurisdiction in connection with
our business combination, and the laws of such jurisdiction will likely govern all of our material agreements and we may not be able to
enforce our legal rights.
In connection with our business combination, we
may relocate the home jurisdiction of our business from the Cayman Islands to Asia or another jurisdiction. If we determine to do this,
the laws of such jurisdiction would likely govern all of our material agreements. The system of laws and the enforcement of existing laws
in such jurisdiction may not be as certain in implementation and interpretation as in the United States or the Cayman Islands. The inability
to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities
or capital. Any such reincorporation may subject us to foreign regulations that could materially and adversely affect our business.
There may be tax consequences to our business combinations that
may adversely affect us.
While we expect to undertake any merger or acquisition
so as to minimize taxes both to the acquired business and/or assets and us, such business combination might not meet the statutory requirements
of a tax-free reorganization, or the parties might not obtain the intended tax-free treatment upon a transfer of shares or assets. A non-qualifying
reorganization could result in the imposition of substantial taxes.
We may be exposed to liabilities under the Foreign Corrupt Practices
Act, and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse effect on our business.
We are subject to the Foreign Corrupt Practice
Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political
parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business. We have operations,
agreements with third parties and make sales in Asia, which may experience corruption. Our proposed activities in Asia create the risk
of unauthorized payments or offers of payments by one of the employees, consultants, or sales agents of our Company, because these parties
are not always subject to our control. It will be our policy to implement safeguards to discourage these practices by our employees. Also,
our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants, or sales agents
of our Company may engage in conduct for which we might be held responsible. Violations of the FCPA may result in severe criminal or civil
sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition.
In addition, the government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which
we invest or that we acquire.