The special meeting, which
we refer to as the “Special Meeting”, of stockholders of Mallard Acquisition Corp., which we refer to as the “we”,
“us”, “our” or the “Company”, will be held at 10:00 a.m. Eastern Time on April [ ], 2022
as a virtual meeting. You will be able to attend, vote your shares, and submit questions during the Special Meeting via a live webcast
available at https://www.cstproxy.com/mallardspac/2022. The Special Meeting will be held for the sole purpose of considering and voting
upon the following proposals:
The
Adjournment Proposal will only be presented at the Special Meeting if there are not sufficient votes to approve the Extension Amendment
Proposal.
The Extension Amendment Proposal
is required for the implementation of the plan of the board of directors (the “Board”) to extend the date by which the Company
has to complete our initial business combination (“Business Combination”). The purpose of the Extension Amendment is to allow
the Company more time to complete a Business Combination until the Extended Date or the Additional Extension Date (if necessary). In addition,
we will not proceed with the Extension if the number of redemptions or repurchases of our shares of common stock issued in our IPO, which
shares we refer to as the “public shares”, causes us to have less than $5,000,001 of net tangible assets following approval
of the Extension Amendment Proposal.
The purpose of the Extension
Amendment Proposal and, if necessary, the Adjournment Proposal, is to allow us additional time to complete our Business Combination. The
Company’s prospectus for its initial public offering (“IPO”) and charter provide that the Company has until April 29,
2022 to complete a Business Combination. There is not sufficient time before April 29, 2022 for the Company to consummate a Business Combination.
Accordingly, our Board has determined that it is in the best interests of our stockholders to
extend the date that the Company has to consummate a Business Combination until the Extended Date or the Additional Extension Date
(if necessary).
If the Extension Amendment
Proposal is approved, then in connection with the filing of the Extension Amendment, we will make a deposit (each deposit being referred
to herein as a “Deposit”) into the trust account established in connection with our IPO (the “Trust Account”)
of an aggregate amount of $250,000 for the benefit of public shares that are not redeemed by the public stockholders in connection with
the Extension Amendment Proposal (collectively, the “Remaining Public Shares”).
In the event the Board elects to extend the period of time to consummate a Business Combination for an additional three months following
the Extended Date, from July 29, 2022 to October 29, 2022, we will deposit an additional $250,000 into the Trust Account, regardless of
the number of Remaining Public Shares.
If we do not have the funds
necessary to make the Deposit referred to above, our sponsor, Mallard Founders Holdings LLC, (the “Sponsor”), has agreed that
it and/or any of its affiliates or designees will contribute to the Company as a loan (the Sponsor, affiliate or designee making the loan
being referred to herein as a “Contributor” and each loan being referred to herein as a “Contribution”) the amounts
described above for the Company to Deposit. The first Deposit or Contribution will be made in connection with the filing of the Extension
Amendment, if the Extension Amendment Proposal is approved. The second Deposit or Contribution after the Extended Date, if applicable,
(the “Extension Payment”) will be placed in the Trust Account on or prior to the applicable deadline.
In connection with
the Extension Amendment Proposal, public stockholders may elect to redeem their public shares for a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable),
divided by the number of then outstanding shares of common stock issued in our IPO, which shares we refer to as the “public shares”,
and which election we refer to as the “Election”, regardless of whether such public stockholders vote on the Extension Amendment
Proposal. If the Extension Amendment Proposal is approved by the requisite vote of stockholders, the remaining holders of public shares
will retain their right to redeem their public shares when a Business Combination is submitted to the stockholders, subject to any limitations
set forth in our charter as amended by the Extension Amendment. In addition, public stockholders who do not make the Election would be
entitled to have their public shares redeemed for cash if the Company has not completed a Business Combination by the Extended Date or
by the Additional Extension Date (if applicable). Our Sponsor as of the record date owns 2,750,000 shares of our common stock, which
we refer to as the “Founder Shares”, that were issued to the Sponsor prior to our IPO, and 10,000,000 private placement
warrants, which we refer to as the “Private Placement Warrants”, that were purchased by the Sponsor in a private placement
which occurred simultaneously with the completion of the IPO.
The withdrawal of funds from
the Trust Account in connection with the Election will reduce the amount held in the Trust Account following the Election. In such event,
the Company may need to obtain additional funds to complete a Business Combination, and there
can be no assurance that such funds will be available on terms acceptable to the parties or at all.
If the Extension Amendment
Proposal is not approved and we do not consummate a Business Combination by April 29, 2022, as contemplated by our IPO prospectus and
in accordance with our charter, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably
possible but not more than ten business days thereafter subject to lawfully available funds therefor, redeem 100% of the public shares,
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on
the funds held in the Trust Account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution
expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’
rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as
promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Board in accordance
with applicable law, dissolve and liquidate, subject in each case to the Company’s obligations under the Delaware General Corporation
Law, which we refer to as the “DGCL”, to provide for claims of creditors and other requirements of applicable law.
There will be no distribution
from the Trust Account with respect to our warrants, which will expire worthless in the event of our winding up. In the event of a liquidation,
the Sponsor and our officers and directors will not receive any monies held in the Trust Account as a result of their ownership of the
Founder Shares or the Private Placement Warrants. As a consequence, a liquidating distribution will be made only with respect to the public
shares.
If the Company liquidates,
the Sponsor has agreed to indemnify us to the extent any claims by a third party for services rendered or products sold to us, or any
claims by a prospective target business with which we have discussed entering into an transaction agreement, reduce the amount of funds
in the Trust Account to below (i) $10.10 per public share or (ii) such lesser amount per public share held in the Trust Account as
of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest
which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access
to our Trust Account and except as to any claims under our indemnity of the underwriters of our IPO against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, which we refer to as the “Securities Act”. Moreover, in the event
that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any
liability for such third party claims. We cannot assure you, however, that the Sponsor would be able to satisfy those obligations. Based
upon the current amount in the Trust Account, we anticipate that the per-share price at which public shares will be redeemed from cash
held in the Trust Account will be approximately $10.10. Nevertheless, the Company cannot assure you that the per share distribution from
the Trust Account, if the Company liquidates, will not be less than $10.10, plus interest, due to unforeseen claims of creditors.
Under the DGCL, stockholders
may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution.
If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision
for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation,
a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating
distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser
of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder
would be barred after the third anniversary of the dissolution.
Because the Company will
not be complying with Section 280 of the DGCL as described in our IPO prospectus filed with the U.S. Securities and Exchange Commission,
which we refer to as the “SEC”, on October 28, 2020, Section 281(b) of the DGCL requires us to adopt a plan, based on
facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially
brought against us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating
company, and our operations have been limited to searching for prospective target businesses to acquire, the only likely claims to arise
would be from our vendors (such as lawyers or investment bankers) or prospective target businesses.
If the Extension Amendment
Proposal is approved, the Company, pursuant to the terms of the investment management trust agreement, dated October 27, 2020, by and
between the Company and Continental Stock Transfer & Trust Company (the “Trust Agreement”), will (i) remove from
the Trust Account an amount, which we refer to as the “Withdrawal Amount”, equal to the number of public shares properly redeemed
multiplied by the per-share price, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest
shall be net of taxes payable), divided by the number of then outstanding public shares, and (ii) deliver to the holders of such
redeemed public shares their portion of the Withdrawal Amount. The remainder of such funds shall remain in the Trust Account and be available
for use by the Company to complete a Business Combination on or before the Extended Date or the Additional Extension Date (if applicable).
Holders of public shares who do not redeem their public shares now will retain their redemption rights and their ability to vote on a
Business Combination through the Extended Date or the Additional Extension Date (if applicable) if the Extension Amendment Proposal is
approved.
Our Board has fixed the close
of business on March 24, 2022 as the date for determining the Company’s stockholders entitled to receive notice of and vote at the
Special Meeting and any adjournment thereof. Only holders of record of the Company’s common stock on that date are entitled to have
their votes counted at the Special Meeting or any adjournment thereof. On the record date of the Special Meeting, there were 13,750,000
shares of common stock outstanding. The Company’s warrants do not have voting rights in connection with the Extension Amendment
Proposal or the Adjournment Proposal.
This Proxy Statement
contains important information about the Special Meeting and the proposals. Please read it carefully and vote your shares.
We will pay for the entire
cost of soliciting proxies from our working capital. We have engaged Morrow Sodali LLC (“Morrow Sodali”) to assist in the
solicitation of proxies for the Special Meeting. We have agreed to pay Morrow Sodali a fee of $27,500. We will also reimburse Morrow Sodali
for reasonable out-of-pocket expenses and will indemnify Morrow Sodali and its affiliates against certain claims, liabilities, losses,
damages and expenses. In addition to these mailed proxy materials, our directors and officers may also solicit proxies in person, by telephone
or by other means of communication. These parties will not be paid any additional compensation for soliciting proxies. We may also reimburse
brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners. While the payment of these expenses
will reduce the cash available to us to consummate a Business Combination if the Extension is approved, we do not expect such payments
to have a material effect on our ability to consummate a Business Combination.
This Proxy Statement is dated
__________, 2022 and is first being mailed to stockholders on or about __________, 2022.
These Questions and Answers
are only summaries of the matters they discuss. They do not contain all of the information that may be important to you. You should read
carefully the entire document, including the annexes to this Proxy Statement.
| What happens if the Extension Amendment Proposal is not approved? |
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Our Board will abandon the Extension Amendment if our stockholders do not approve the Extension Amendment Proposal. |
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If the Extension Amendment Proposal is not approved and we have not consummated a Business Combination by April 29, 2022, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully available funds therefor, redeem 100% of the shares of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Board in accordance with applicable law, dissolve and liquidate, subject in each case to the Company’s obligations under the DGCL to provide for claims of creditors and other requirements of applicable law. |
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There will be no distribution from the Trust Account with respect to our warrants which will expire worthless in the event we wind up. In the event of a liquidation, the Sponsor and our officers and directors will not receive any monies held in the Trust Account as a result of their ownership of the Founder Shares or Private Placement Warrants. |
| If the Extension Amendment Proposal is approved, what happens next? |
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If the Extension Amendment Proposal is approved,
the Company will make the initial Deposit into the Trust Account, file the Extension Amendment with the Delaware Secretary of State and
will continue to attempt to consummate a Business Combination until the Extended Date, or until the Additional Extension Date(s), if applicable.
Our seeking to complete a Business Combination
will involve: |
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negotiating and executing a definitive agreement and related agreements; |
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completing proxy materials; |
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establishing a meeting date and record date for
considering a Business Combination, and distributing proxy materials to stockholders; and
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holding a special meeting to consider a Business Combination.
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We are seeking approval of the Extension Amendment Proposal because we will not be able to complete all of the tasks listed above prior to April 29, 2022. If the Extension Amendment Proposal is approved, we expect to seek stockholder approval of a Business Combination. If stockholders approve a Business Combination, we expect to consummate a Business Combination as soon as possible following such stockholder approval. |
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Upon approval of the Extension Amendment Proposal by holders of at least 65% of the common stock outstanding as of the record date, we will file an amendment to the charter with the Secretary of State of the State of Delaware in the form set forth in Annex A hereto. We will remain a reporting company under the Exchange Act and our units, common stock and public warrants will remain publicly traded. |
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If the Extension Amendment Proposal is approved, the removal of the Withdrawal Amount from the Trust Account will reduce the amount remaining in the Trust Account and increase the percentage interest of our common stock held by the Sponsor and our directors and our officers as a result of their ownership of the Founder Shares. |
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Notwithstanding stockholder approval of the Extension Amendment Proposal, our Board will retain the right to abandon and not implement the Extension Amendment at any time without any further action by our stockholders. |
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| What happens to the Company warrants if the Extension Amendment Proposal is not approved? |
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If the Extension Amendment Proposal is not approved and we have not
consummated a Business Combination by April 29, 2022, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly
as reasonably possible but not more than ten business days thereafter subject to lawfully available funds therefor, redeem 100% of the
shares of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account
including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes (less up to $100,000
of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish
public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject
to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders
and the Board in accordance with applicable law, dissolve and liquidate, subject in each case to the Company’s obligations under
the DGCL to provide for claims of creditors and other requirements of applicable law.
There will be no distribution from the Trust Account with respect to
our warrants, which will expire worthless in the event of our winding up. In the event of a liquidation, the Sponsor and our officers
and directors will not receive any monies held in the Trust Account as a result of their ownership of the Founder Shares and Private Placement
Warrants. |
| What happens to the Company’s warrants if the Extension Amendment Proposal is approved? |
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If the Extension Amendment Proposal is approved, we will retain the blank check company restrictions previously applicable to us and continue to attempt to consummate a business combination until the Extended Date or the Additional Extension Date (if applicable). The public warrants will remain outstanding and only become exercisable 30 days after the completion of a business combination, provided that we have an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to them is available (or we permit holders to exercise warrants on a cashless basis). |
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| Would I still be able to exercise my redemption rights if I vote “AGAINST” a Business Combination? |
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Unless you elect to redeem your public shares at this time, you will be able to vote on a Business Combination when it is submitted to stockholders if you are a stockholder on the record date for a meeting to seek stockholder approval of a Business Combination. If you disagree with a Business Combination, you will retain your right to redeem your public shares upon consummation of a Business Combination in connection with the stockholder vote to approve a Business Combination, subject to any limitations set forth in our charter. |
| How do I attend the meeting? |
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You will need your control number for access. If you do not have your control number, contact Continental Stock Transfer & Trust Company at the phone number or e-mail address below. Beneficial investors who hold shares through a bank, broker or other intermediary, will need to contact them and obtain a legal proxy. Once you have your legal proxy, contact Continental Stock Transfer & Trust Company to have a control number generated. Continental Stock Transfer & Trust Company contact information is as follows: 917-262-2373, or email proxy@continentalstock.com. |
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| How do I change or revoke my vote? |
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You may change your vote by e-mailing a later-dated, signed proxy card to our Secretary at Jeff@mallardspac.com, so that it is received by our Secretary prior to the Special Meeting or by attending the Special Meeting online and voting. You also may revoke your proxy by sending a notice of revocation to our Secretary, which must be received by our Secretary prior to the Special Meeting. |
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Please note, however, that if on the record date, your shares were held not in your name, but rather in an account at a brokerage firm, custodian bank, or other nominee, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. If your shares are held in street name, and you wish to attend the Special Meeting and vote at the Special Meeting online, you must follow the instructions included with the enclosed proxy card. |
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| How are votes counted? |
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Votes will be counted by the inspector of election
appointed for the meeting, who will separately count “FOR” and “AGAINST” votes and abstentions. The Extension
Amendment Proposal must be approved by the affirmative vote of at least 65% of the outstanding shares as of the record date of our common
stock, including the Founder Shares. Accordingly, a Company stockholder’s failure to vote by proxy or to vote online at the Special
Meeting or an abstention with respect to the Extension Amendment Proposal will have the same effect as a vote “AGAINST” such
proposal.
The approval of the Adjournment Proposal requires
the affirmative vote of the majority of the votes cast by stockholders represented in person or by proxy. Accordingly, a Company stockholder’s
failure to vote by proxy or to vote online at the Special Meeting will not be counted towards the number of shares of common stock required
to validly establish a quorum, and if a valid quorum is otherwise established, it will have no effect on the outcome of any vote on the
Adjournment Proposal. |
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Abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the outcome of the Adjournment Proposal. |
| If my shares are held in “street name,” will my broker automatically vote them for me? |
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No. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. We believe all the proposals presented to the stockholders will be considered non-discretionary and therefore your broker, bank, or nominee cannot vote your shares without your instruction. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide. If your shares are held by your broker as your nominee, which we refer to as being held in “street name”, you may need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker to vote your shares. |
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| What is a quorum requirement? |
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A quorum of stockholders is necessary to hold a valid meeting. Holders of a majority in voting power of our common stock on the record date issued and outstanding and entitled to vote at the Special Meeting, present in person or represented by proxy, constitute a quorum. |
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Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote online at the Special Meeting. Abstentions will be counted towards the quorum requirement. In the absence of a quorum, the Chairman of the meeting has power to adjourn the Special Meeting. As of the record date for the Special Meeting, 6,875,001 shares of our common stock would be required to achieve a quorum. |
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| Who can vote at the Special Meeting? |
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Only holders of record of our common stock at the close of business on March 24, 2022 are entitled to have their vote counted at the Special Meeting and any adjournments or postponements thereof. On this record date, 13,750,000 shares of common stock were outstanding and entitled to vote. |
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Stockholder of Record: Shares Registered in Your Name. If on the record date your shares were registered directly in your name with our transfer agent, Continental Stock Transfer & Trust Company, then you are a stockholder of record. As a stockholder of record, you may vote online at the Special Meeting or vote by proxy. Whether or not you plan to attend the Special Meeting online, we urge you to fill out and return the enclosed proxy card to ensure your vote is counted. |
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Beneficial Owner: Shares Registered in the Name of a Broker or Bank. If on the record date your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the Special Meeting. However, since you are not the stockholder of record, you may not vote your shares online at the Special Meeting unless you request and obtain a valid proxy from your broker or other agent. |
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| Does the Board recommend voting for the approval of the Extension Amendment Proposal and the Adjournment Proposal? |
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Yes. After careful consideration of the terms and conditions of these proposals, our Board has determined that the Extension Amendment and, if presented, the Adjournment Proposal are in the best interests of the Company and its stockholders. The Board recommends that our stockholders vote “FOR” the Extension Amendment Proposal and the Adjournment Proposal. |
| What interests do the Company’s Sponsor, directors and officers have in the approval of the proposals? |
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The Sponsor, directors and officers have interests in the proposals that may be different from, or in addition to, your interests as a stockholder. These interests include ownership of (i) 2,750,000 Founder Shares (purchased for $25,000) and 10,000,000 Private Placement Warrants (purchased for $5.0 million), which would expire worthless if a business combination is not consummated, and (ii) a promissory note in the principal amount of up to $1,000,000 issued in connection with working capital loans made by the Sponsor, of which approximately $500,000 was outstanding as of December 31, 2021. See the section entitled “The Extension Amendment Proposal — Interests of the Sponsor and our Directors and Officers”. |
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| Do I have appraisal rights if I object to the Extension Amendment Proposal? |
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Our stockholders do not have appraisal rights in connection with the Extension Amendment Proposal under the DGCL. |
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| What do I need to do now? |
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We urge you to read carefully and consider the information contained in this Proxy Statement, including the annexes, and to consider how the proposals will affect you as our stockholder. You should then vote as soon as possible in accordance with the instructions provided in this Proxy Statement and on the enclosed proxy card. |
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| How do I vote? |
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If you are a holder of record of our common stock, you may vote online at the Special Meeting or by submitting a proxy for the Special Meeting. Whether or not you plan to attend the Special Meeting online, we urge you to vote by proxy to ensure your vote is counted. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. You may still attend the Special Meeting and vote online if you have already voted by proxy. |
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If your shares of our common stock are held in “street name” by a broker or other agent, you have the right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the Special Meeting. However, since you are not the stockholder of record, you may not vote your shares online at the Special Meeting unless you request and obtain a valid proxy from your broker or other agent. |
| How do I redeem my shares of common stock? |
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If the Extension is implemented, each of our public stockholders may seek to redeem all or a portion of its public shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding public shares. You will also be able to redeem your public shares in connection with any stockholder vote to approve a proposed business combination, or if we have not consummated a business combination by the Extended Date or the Additional Extension Date (if applicable). |
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In order to exercise your redemption rights, you must, prior to 5:00 p.m. Eastern time on [ ], 2022 (two business days before the Special Meeting) tender your shares physically or electronically and submit a request in writing that we redeem your public shares for cash to Continental Stock Transfer & Trust Company, our transfer agent, at the following address: |
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Continental Stock Transfer & Trust Company
1 State Street Plaza, 30th Floor
New York, New York 10004
Attn: Mark Zimkind
E-mail: mzimkind@continentalstock.com |
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| What should I do if I receive more than one set of voting materials? |
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You may receive more than one set of voting materials, including multiple copies of this Proxy Statement and multiple proxy cards or voting instruction cards, if your shares are registered in more than one name or are registered in different accounts. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your Company shares. |
| Who is paying for this proxy solicitation? |
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We will pay for the entire cost of soliciting proxies from our working capital. We have engaged Morrow Sodali to assist in the solicitation of proxies for the Special Meeting. We have agreed to pay Morrow Sodali a fee of $27,500. We will also reimburse Morrow Sodali for reasonable out-of-pocket expenses and will indemnify Morrow Sodali and its affiliates against certain claims, liabilities, losses, damages and expenses. In addition to these mailed proxy materials, our directors and officers may also solicit proxies in person, by telephone or by other means of communication. These parties will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners. While the payment of these expenses will reduce the cash available to us to consummate an initial business combination if the Extension is approved, we do not expect such payments to have a material effect on our ability to consummate an initial business combination. |
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| Who can help answer my questions? |
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If you have questions about the proposals or if you need additional copies of the Proxy Statement or the enclosed proxy card you should contact our proxy solicitor, Morrow Sodali, at (800) 662-5200 (toll free) or by email at MACU.info@investor.morrowsodali.com. |
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You may also contact us at: |
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Mallard Acquisition Corp.
19701 Bethel Church Road
Suite 302
Cornelius, NC 28031
E-mail: Jeff@mallardspac.com |
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You may also obtain additional information about the Company from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information”. |
FORWARD-LOOKING STATEMENTS
Some of the statements contained
in this proxy statement constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements
relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning
matters that are not historical facts. Forward-looking statements reflect our current views with respect to, among other things, the pending
Business Combination, our capital resources and results of operations. Likewise, our financial statements and all of our statements regarding
market conditions and results of operations are forward-looking statements. In some cases, you can identify these forward-looking statements
by the use of terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,”
“may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,”
“intends,” “plans,” “estimates,” “anticipates” or the negative version of these words
or other comparable words or phrases.
The forward-looking statements
contained in this proxy statement reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties,
assumptions and changes in circumstances that may cause its actual results to differ significantly from those expressed in any forward-looking
statement. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all).
The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated
in the forward-looking statements:
| |
● |
Our ability to enter into a definitive agreement and related agreements; |
| |
● |
our ability to complete a Business Combination; |
| |
● |
the anticipated benefits of a Business Combination; |
| |
● |
the volatility of the market price and liquidity of our securities; |
| |
● |
the use of funds not held in the Trust Account; and |
| |
● |
the competitive environment in which our successor will operate following a Business Combination. |
While forward-looking statements
reflect our good faith beliefs, they are not guarantees of future performance. We disclaim any obligation to publicly update or revise
any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events
or other changes after the date of this proxy statement, except as required by applicable law. For a further discussion of these and other
factors that could cause our future results, performance or transactions to differ significantly from those expressed in any forward-looking
statement, please see the section entitled “Risk Factors” in our final prospectus dated October
27, 2020, as filed with the SEC on October 28, 2020 and in other
reports we file with the SEC. You should not place undue reliance on any forward-looking statements, which are based only on information
currently available to us (or to third parties making the forward-looking statements).
BACKGROUND
We are a blank check company
formed in Delaware on February 26, 2020, for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with one or more businesses.
There are currently 13,750,000 shares
of common stock issued and outstanding. In addition, we issued warrants to purchase 5,500,000 shares of common stock as part of our IPO
and warrants to purchase 5,000,000 shares of common stock as part of the private placement with the Sponsor that we consummated simultaneously
with the consummation of our IPO. Each whole warrant entitles its holder to purchase one-half of one share of common stock at an exercise
price of $11.50 per whole share, to be exercised only for a whole number of shares of our common stock. The warrants will become exercisable
30 days after the completion of our Business Combination and expire five years after the completion of our initial business combination
or earlier upon redemption or liquidation. Once the public warrants become exercisable, the Company may redeem the outstanding warrants
at a price of $0.01 per warrant, if the last sale price of the Company’s common stock equals or exceeds $16.50 per share for any
20 trading days within a 30 trading day period ending on the third business day before the Company sends the notice of redemption to the
warrant holders. The Private Placement Warrants, however, are non-redeemable so long as they are held by the Sponsor or its permitted
transferees.
Approximately $111 million
from our IPO and the simultaneous sale of the Private Placement Warrants are being held in our Trust Account in the United States maintained
by Continental Stock Transfer & Trust Company, acting as trustee, invested in U.S. “government securities”, within the
meaning of Section 2(a)(16) of the Investment Company Act of 1940, which we refer to as the “1940 Act”, with a maturity of
185 days or less or in any open ended investment company that holds itself out as a money market fund selected by us meeting the conditions
of Rule 2a-7 of the 1940 Act, until the earlier of: (i) the consummation of a business combination or (ii) the distribution
of the proceeds in the Trust Account as described below.
In order to finance transaction
costs in connection with an intended Business Combination, the Sponsor has provided, in the form of a loan, $1,000,000 to us to fund our
expenses relating to investigating and selecting a target business and other working capital requirements prior a Business Combination.
As of December 31, 2021, we had approximately $500,000 outstanding under such loan.
You are not being asked
to vote on a Business Combination at this time. If the Extension is implemented and you do not elect to redeem your public shares, provided
that you are a stockholder on the record date for a meeting to consider a Business Combination, you will retain the right to vote on a
Business Combination when it is submitted to stockholders and the right to redeem your public shares for cash in the event a Business
Combination is approved and completed or we have not consummated a business combination by the Extended Date (or the Additional Extension
Date, if applicable).
THE EXTENSION AMENDMENT PROPOSAL
The Company is proposing
to amend its charter to extend the date by which the Company has to consummate a Business Combination to the Extended Date or the Additional
Extension Date (if necessary).
The Extension Amendment Proposal
is required for the implementation of the Board’s plan to allow the Company more time to complete a Business Combination.
If the Extension Amendment
Proposal is not approved and we have not consummated a Business Combination by April 29, 2022, we will (i) cease all operations except
for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully
available funds therefor, redeem 100% of the shares of the public shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released
to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public
shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive
further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of the remaining stockholders and the Board in accordance with applicable law, dissolve and liquidate, subject
in each case to the Company’s obligations under the DGCL to provide for claims of creditors and other requirements of applicable
law.
There will be no distribution from the Trust Account
with respect to our warrants, which will expire worthless in the event of our winding up. In the event of a liquidation, the Sponsor and
our officers and directors will not receive any monies held in the Trust Account as a result of their ownership of the Founder Shares
and Private Placement Warrants.
If the Extension Amendment
Proposal is approved, then in connection with the filing of the Extension Amendment, we will make a Deposit into the Trust Account of
an aggregate amount of $250,000 for Remaining Public Shares. In the event the
Board elects to extend the period of time to consummate a Business Combination for an additional three months following the Extended Date,
from July 29, 2022 to October 29, 2022, we will deposit an additional $250,000 into the Trust Account, regardless of the number of Remaining
Public Shares.
If we do not have the funds
necessary to make the Deposit referred to above, our Sponsor has agreed that it and/or any of its affiliates or designees will contribute
to the Company as a loan the amounts described above for the Company to Deposit. The first Deposit or Contribution will be made in connection
with the filing of the Extension Amendment, if the Extension Amendment Proposal is approved. The Extension Payment” will be placed
in the Trust Account on or prior to the applicable deadline.
No
Deposit or Contribution will be made unless the Extension Amendment Proposal is
approved and we determine to file the Extension Amendment. The Contribution(s) will be repayable by us to the Contributor(s) upon
consummation of a Business Combination. The loans will be forgiven if we are unable to consummate a Business Combination, except to the
extent of any funds held outside of the Trust Account. We will have the sole discretion whether to extend for an additional three month
period after the Extended Date. If we determine not to extend for an additional three month period, the Contributor’s right to make
an additional Deposit or Contribution will terminate. If this occurs, or if the Board otherwise determines that we will not be able to
consummate a Business Combination by the Extended Date or the Additional Extension Date (if necessary), and does not wish to seek an additional
extension beyond such time, we would wind up our affairs and redeem 100% of the outstanding public shares in accordance with the same
procedures set forth below that would be applicable if the Extension Proposal is not approved.
A copy of the proposed
amendment to the charter of the Company is attached to this Proxy Statement in Annex A.
Reasons for the Extension Amendment Proposal
The Company’s charter
provides that the Company has until April 29, 2022 to complete a Business Combination. The purpose of the Extension Amendment is to allow
the Company more time to complete a Business Combination.
The Company’s IPO prospectus
and charter provide that the affirmative vote of the holders of at least 65% of all outstanding shares of common stock, including the
Founder Shares, is required to extend our corporate existence, except in connection with, and effective upon, consummation of a business
combination. Additionally, our IPO prospectus and charter provide for all public stockholders to have an opportunity to redeem their public
shares in the case our corporate existence is extended as described above. Because we continue to believe that a business combination
would be in the best interests of our stockholders, and because we will not be able to conclude a business combination within the permitted
time period, the Board has determined to seek stockholder approval to extend the date by which we have to complete a business combination
beyond April 29, 2022 to the Extended Date or the Additional Extended Date. We intend to hold another stockholder meeting prior to the
Extended Date in order to seek stockholder approval of a Business Combination.
Furthermore, we may in parallel
engage in discussions with potential investors who may purchase certain of our equity securities and assist with a potential business
combination process and/or elect to not redeem their public holdings of the Company. Our sponsor may also explore transactions under which
it would sell its interest in our company to another management team. We may also engage in negotiations and enter into transactions with
certain (as of yet unidentified) stockholders of our company with regard to transactions under which our sponsor would assign founder
shares to such stockholders in consideration of their voting in favor of the Extension and not redeeming their holdings in the Company
in connection therewith.
We believe that the foregoing
charter provision was included to protect Company stockholders from having to sustain their investments for an unreasonably long period
if the Company failed to find a suitable business combination in the timeframe contemplated by the charter.
If the Extension Amendment Proposal is Not Approved
Stockholder approval of the
Extension Amendment is required for the implementation of our Board’s plan to extend the date by which we must consummate a Business
Combination. Therefore, our Board will abandon and not implement the Extension Amendment unless our stockholders approve the Extension
Amendment Proposal.
If the Extension Amendment
Proposal is not approved and we have not consummated a Business Combination by April 29, 2022, we will (i) cease all operations except
for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully
available funds therefor, redeem 100% of the shares of the public shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released
to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public
shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive
further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of the remaining stockholders and the Board in accordance with applicable law, dissolve and liquidate, subject
in each case to the Company’s obligations under the DGCL to provide for claims of creditors and other requirements of applicable
law.
Further, if the Extension Amendment Proposal is
not approved, the Company or Contributor(s), as applicable, will not make the Deposits or Contributions, as applicable.
There will be no distribution from the Trust Account
with respect to our warrants, which will expire worthless in the event of our winding up. In the event of a liquidation, the Sponsor and
our officers and directors will not receive any monies held in the Trust Account as a result of their ownership of the Founder Shares
and Private Placement Warrants.
If the Extension Amendment Proposal Is Approved
If the Extension Amendment
Proposal is approved, the Company will file an amendment to the charter with the Secretary of State of the State of Delaware in the form
set forth in Annex A hereto to extend the time it has to complete a Business Combination until the Extended Date
or the Additional Extension Date (if necessary). The Company will remain a reporting company under the Exchange Act and its units, common
stock and public warrants will remain publicly traded. The Company will then continue to work to consummate a Business Combination by
the Extended Date or the Additional Extension Date (if necessary).
Notwithstanding stockholder
approval of the Extension Amendment Proposal, our Board will retain the right to abandon and not implement the Extension at any time without
any further action by our stockholders.
You are not being asked
to vote on a Business Combination at this time. If the Extension is implemented and you do not elect to redeem your public shares, provided
that you are a stockholder on the record date for a meeting to consider a Business Combination, you will retain the right to vote on a
Business Combination when it is submitted to stockholders and the right to redeem your public shares for cash in the event a Business
Combination is approved and completed or we have not consummated a business combination by the Extended Date (or the Additional Extension
Date, if applicable).
If the Extension Amendment
Proposal is approved, and the Extension is implemented, the removal of the Withdrawal Amount from the Trust Account in connection with
the Election will reduce the amount held in the Trust Account. The Company cannot predict the amount that will remain in the Trust Account
if the Extension Amendment Proposal is approved. We will not proceed with the Extension if redemptions or repurchases of our public shares
cause us to have less than $5,000,001 of net tangible assets following approval of the Extension Amendment Proposal.
Redemption Rights
If the Extension Amendment
Proposal is approved, and the Extension is implemented, each public stockholder may seek to redeem its public shares at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of
taxes payable), divided by the number of then outstanding public shares. Holders of public shares who do not elect to redeem their public
shares in connection with the Extension will retain the right to redeem their public shares in connection with any stockholder vote to
approve a proposed business combination, or if the Company has not consummated a business combination by the Extended Date or the Additional
Extension Date (if applicable).
If the Extension Amendment
Proposal is approved, then in connection with the filing of the Extension Amendment, we will make a Deposit into the Trust Account of
an aggregate amount of $250,000 for Remaining Public Shares. In the event the
Board elects to extend the period of time to consummate a Business Combination for an additional three months following the Extended Date,
from July 29, 2022 to October 29, 2022, we will deposit an additional $250,000 into the Trust Account, regardless of the number of Remaining
Public Shares.
If we do not have the funds
necessary to make the Deposit referred to above, our Sponsor has agreed that it and/or any of its affiliates or designees will contribute
to the Company as a loan the amounts described above for the Company to Deposit. The first Deposit or Contribution will be made in connection
with the filing of the Extension Amendment, if the Extension Amendment Proposal is approved. The Extension Payment” will be placed
in the Trust Account on or prior to the applicable deadline.
No
Deposit or Contribution will be made unless the Extension Amendment Proposal is
approved and we determine to file the Extension Amendment. The Contribution(s) will be repayable by us to the Contributor(s) upon
consummation of a Business Combination. The loans will be forgiven if we are unable to consummate a Business Combination, except to the
extent of any funds held outside of the Trust Account. We will have the sole discretion whether to extend for an additional three month
period after the Extended Date. If we determine not to extend for an additional three month period, the Contributor’s right to make
an additional Deposit or Contribution will terminate. If this occurs, or if the Board otherwise determines that we will not be able to
consummate a Business Combination by the Extended Date or the Additional Extension Date (if necessary), and does not wish to seek an additional
extension beyond such time, we would wind up our affairs and redeem 100% of the outstanding public shares in accordance with the same
procedures set forth below that would be applicable if the Extension Proposal is not approved.
TO EXERCISE YOUR REDEMPTION
RIGHTS, YOU MUST SUBMIT A REQUEST IN WRITING THAT WE REDEEM YOUR PUBLIC SHARES FOR CASH TO CONTINENTAL STOCK TRANSFER & TRUST COMPANY
AT THE ADDRESS BELOW, AND, AT THE SAME TIME, ENSURE YOUR BANK OR BROKER COMPLIES WITH THE REQUIREMENTS IDENTIFIED ELSEWHERE HEREIN, INCLUDING
DELIVERING YOUR SHARES TO THE TRANSFER AGENT PRIOR TO THE VOTE ON THE EXTENSION AMENDMENT PROPOSAL.
In connection with tendering
your shares for redemption, prior to 5:00 p.m. Eastern time on [ ], 2022 (two business days before the Special Meeting), you must elect
either to physically tender your stock certificates to Continental Stock Transfer & Trust Company, 1 State Street Plaza, 30th Floor,
New York, New York 10004, Attn: Mark Zimkind, mzimkind@continentalstock.com, or to deliver your shares to the transfer agent electronically
using DTC’s DWAC system, which election would likely be determined based on the manner in which you hold your shares. The requirement
for physical or electronic delivery prior to 5:00 p.m. Eastern time on [ ], 2022 (two business days before the Special Meeting) ensures
that a redeeming holder’s election is irrevocable once the Extension Amendment Proposal is approved. In furtherance of such irrevocable
election, stockholders making the election will not be able to tender their shares after the vote at the Special Meeting.
Through the DWAC system,
this electronic delivery process can be accomplished by the stockholder, whether or not it is a record holder or its shares are held in
“street name,” by contacting the transfer agent or its broker and requesting delivery of its shares through the DWAC system.
Delivering shares physically may take significantly longer. In order to obtain a physical stock certificate, a stockholder’s broker
and/or clearing broker, DTC, and the Company’s transfer agent will need to act together to facilitate this request. There is a nominal
cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC
system. The transfer agent will typically charge the tendering broker $100 and the broker would determine whether or not to pass this
cost on to the redeeming holder. It is the Company’s understanding that stockholders should generally allot at least two weeks to
obtain physical certificates from the transfer agent. The Company does not have any control over this process or over the brokers or DTC,
and it may take longer than two weeks to obtain a physical stock certificate. Such stockholders will have less time to make their investment
decision than those stockholders that deliver their shares through the DWAC system. Stockholders who request physical stock certificates
and wish to redeem may be unable to meet the deadline for tendering their shares before exercising their redemption rights and thus will
be unable to redeem their shares.
Certificates that have not
been tendered in accordance with these procedures prior to 5:00 p.m. Eastern time on [ ], 2022 (two business days before the Special Meeting)
will not be redeemed for cash held in the Trust Account on the redemption date. In the event that a public stockholder tenders its shares
and decides prior to the vote at the Special Meeting that it does not want to redeem its shares, the stockholder may withdraw the tender.
If you delivered your shares for redemption to our transfer agent and decide prior to the vote at the Special Meeting not to redeem your
public shares, you may request that our transfer agent return the shares (physically or electronically). You may make such request by
contacting our transfer agent at the address listed above. In the event that a public stockholder tenders shares and the Extension Amendment
Proposal is not approved, these shares will not be redeemed and the physical certificates representing these shares will be returned to
the stockholder promptly following the determination that the Extension Amendment Proposal will not be approved. The Company anticipates
that a public stockholder who tenders shares for redemption in connection with the vote to approve the Extension Amendment Proposal would
receive payment of the redemption price for such shares soon after the completion of the Extension Amendment. The transfer agent will
hold the certificates of public stockholders that make the election until such shares are redeemed for cash or returned to such stockholders.
If properly demanded, the
Company will redeem each public share for a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust
Account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding public shares. Based
upon the current amount in the Trust Account, the Company anticipates that the per-share price at which public shares will be redeemed
from cash held in the Trust Account will be approximately $10.10 at the time of the Special Meeting. The closing price of the Company’s
common stock on March 22, 2022 was $10.07.
If you exercise your redemption
rights, you will be exchanging your shares of the Company’s common stock for cash and will no longer own the shares. You will be
entitled to receive cash for these shares only if you properly demand redemption and tender your stock certificate(s) to the Company’s
transfer agent prior to 5:00 p.m. Eastern time on [ ], 2022 (two business days before the Special Meeting). The Company anticipates that
a public stockholder who tenders shares for redemption in connection with the vote to approve the Extension Amendment Proposal would receive
payment of the redemption price for such shares soon after the completion of the Extension.
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following discussion
is a summary of certain United States federal income tax considerations for holders of our common stock with respect to the exercise of
redemption rights in connection with the approval of the Extension Amendment Proposal. This summary is based upon the Internal Revenue
Code of 1986, as amended, which we refer to as the “Code”, the regulations promulgated by the U.S. Treasury Department, current
administrative interpretations and practices of the Internal Revenue Service, which we refer to as the “IRS”, and judicial
decisions, all as currently in effect and all of which are subject to differing interpretations or to change, possibly with retroactive
effect. No assurance can be given that the IRS would not assert, or that a court would not sustain a position contrary to any of the tax
considerations described below. This summary does not discuss all aspects of United States federal income taxation that may be important
to particular investors in light of their individual circumstances, such as investors subject to special tax rules (e.g., financial institutions,
insurance companies, mutual funds, pension plans, S corporations, broker-dealers, traders in securities that elect mark-to-market treatment,
regulated investment companies, real estate investment trusts, trusts and estates, partnerships and their partners, and tax-exempt organizations
(including private foundations)) and investors that will hold common stock as part of a “straddle,” “hedge,” “conversion,”
“synthetic security,” “constructive ownership transaction,” “constructive sale,” or other integrated
transaction for United States federal income tax purposes, investors subject to the alternative minimum tax provisions of the Code, investors
that are subject to the applicable financial statement accounting rules under Section 451(b) of the Code, U.S. Holders (as defined below)
that have a functional currency other than the United States dollar, U.S. expatriates, investors that actually or constructively own 5
percent or more of the common stock of the Company, and Non-U.S. Holders (as defined below, and except as otherwise discussed below),
all of whom may be subject to tax rules that differ materially from those summarized below. In addition, this summary does not discuss
any state, local, or non-United States tax considerations, any non-income tax (such as gift or estate tax) considerations, alternative
minimum tax or the Medicare tax. In addition, this summary is limited to investors that hold our common stock as “capital assets”
(generally, property held for investment) under the Code.
If a partnership (including
an entity or arrangement treated as a partnership for United States federal income tax purposes) holds our common stock, the tax treatment
of a partner in such partnership will generally depend upon the status of the partner, the activities of the partnership and certain determinations
made at the partner level. If you are a partner of a partnership holding our common stock, you are urged to consult your tax advisor regarding
the tax consequences of a redemption.
WE URGE HOLDERS OF OUR
COMMON STOCK CONTEMPLATING EXERCISE OF THEIR REDEMPTION RIGHTS TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE UNITED STATES FEDERAL,
STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES THEREOF.
U.S. Federal Income Tax Considerations to U.S. Holders
This section is addressed
to U.S. Holders of our common stock that elect to have their common stock of the Company redeemed for cash. For purposes of this discussion,
a “U.S. Holder” is a beneficial owner that so redeems its common stock of the Company and is:
| ● | an individual who is a United States citizen or resident
of the United States; |
| ● | a corporation (including an entity treated as a corporation
for United States federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the
District of Columbia; |
| ● | an estate the income of which is includible in gross income
for United States federal income tax purposes regardless of its source; or |
| ● | a trust (A) the administration of which is subject to the
primary supervision of a United States court and which has one or more United States persons (within the meaning of the Code) who have
the authority to control all substantial decisions of the trust or (B) that has in effect a valid election under applicable Treasury
regulations to be treated as a United States person. |
Redemption of Common Stock
In the event that a U.S.
Holder’s common stock of the Company is redeemed, the treatment of the transaction for U.S. federal income tax purposes will depend
on whether the redemption qualifies as a sale of the common stock under Section 302 of the Code. Whether the redemption qualifies for
sale treatment will depend largely on the total number of shares of our stock treated as held by the U.S. Holder (including any stock
constructively owned by the U.S. Holder as a result of owning warrants) relative to all of our shares both before and after the redemption.
The redemption of common stock generally will be treated as a sale of the common stock (rather than as a distribution) if the redemption
(i) is “substantially disproportionate” with respect to the U.S. Holder, (ii) results in a “complete termination”
of the U.S. Holder’s interest in us or (iii) is “not essentially equivalent to a dividend” with respect to the
U.S. Holder. These tests are explained more fully below.
In determining whether any
of the foregoing tests are satisfied, a U.S. Holder takes into account not only stock actually owned by the U.S. Holder, but also shares
of our stock that are constructively owned by it. A U.S. Holder may constructively own, in addition to stock owned directly, stock owned
by certain related individuals and entities in which the U.S. Holder has an interest or that have an interest in such U.S. Holder, as
well as any stock the U.S. Holder has a right to acquire by exercise of an option, which would generally include common stock which could
be acquired pursuant to the exercise of the warrants. In order to meet the substantially disproportionate test, the percentage of our
outstanding voting stock actually and constructively owned by the U.S. Holder immediately following the redemption of common stock must,
among other requirements, be less than 80% of our outstanding voting stock actually and constructively owned by the U.S. Holder immediately
before the redemption. There will be a complete termination of a U.S. Holder’s interest if either (i) all of the shares of
our stock actually and constructively owned by the U.S. Holder are redeemed or (ii) all of the shares of our stock actually owned
by the U.S. Holder are redeemed and the U.S. Holder is eligible to waive, and effectively waives in accordance with specific rules, the
attribution of stock owned by certain family members and the U.S. Holder does not constructively own any other stock. The redemption of
the common stock will not be essentially equivalent to a dividend if a U.S. Holder’s conversion results in a “meaningful reduction”
of the U.S. Holder’s proportionate interest in us. Whether the redemption will result in a meaningful reduction in a U.S. Holder’s
proportionate interest in us will depend on the particular facts and circumstances. However, the IRS has indicated in a published ruling
that even a small reduction in the proportionate interest of a small minority stockholder in a publicly held corporation who exercises
no control over corporate affairs may constitute such a “meaningful reduction.”
If none of the foregoing
tests are satisfied, then the redemption will be treated as a distribution and the tax effects will be as described below under “U.S.
Federal Income Tax Considerations to U.S. Holders — Taxation of Distributions.”
U.S. Holders of our common
stock considering exercising their redemption rights should consult their own tax advisors as to whether the redemption of their common
stock of the Company will be treated as a sale or as a distribution under the Code.
Gain or Loss on a Redemption of Common Stock Treated as a Sale
If the redemption qualifies
as a sale of common stock, a U.S. Holder must treat any gain or loss recognized as capital gain or loss. Any such capital gain or loss
will be long-term capital gain or loss if the U.S. Holder’s holding period for the common stock so disposed of exceeds one year.
Generally, a U.S. Holder will recognize gain or loss in an amount equal to the difference between (i) the amount of cash received
in such redemption (or, if the common stock is held as part of a unit at the time of the disposition, the portion of the amount realized
on such disposition that is allocated to the common stock based upon the then fair market values of the common stock and the three-quarters
of one warrant included in the unit) and (ii) the U.S. Holder’s adjusted tax basis in its common stock so redeemed. A U.S.
Holder’s adjusted tax basis in its common stock generally will equal the U.S. Holder’s acquisition cost (that is, the portion
of the purchase price of a unit allocated to a share of common stock or the U.S. Holder’s initial basis for common stock received
upon exercise of a whole warrant) less any prior distributions treated as a return of capital. Long-term capital gain realized by a non-corporate
U.S. Holder generally will be taxable at a reduced rate. The deduction of capital losses is subject to limitations.
Taxation of Distributions
If the redemption does not
qualify as a sale of common stock, the U.S. Holder will be treated as receiving a distribution. In general, any distributions to U.S.
Holders generally will constitute dividends for United States federal income tax purposes to the extent paid from our current or accumulated
earnings and profits, as determined under United States federal income tax principles. Distributions in excess of current and accumulated
earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. Holder’s
adjusted tax basis in our common stock. Any remaining excess will be treated as gain realized on the sale or other disposition of the
common stock and will be treated as described under “U.S. Federal Income Tax Considerations to U.S. Holders — Gain or Loss
on a Redemption of Common Stock Treated as a Sale”. Dividends we pay to a U.S. Holder that is a taxable corporation generally will
qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions, and provided certain
holding period requirements are met, dividends we pay to a non-corporate U.S. Holder generally will constitute “qualified dividends”
that will be taxable at a reduced rate.
U.S. Federal Income Tax Considerations to Non-U.S. Holders
This section is addressed
to Non-U.S. Holders of our common stock that elect to have their common stock of the Company redeemed for cash. For purposes of this discussion,
a “Non-U.S. Holder” is a beneficial owner (other than a partnership) that so redeems its common stock of the Company and is
not a U.S. Holder.
Redemption of Common Stock
The characterization for
United States federal income tax purposes of the redemption of a Non-U.S. Holder’s common stock generally will correspond to the
United States federal income tax characterization of such a redemption of a U.S. Holder’s common stock, as described under “U.S.
Federal Income Tax Considerations to U.S. Holders”.
Non-U.S. Holders of our common
stock considering exercising their redemption rights should consult their own tax advisors as to whether the redemption of their common
stock of the Company will be treated as a sale or as a distribution under the Code.
Gain or Loss on a Redemption of Common Stock Treated as a Sale
If the redemption qualifies
as a sale of common stock, a Non-U.S. Holder generally will not be subject to United States federal income or withholding tax in respect
of gain recognized on a sale of its common stock of the Company, unless:
| ● | the gain is effectively connected with the conduct of a trade
or business by the Non-U.S. Holder within the United States (and, under certain income tax treaties, is attributable to a United States
permanent establishment or fixed base maintained by the Non-U.S. Holder), in which case the Non-U.S. Holder will generally be subject
to the same treatment as a U.S. Holder with respect to the redemption, and a corporate Non-U.S. Holder may be subject to the branch profits
tax at a 30% rate (or lower rate as may be specified by an applicable income tax treaty); |
| ● | the Non-U.S. Holder is an individual who is present in the
United States for 183 days or more in the taxable year in which the redemption takes place and certain other conditions are met, in which
case the Non-U.S. Holder will be subject to a 30% tax on the individual’s net capital gain for the year; or |
| ● | we are or have been a “U.S. real property holding corporation”
for United States federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition
or the period that the Non-U.S. Holder held our common stock, and, in the case where shares of our common stock are regularly traded
on an established securities market, the Non-U.S. Holder has owned, directly or constructively, more than 5% of our common stock at any
time within the shorter of the five-year period preceding the disposition or such Non-U.S. Holder’s holding period for the shares
of our common stock. We do not believe we are or have been a U.S. real property holding corporation. |
Taxation of Distributions
If the redemption does not
qualify as a sale of common stock, the Non-U.S. Holder will be treated as receiving a distribution. In general, any distributions we make
to a Non-U.S. Holder of shares of our common stock, to the extent paid out of our current or accumulated earnings and profits (as determined
under United States federal income tax principles), will constitute dividends for U.S. federal income tax purposes and, provided such
dividends are not effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States, we will
be required to withhold tax from the gross amount of the dividend at a rate of 30%, unless such Non-U.S. Holder is eligible for a reduced
rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such reduced rate.
Any distribution not constituting a dividend will be treated first as reducing (but not below zero) the Non-U.S. Holder’s adjusted
tax basis in its shares of our common stock and, to the extent such distribution exceeds the Non-U.S. Holder’s adjusted tax basis,
as gain realized from the sale or other disposition of the common stock, which will be treated as described under “U.S. Federal
Income Tax Considerations to Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock”.
Dividends we pay to a Non-U.S. Holder that are effectively connected with such Non-U.S. Holder’s conduct of a trade or business
within the United States generally will not be subject to United States withholding tax, provided such Non-U.S. Holder complies with certain
certification and disclosure requirements. Instead, such dividends generally will be subject to United States federal income tax, net
of certain deductions, at the same graduated individual or corporate rates applicable to U.S. Holders (subject to an exemption or reduction
in such tax as may be provided by an applicable income tax treaty). If the Non-U.S. Holder is a corporation, dividends that are effectively
connected income may also be subject to a “branch profits tax” at a rate of 30% (or such lower rate as may be specified by
an applicable income tax treaty).
As previously noted above,
the foregoing discussion of certain material U.S. federal income tax consequences is included for general information purposes only and
is not intended to be, and should not be construed as, legal or tax advice to any stockholder. We once again urge you to consult with
your own tax adviser to determine the particular tax consequences to you (including the application and effect of any U.S. federal, state,
local or foreign income or other tax laws) of the receipt of cash in exchange for shares in connection with the Extension Amendment Proposal.
THE SPECIAL MEETING
Overview
Date, Time and
Place. The Special Meeting of the Company’s stockholders will be held at 10:00 a.m. Eastern Time on [ ],
2022 as a virtual meeting. You will be able to attend, vote your shares and submit questions during the Special Meeting via a
live webcast available at https://www.cstproxy.com/mallardspac/2022. The meeting will be held virtually over the internet
by means of a live audio webcast. Only stockholders who own shares of our common stock as of the close of business on the
record date will be entitled to attend the virtual meeting.
To register for the virtual
meeting, please follow these instructions as applicable to the nature of your ownership of our common stock.
If your shares are
registered in your name with our transfer agent and you wish to attend the online-only virtual meeting, go to
https://www.cstproxy.com/mallardspac/2022, enter the control number you received on your proxy card and click on the “Click
here” to preregister for the online meeting link at the top of the page. Just prior to the start of the meeting you will need
to log back into the meeting site using your control number. Pre-registration is recommended but is not required in order to
attend.
Beneficial stockholders who
wish to attend the online-only virtual meeting must obtain a legal proxy by contacting their account representative at the bank, broker,
or other nominee that holds their shares and e-mail a copy (a legible photograph is sufficient) of their legal proxy to proxy@continentalstock.com.
Beneficial stockholders who e-mail a valid legal proxy will be issued a meeting control number that will allow them to register to attend
and participate in the online-only meeting. After contacting our transfer agent a beneficial holder will receive an e-mail prior to the
meeting with a link and instructions for entering the virtual meeting. Beneficial stockholders should contact our transfer agent at least
five business days prior to the meeting date.
Voting Power; Record Date.
You will be entitled to vote or direct votes to be cast at the Special Meeting, if you owned the Company’s common stock at
the close of business on March 24, 2022, the record date for the Special Meeting. You will have one vote per proposal for each share
of the Company’s common stock you owned at that time. The Company’s warrants do not carry voting rights.
Votes Required. Approval
of the Extension Amendment Proposal will require the affirmative vote of holders of at least 65% of the Company’s common stock
outstanding on the record date, including the Founder Shares. If you do not vote or you abstain from voting on a proposal, your action
will have the same effect as an “AGAINST” vote. Broker non-votes will have the same effect as “AGAINST” votes.
At the close of business
on the record date of the Special Meeting, there were 13,750,000 shares of common stock issued and outstanding, each of which entitles
its holder to cast one vote per proposal.
If you do not want the Extension
Amendment Proposal approved, you must abstain, not vote, or vote “AGAINST” the Extension Amendment. You will be entitled to
redeem your public shares for cash in connection with this vote whether or not you vote on the Extension Amendment Proposal so long as
you elect to redeem your public shares for a pro rata portion of the funds available in the Trust Account in connection with the Extension
Amendment Proposal. The Company anticipates that a public stockholder who tenders shares for redemption in connection with the vote to
approve the Extension Amendment Proposal would receive payment of the redemption price for such shares soon after the completion of the
Extension Amendment Proposal.
Proxies; Board Solicitation;
Proxy Solicitor. Your proxy is being solicited by the Board on the proposals being presented to stockholders at the Special Meeting.
The Company has engaged Morrow Sodali to assist in the solicitation of proxies for the Special Meeting. No recommendation is being
made as to whether you should elect to redeem your public shares. Proxies may be solicited in person or by telephone. If you grant
a proxy, you may still revoke your proxy and vote your shares online at the Special Meeting if you are a holder of record of the
Company’s common stock. You may contact Morrow Sodali at (800) 662-5200 (toll free) or by email at MACU.info@investor.morrowsodali.com.
Required Vote
The affirmative vote by holders
of at least 65% of the Company’s outstanding shares of common stock, including the Founder Shares, is required to approve the Extension
Amendment Proposal. If the Extension Amendment Proposal is not approved and we have not consummated a Business Combination by April 29,
2022, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than
ten business days thereafter subject to lawfully available funds therefor, redeem 100% of the shares of the public shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held
in the Trust Account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses),
divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights
as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly
as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Board in accordance with
applicable law, dissolve and liquidate, subject in each case to the Company’s obligations under the DGCL to provide for claims of
creditors and other requirements of applicable law.
Stockholder approval of the
Extension Amendment is required for the implementation of our Board’s plan to extend the date by which we must consummate our initial
business combination. Therefore, our Board will abandon and not implement such amendment unless our stockholders approve the Extension
Amendment Proposal. Notwithstanding stockholder approval of the Extension Amendment Proposal, our Board will retain the right to abandon
and not implement the Extension Amendment at any time without any further action by our stockholders.
The Sponsor and all of our
directors, executive officers and their affiliates are expected to vote any common stock over which they have voting control (including
any public shares owned by them) in favor of the Extension Amendment Proposal. On the record date, the Sponsor and our directors and executive
officers of the Company and their affiliates beneficially owned and were entitled to vote an aggregate of 2,750,000 Founder Shares, representing
approximately 20.0% of the Company’s issued and outstanding shares of common stock. The Sponsor and our directors, executive officers
and their affiliates do not intend to purchase shares of common stock in the open market or in privately negotiated transactions in connection
with the stockholder vote on the Extension Amendment.
Interests of the Sponsor, Directors and Officers
When you consider the recommendation
of our Board, you should keep in mind that the Sponsor, executive officers and members of our Board have interests that may be different
from, or in addition to, your interests as a stockholder. These interests include, among other things:
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the fact that the Sponsor holds 2,750,000 Founder Shares and 10,000,000 Private Placement Warrants, all such securities beneficially owned by our executive officers, which would expire worthless if a business combination is not consummated; |
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the fact that the Sponsor holds a promissory note in the principal amount of up to $1,000,000 issued in connection with working capital loans made by the Sponsor, of which approximately $500,000 was outstanding as of December 31, 2021; |
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the fact that, unless the Company consummates a Business Combination, the Sponsor will not receive reimbursement for any out-of-pocket expenses incurred by it on behalf of the Company to the extent that such expenses exceed the amount of available proceeds not deposited in the Trust Account; |
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the fact that, if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.10 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party for services rendered or products sold to us, but only if such a third party or target business has not executed a waiver of any and all rights to seek access to the Trust Account; and |
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the fact that none of our officers or directors has received any cash compensation for services rendered to the Company, and all of the current members of our Board may continue to serve as directors at least through the date of the special meeting to vote on a proposed business combination and may even continue to serve following any potential business combination and receive compensation thereafter. |
The Board’s Reasons for the Extension Amendment Proposal and
Its Recommendation
As discussed below, after
careful consideration of all relevant factors, our Board has determined that the Extension Amendment is in the best interests of the Company
and its stockholders. Our Board has approved and declared advisable adoption of the Extension Amendment Proposal and recommends that you
vote “FOR” such proposal.
Our charter provides that
the Company has until April 29, 2022 to consummate a Business Combination.
Our charter states that if
the Company’s stockholders approve an amendment to the Company’s charter that would affect the substance or timing of the
Company’s obligation to redeem 100% of the Company’s public shares if it does not complete a Business Combination before April
29, 2022, the Company will provide its public stockholders with the opportunity to redeem all or a portion of their public shares upon
such approval at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
(which interest shall be net of taxes payable), divided by the number of then outstanding public shares. We believe that this charter
provision was included to protect the Company stockholders from having to sustain their investments for an unreasonably long period if
the Company failed to find a suitable Business Combination in the timeframe contemplated by the charter.
In addition, the Company’s
IPO prospectus and charter provide that the affirmative vote of the holders of at least 65% of all outstanding shares of common stock,
including the Founder Shares, is required to extend our corporate existence, except in connection with, and effective upon the consummation
of, a business combination. Because we continue to believe that a Business Combination would be in the best interests of our stockholders
and because we will not be able to conclude a Business Combination within the permitted time period, the Board has determined to seek
stockholder approval to extend the date by which we have to complete a Business Combination beyond April 29, 2022 to the Extended Date
or the Additional Extension Date (if necessary).
The Company is not asking
you to vote on a Business Combination at this time. If the Extension is implemented and you do not elect to redeem your public shares,
you will retain the right to vote on a Business Combination in the future and the right to redeem your public shares at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of
taxes payable), divided by the number of then outstanding public shares, in the event a Business Combination is approved and completed
or the Company has not consummated another business combination by the Extended Date or the Additional Extension Date (if applicable).
After careful consideration
of all relevant factors, the Board determined that the Extension Amendment is in the best interests of the Company and its stockholders.
Recommendation of the Board
Our Board unanimously
recommends that our stockholders vote “FOR” the approval of the Extension Amendment Proposal.
THE ADJOURNMENT PROPOSAL
Overview
The Adjournment Proposal,
if adopted, will allow our Board to adjourn the Special Meeting to a later date or dates to permit further solicitation of proxies. The
Adjournment Proposal will only be presented to our stockholders in the event that there are insufficient votes for, or otherwise in connection
with, the approval of the Extension Amendment Proposal. In no event will our Board adjourn the Special Meeting beyond [ ], 2022.
Consequences if the Adjournment Proposal is Not Approved
If the Adjournment Proposal
is not approved by our stockholders, our Board may not be able to adjourn the Special Meeting to a later date in the event that there
are insufficient votes for, or otherwise in connection with, the approval of the Extension Amendment Proposal.
Vote Required for Approval
The approval of the Adjournment
Proposal requires the affirmative vote of the majority of the votes cast by stockholders represented in person or by proxy at the Special
Meeting. Accordingly, if a valid quorum is otherwise established, a stockholder’s failure to vote by proxy or online at the Special
Meeting will have no effect on the outcome of any vote on the Adjournment Proposal. Abstentions will be counted in connection with the
determination of whether a valid quorum is established but will have no effect on the outcome of the Adjournment Proposal.
Recommendation of the Board
Our Board unanimously
recommends that our stockholders vote “FOR” the approval of the Adjournment Proposal.