Item 1. Business
Overview
We are a blank check company incorporated as a
Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization
or similar business combination with one or more businesses, which we refer to throughout this Report as our initial business combination.
We have not yet identified any potential business combination target, and we have not, nor has anyone on our behalf, initiated any substantive
discussions, directly or indirectly, with any potential business combination target.
Our Forward Purchase Agreement and Committed Capital
We believe our ability to complete our initial
business combination will be enhanced by the additional security we bring by the forward purchase agreement we entered into with the forward
purchase investor pursuant to which the forward purchase investor has agreed to purchase, in the aggregate, up to $20,000,000 of forward
purchase units. Each forward purchase unit will consist of one Class A ordinary share, or a forward purchase share, and one-fifth of
one warrant to purchase one Class A ordinary share, or a forward purchase warrant, at a purchase price of $10.00 per unit, and will
be sold in a private placement concurrently with the closing of our initial business combination. The amount of forward purchase units
sold pursuant to the forward purchase agreement will be subject to the forward purchase investor’s sole discretion.
The forward purchase shares will generally be
identical to the Class A ordinary shares included in the units sold in the initial public offering, except that they will be entitled
to certain registration rights. The forward purchase warrants will have the same terms as the private placement warrants so long as they
are held by the forward purchase investor or its permitted assignees and transferees.
We believe our committed capital ensures alignment
with shareholders and will make us more attractive to a potential business combination target.
Competitive Advantages
We believe that Orion’s team has differentiated
operational and investment experience that could be helpful in our pursuit of an initial business combination. We anticipate that this
experience and our affiliation with MSD Partners will position us as a compelling partner to potential targets in the biotechnology and
life sciences industries. We may also be able to offer value to a target business following the completion of an initial business combination
by providing access to our management team’s extensive industry network, operational expertise, and capital markets resources.
Proven track record of value creation:
Our team brings extensive industry experience and strong track records. Panacea has consistently performed in the top quartile among 2008-2018 vintage
venture capital firms based on performance benchmarks, delivering over $1.2 billion ($910 million realized) of total value on
$240 million invested over 31 different investments. MSD Partners and MSD Capital together have over two decades of investment experience
and have generated billions of dollars of investment profits. We believe we will benefit from MSD Partners’ strong reputation in
the marketplace and institutional platform with experienced investment, risk management, and infrastructure personnel.
Extensive public markets experience: Our
team has extensive experience in helping companies successfully navigate the capital markets, particularly advising on and executing the
transition from private to public markets for growth companies. MSD Partners has been investing in the public markets for many years and
takes a long-term, “private equity-like” approach to the public markets, investing alongside high-quality management
teams and striving to build positive working relationships. Our CEO James Huang is a biotechnology industry veteran, having previously
held positions as Vice President of Business Development and Commercial Operations at Tularik Inc., which went public through an IPO on
the Nasdaq in December 1999 and reached a billion dollar market capitalization shortly thereafter, becoming one of the first “billion
dollar” biotechnology IPOs. Tularik was later acquired by Amgen for $1.3 billion. Mr. Huang was also President of Anesiva
Inc. (formerly known as Corgentech) which had a successful IPO on the Nasdaq in 2004. Since becoming a venture capitalist in 2007, Mr. Huang
has invested in 31 companies of which 10 subsequently listed on exchanges in the United States, Hong Kong and China, seven
companies were exited through trade sale, and two have recently filed for public listings.
Robust transaction sourcing capabilities:
Our team has a broad network of relationships in the biotechnology and life sciences sectors, including with venture capitalists, private
and public investors, industry executives, key opinion leaders, and investment bankers. We expect these relationships to be helpful in
our pursuit of an initial business combination. Our team’s investment experience spans the public, venture capital, and private
equity markets in biotechnology and life sciences.
Deep relationships across the biotechnology
ecosystem: Our team maintains relationships with senior executives throughout the biotechnology and life sciences industries. We believe
this could provide access to deal flow and operational expertise. Many of our management team’s former companies have been acquired
by strategic purchasers, including Amgen, Johnson & Johnson, Medtronic, Actelion, Windtree, and PTC Therapeutics. Our team’s
past employers and portfolio companies have also established strategic licensing and collaboration relationships with prominent biopharmaceutical
companies including Bristol-Myers Squibb, Eli Lilly, Takeda Pharmaceuticals, Johnson & Johnson, and many biotechnology companies.
Underwriting and transactional capabilities
across platforms: Our team has extensive underwriting and transactional expertise that we believe will be helpful in our
pursuit of an initial business combination. Mr. Huang and Ms. Chrystyna Bedrij Stecyk have a process of proactively
identifying superior management teams with novel therapeutic platforms prior to their steepest value inflection points, providing the
potential to generate significant value to investors. MSD Partners’ cross-asset platform and team-oriented culture have
helped generate attractive investment opportunities across its investment platforms in the past. MSD Partners’ integrated, multi-strategy structure
allows it to quickly understand business models and evaluate a diverse set of investment opportunities across industries and cycles. MSD
Partners evaluates hundreds of private and public investments each year.
Ability to effect real business transformation
and growth: Our team has unique capabilities to improve business operations following a combination. Our team’s experience will
not only help to identify potential targets, but also to scale the business post-combination and deploy capital thoughtfully in the
future. Through Panacea Advisory LLC, an organization made of ex-FDA staff, Panacea provides full regulatory consulting services
encompassing CMC, IND, and NDA filings of products in development. We believe our team’s extensive operating network will be invaluable
in furthering a company’s growth following the completion of our initial business combination. We will offer potential targets expertise,
vision, and resources to help them grow their business. We intend to improve operations through our team’s network of relationships,
including our board members, management team, and operational advisors’ expertise.
Acquisition Strategy
Investment Scope
Orion intends to target companies with transformational
ideas that leverage science and business to develop innovative therapies or life sciences technologies. We expect these innovations to
offer the potential to significantly advance the standard of care or diagnostic capability for the disease of focus and offer attractive
risk-adjusted returns for our shareholders. We believe that Orion’s team is well positioned to identify attractive acquisition
opportunities because of its reputation, experience, and track record of investing success. Over the years, our team has built significant
domain knowledge, relationship networks, and experience in the biotechnology and life sciences industries. We have identified the following
general criteria and guidelines that we believe are important when evaluating prospective target businesses, but these criteria and guidelines
are not intended to be exhaustive or absolute. We may ultimately decide to enter into an initial business combination with a target that
does not meet some or all of these criteria and guidelines:
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A high probability of clinical and regulatory success |
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The potential to transform or significantly enhance benefits to patients compared with the existing standard of care or technological capability |
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A biomarker or other leading-edge method that increases the probability of commercial success for the company’s therapeutic or platform |
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Significant embedded or underexploited growth opportunities that can be monetized |
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Unique competitive positioning for developing therapies or technologies that can be first-in-class or best-in-class in their respective categories and are expected to maintain competitive advantage in the long term |
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A management team that has the requisite expertise to execute on the program and ability to manage a publicly listed company |
Unique Approach
We believe we are further differentiated by the
following approach employed by Panacea Venture, which we believe will be helpful in sourcing and executing on an initial business combination:
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Identify and invest in highly innovative growth stage companies as well as successful teams/academic leaders with rich industry experience |
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Predict and adapt to industry trends and regulatory policies, enabling the target company to maximize potential growth |
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Employ the “4C” strategy: Intellectual Capital, Human Capital, Venture Capital, and Government Capital |
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Adopt an operator-investor approach to help grow companies, providing critical resources and support |
Market Opportunity
The biotechnology and life sciences industries
are large and growing markets that we believe offer many attractive opportunities for a potential business combination.
Large addressable market with secular growth:
Industry demand for innovative and effective therapies continues to drive long-term growth in the biopharmaceutical industry. According
to EvaluatePharma, worldwide prescription drug sales are expected to grow at a 7.4% CAGR between 2020 and 2026, with sales expected to
reach almost $1.4 trillion by 2026. A greater proportion of industry sales generating from oncology therapies, hundreds of anticipated
approvals from the current clinical pipeline, and a larger amount of sales of biologic and orphan drugs underpin this growth.
Growth in research and development: Scientific
breakthroughs and innovations in oncology, gene therapy, synthetic biology, personalized medicine, precision medicine, rare diseases,
and other sub-sectors of the biopharmaceutical and life sciences industries, are creating new opportunities for investors in the
sector. According to EvaluatePharma, worldwide pharmaceutical R&D spend is expected to reach over $230 billion by 2026, an approximately
50% increase over ten years.
Robust private market deal activity: Strong
levels of venture capital activity in the biotechnology sector support our pursuit of an initial business combination. According to a
recent Analyst note from Pitchbook, biotechnology and pharmaceutical start-ups raised over $23 billion in venture capital financing
across 865 deals in 2020 as of November 18, 2020 breaking the deal value record set in 2018. Since 2015, biotechnology and pharmaceutical
start-ups raised over $80 billion across over 4,000 deals. Many of these companies continue to grow and may view the public
markets as an attractive alternative to support their growth.
Regulatory environment: The FDA continues
to approve new drugs at a healthy pace. There were 228 novel drug approvals in the five-year period from 2016 to 2020. This
represents a 44% increase over the number of novel drugs approved over the period from 2010 to 2014. The constructive regulatory environment
is encouraging continued investment in the biotechnology and life sciences sectors.
Initial Business Combination
We must consummate our initial business combination
with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account
(excluding the amount of any deferred underwriting commissions held in trust and taxes payable on the interest earned on the trust account)
at the time of our signing a definitive agreement in connection with our initial business combination. We do not currently intend to purchase
multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that
will be the case. Our board of directors will make the determination as to the fair market value of our initial business combination.
If our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain
an opinion from an independent investment banking firm which is a member of the Financial Industry Regulatory Authority, or FINRA, or
an independent accounting firm with respect to the satisfaction of such criteria.
We anticipate structuring our initial business
combination so that the post-transaction company in which our public shareholders own or acquire shares will own or acquire 100%
of the outstanding equity interests or assets of the target business or businesses. We may, however, structure our initial business combination
such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order
to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business
combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise
acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under
the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company owns or acquires
50% or more of the outstanding voting securities of the target, our shareholders prior to our initial business combination may collectively
own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in our initial business
combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for
all of the outstanding capital stock of a target, or issue a substantial number of new shares to third-parties in connection with
financing our initial business combination. In such cases, we would acquire a 100% controlling interest in the target. However, as a result
of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own
less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the outstanding equity
interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such
business or businesses that is owned or acquired by us is what will be valued for purposes of the 80% of net assets test. If our initial
business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of
the target businesses.
We may, at our option, pursue an acquisition opportunity
jointly with one or more entities affiliated with MSD Partners, MSD Capital, Panacea Ventures and/or one or more investors in funds managed
by MSD Partners or Panacea Ventures, which we refer to as an “Affiliated Joint Acquisition.” Any such parties may co-invest with
us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition
by issuing to such parties a class of equity or equity-linked securities. We refer to this potential future issuance, or a similar
issuance to other specified purchasers, as a “specified future issuance” throughout this Report. The amount and other terms
and conditions of any such specified future issuance would be determined at the time thereof. We are not obligated to make any specified
future issuance and may determine not to do so. This is not an offer for any specified future issuance. Pursuant to the anti-dilution provisions
of our Class B ordinary shares, any such specified future issuance would result in an adjustment to the conversion ratio such that
our initial shareholders and their permitted transferees, if any, would retain their aggregate percentage ownership at 20% of the sum
of the total number of all ordinary shares outstanding upon completion of our initial public offering plus all shares issued in the specified
future issuance, unless the holders of a majority of the then-outstanding Class B ordinary shares agreed to waive such adjustment
with respect to the specified future issuance at the time thereof. We cannot determine at this time whether a majority of the holders
of our Class B ordinary shares at the time of any such specified future issuance would agree to waive such adjustment to the conversion
ratio. If such adjustment is not waived, the specified future issuance would not reduce the percentage ownership of holders of our Class B
ordinary shares, but would reduce the percentage ownership of holders of our Class A ordinary shares. If such adjustment is waived,
the specified future issuance would reduce the percentage ownership of holders of both classes of our ordinary shares.
We have filed a Registration Statement on Form 8-A with
the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we are subject to the rules and
regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other
obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
Corporate Information
Our executive offices are located at One Vanderbilt
Avenue, 26th Floor, New York, New York 10017 and our telephone number is (212) 303-1650. Our corporate website address is www.orionbiotechopportunities.com.
Our website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference
in, and is not considered part of, this Report or the registration statement of which this Report forms a part. You should not rely on
any such information in making your decision whether to invest in our securities.
We are an “emerging growth company,”
as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business
Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not
being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley
Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from
the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments
not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market
for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also
provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B)
of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company”
can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to
take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until
the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial public offering,
(b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer,
which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the end of that year’s
second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the
prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS
Act.
Additionally, we are a “smaller reporting
company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure
obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting
company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds $250
million as of the end of that year’s second fiscal quarter, and (2) our annual revenues exceeded $100 million during such completed
fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the end of that year’s
second fiscal quarter.
We are a Cayman Islands exempted company. Exempted
companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying
with certain provisions of the Companies Act. As an exempted company, we have applied for and received a tax exemption undertaking from
the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Act (As Revised) of the Cayman Islands, for a
period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits,
income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains
or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on or in respect of our shares, debentures
or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or
capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.
Status as a Public Company
We believe our structure will make us an attractive
business combination partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional
initial public offering through a merger or other business combination with us. In a business combination transaction with us, the owners
of the target business may, for example, exchange their shares of stock, shares or other equity interests in the target business for our
Class A ordinary shares (or shares of a new holding company) or for a combination of our Class A ordinary shares and cash, allowing
us to tailor the consideration to the specific needs of the sellers. We believe target businesses will find this method a more expeditious
and cost effective method to becoming a public company than the typical initial public offering. The typical initial public offering process
takes a significantly longer period of time than the typical business combination transaction process, and there are significant expenses
in the initial public offering process, including underwriting discounts and commissions, that may not be present to the same extent in
connection with a business combination with us.
Furthermore, once a proposed business combination
is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriter’s
ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring or have
negative valuation consequences. Once public, we believe the target business would then have greater access to capital, an additional
means of providing management incentives consistent with shareholders’ interests and the ability to use its shares as currency for
acquisitions. Being a public company can offer further benefits by augmenting a company’s profile among potential new customers
and vendors and aid in attracting talented employees.
While we believe that our structure and our management
team’s backgrounds will make us an attractive business partner, some potential target businesses may view our status as a blank
check company, such as our lack of an operating history and our ability to seek shareholder approval of any proposed initial business
combination, negatively.
We are an “emerging growth company,”
as defined in the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following
the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least
$1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A
ordinary shares that are held by non-affiliates equals or exceeds $700,000,000 as of the prior June 30th, and (2) the
date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Additionally, we are a “smaller reporting
company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure
obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting
company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates equals
or exceeds $250,000,000 as of the prior June 30, and (2) our annual revenues exceeded $100,000,000 during such completed fiscal
year and the market value of our ordinary shares held by non-affiliates equals or exceeds $700,000,000 as of the prior June 30.
Financial Position
With funds available for a business combination
initially in the amount of $194,000,000, after payment of the estimated expenses of our initial public offering and $7,000,000 of deferred
underwriting fees, we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital
for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt or leverage ratio. Because
we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing,
we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target
business to fit its needs and desires. However, we have not taken any steps to secure third party financing and there can be no assurance
it will be available to us.
Effecting Our Initial Business Combination
General
We are not presently engaged in, and we will not
engage in, any operations for an indefinite period of time following our initial public offering. We intend to effectuate our initial
business combination using cash from the proceeds of the initial public offering, the sale of the private placements warrants, our equity,
debt or a combination of these as the consideration to be paid in our initial business combination (pursuant to forward purchase agreements
or backstop agreements we may enter into). We may seek to complete our initial business combination with a company or business that may
be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such
companies and businesses.
If our initial business combination is paid for
using equity or debt, or not all of the funds released from the trust account are used for payment of the consideration in connection
with our initial business combination or used for redemptions of our Class A ordinary shares, we may apply the balance of the cash
released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-business combination
company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the
purchase of other companies or for working capital.
We have not selected any business combination
target and we have not, nor has anyone on our behalf, initiated any substantive discussions with any business combination target. Additionally,
we have not engaged or retained any agent or other representative to identify or locate any suitable acquisition candidate, to conduct
any research or take any measures, directly or indirectly, to locate or contact a target business, other than our officers and directors.
Accordingly, there is no current basis for our investors to evaluate the possible merits or risks of the target business with which we
may ultimately complete our initial business combination. Although our management will assess the risks inherent in a particular target
business with which we may combine, we cannot assure you that this assessment will result in our identifying all risks that a target business
may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the
chances that those risks will adversely affect a target business.
We may need to obtain additional financing to
complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held
in our trust account, or because we become obligated to redeem a significant number of our public shares upon completion of the business
combination, in which case we may issue additional securities or incur debt in connection with such business combination. There are no
prohibitions on our ability to issue securities or incur debt in connection with our initial business combination. We are not currently
a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities,
the incurrence of debt or otherwise.
Sources of Target Businesses
Our process of identifying acquisition targets
will leverage our founders’ and our management team’s unique industry experiences, proven deal sourcing capabilities and broad
and deep network of relationships in numerous industries, including executives and management teams, private equity groups and other institutional
investors, large business enterprises, lenders, investment bankers and other investment market participants, restructuring advisers, consultants,
attorneys and accountants, which we believe should provide us with a number of business combination opportunities. We expect that the
collective experience, capability and network of our founders, directors and officers, combined with their individual and collective reputations
in the investment community, will help to create prospective business combination opportunities.
In addition, we anticipate that target business
candidates may be brought to our attention from various unaffiliated sources, including investment bankers and private investment funds.
Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings.
These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many
of these sources will have read our final prospectus and know what types of businesses we are targeting. Our officers and directors, as
well as their affiliates, may also bring to our attention target business candidates of which they become aware through their business
contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions.
While we do not presently anticipate engaging
the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these
firms, including the underwriter or one of their affiliates, or other individuals in the future, in which event we may pay a finder’s
fee, consulting fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction.
In addition, the underwriter may provide these services without additional compensation. We will formally engage a finder only to the
extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or if
finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue.
Payment of a finder’s fee is customarily tied to completion of a transaction, in which case any such fee will be paid out of the
funds held in the trust account. In no event, however, will our sponsor or any of our existing officers or directors, or any entity with
which they are affiliated, be paid any finder’s fee, consulting fee or other compensation by the company prior to, or for any services
they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction that it
is). None of our sponsor, executive officers or directors, or any of their respective affiliates, will be allowed to receive any compensation,
finder’s fees or consulting fees from a prospective business combination target in connection with a contemplated acquisition of
such target by us. We have agreed to pay our sponsor a total of up to $10,000 per month for office space, administrative support and other
services and to reimburse our sponsor for any out-of-pocket expenses related to identifying, investigating and completing an initial
business combination. Some of our officers and directors may enter into employment or consulting agreements with the post-business combination
company following our initial business combination.
We are not prohibited from pursuing an initial
business combination or subsequent transaction with a company that is affiliated with our sponsor, founders, officers or directors. In
the event we seek to complete our initial business combination with a company that is affiliated with our sponsor or any of our founders,
officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm
which is a member of FINRA or an independent valuation or accounting firm that such initial business combination or transaction is fair
to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
Each of our officers and directors presently has,
and any of them in the future may have additional, fiduciary or contractual obligations to other entities, including entities that are
affiliates of our sponsor, pursuant to which such officer or director is or will be required to present a business combination opportunity
to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable
for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary
or contractual obligations to present such business combination opportunity to such entity, subject to their fiduciary duties under Cayman
Islands law. See “Item 10. Directors, Executive Officers and Corporate Governance — Conflicts of Interest.”
Evaluation of a Target Business and Structuring
of Our Initial Business Combination
In evaluating a prospective target business, we
expect to conduct a thorough due diligence review which may encompass, among other things, meetings with incumbent management and employees,
document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial, operational, legal
and other information which will be made available to us. If we determine to move forward with a particular target, we will proceed to
structure and negotiate the terms of the business combination transaction.
The time required to identify and evaluate a target
business and to structure and complete our initial business combination, and the costs associated with this process, are not currently
ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of, and negotiation with,
a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses
and will reduce the funds we can use to complete another business combination. The company will not pay any consulting fees to members
of our management team, or any of their respective affiliates, for services rendered to or in connection with our initial business combination.
In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent
of our sponsor.
Lack of Business Diversification
For an indefinite period of time after the completion
of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business.
Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it
is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business.
By completing our initial business combination with only a single entity, our lack of diversification may:
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subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination; and |
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cause us to depend on the marketing and sale of a single product or limited number of products or services. |
Limited Ability to Evaluate the Target’s
Management Team
Although we intend to closely scrutinize the management
of a prospective target business when evaluating the desirability of effecting our initial business combination with that business, our
assessment of the target business’s management may not prove to be correct. In addition, the future management may not have the
necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team,
if any, in the target business cannot presently be stated with any certainty. The determination as to whether any of the members of our
management team will remain with the combined company will be made at the time of our initial business combination. While it is possible
that one or more of our directors will remain associated in some capacity with us following our initial business combination, it is unlikely
that any of them will devote their full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot assure
you that members of our management team will have significant experience or knowledge relating to the operations of the particular target
business.
We cannot assure you that any of our key personnel
will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel
will remain with the combined company will be made at the time of our initial business combination.
Following a business combination, we may seek
to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the
ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary
to enhance the incumbent management.
Shareholders May Not Have the Ability to Approve
Our Initial Business Combination
We may conduct redemptions without a shareholder
vote pursuant to the tender offer rules of the SEC subject to the provisions of our amended and restated memorandum and articles of association.
However, we will seek shareholder approval if it is required by applicable law or stock exchange rule, or we may decide to seek shareholder
approval for business or other reasons.
Under Nasdaq’s listing rules, shareholder
approval would be required for our initial business combination if, for example:
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we issue (other than in a public offering for cash) ordinary shares that will either (a) be equal to or in excess of 20% of the number of ordinary shares then issued and outstanding or (b) have voting power equal to or in excess of 20% of the voting power then issued and outstanding; |
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any of our directors, officers or substantial shareholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of ordinary shares could result in an increase in outstanding ordinary shares or voting power of 5% or more; or |
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the issuance or potential issuance of ordinary shares will result in our undergoing a change of control. |
The Companies Act and Cayman Islands law do not
currently require, and we are not aware of any other applicable law that will require, shareholder approval of our initial business combination.
The decision as to whether we will seek shareholder
approval of a proposed business combination in those instances in which shareholder approval is not required by law will be made by us,
solely in our discretion, and will be based on business and legal reasons, which include a variety of factors, including, but not limited
to:
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the timing of the transaction, including in the event we determine shareholder approval would require additional time and there is either not enough time to seek shareholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company; |
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the expected cost of holding a shareholder vote; |
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the risk that the shareholders would fail to approve the proposed business combination; |
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other time and budget constraints of the company; and |
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additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to shareholders. |
Permitted Purchases and Other Transactions
with Respect to Our Securities
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer
rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase public shares or warrants in privately negotiated
transactions or in the open market either prior to or following the completion of our initial business combination. Additionally, at any
time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic
information), our sponsor, directors, executive officers, advisors or their affiliates may enter into transactions with investors and
others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination
or not redeem their public shares. However, they have no current commitments, plans or intentions to engage in such transactions and have
not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase public
shares or warrants in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when
they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by
Regulation M under the Exchange Act.
In the event that our sponsor, directors, officers,
advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to
exercise their redemption rights or submitted a proxy to vote against our initial business combination, such selling shareholders would
be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial business combination. We
do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange
Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine
at the time of any such purchases that the purchases are subject to such rules, the purchasers will be required to comply with such rules.
The purpose of any such transactions could be
to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval
of the business combination, (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum
net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would
otherwise not be met or (iii) reduce the number of public warrants outstanding or vote such warrants or any matter submitted to the
warrant holders for approval in connection with our initial business combination. Any such purchases of our securities may result in the
completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public
“float” of our Class A ordinary shares or public warrants may be reduced and the number of beneficial holders of our
securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a
national securities exchange.
Our sponsor, officers, directors and/or their
affiliates anticipate that they may identify the shareholders with whom our sponsor, officers, directors or their affiliates may pursue
privately negotiated transactions by either the shareholders contacting us directly or by our receipt of redemption requests submitted
by shareholders (in the case of Class A ordinary shares) following our mailing of tender offer or proxy materials in connection with
our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into a private
transaction, they would identify and contact only potential selling or redeeming shareholders who have expressed their election to redeem
their shares for a pro rata share of the trust account or vote against our initial business combination, whether or not such shareholder
has already submitted a proxy with respect to our initial business combination but only if such shares have not already been voted at
the general meeting related to our initial business combination. Our sponsor, executive officers, directors, advisors or their affiliates
will select which shareholders to purchase shares from based on the negotiated price and number of shares and any other factors that they
may deem relevant, and will be restricted from purchasing shares if such purchases do not comply with Regulation M under the Exchange
Act and the other federal securities laws.
Our sponsor, officers, directors and/or their
affiliates will be restricted from making purchases of shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of
the Exchange Act. We expect any such purchases would be reported by such person pursuant to Section 13 and Section 16 of the
Exchange Act to the extent such purchasers are subject to such reporting requirements.
Redemption Rights for Public Shareholders upon
Completion of Our Initial Business Combination
We will provide our public shareholders with the
opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination at
a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business
days prior to the consummation of the initial business combination, including interest earned on the funds held in the trust account and
not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares, subject
to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per share
amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we
will pay to the underwriter. The redemption rights may include the requirement that a beneficial holder must identify itself in order
to validly redeem its shares. Our sponsor and our management team have entered into agreements with us, pursuant to which they have agreed
to waive their redemption rights with respect to their founder shares and any public shares purchased during or after our initial public
offering in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an
amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our
obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial
business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months
from the closing of our initial public offering or (B) with respect to any other provision relating to the rights of holders of our
Class A ordinary shares or pre-initial business combination activity.
Limitations on Redemptions
Our amended and restated memorandum and articles
of association provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be
less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). However, the proposed
business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred
to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions
in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required
to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions
pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the
business combination or redeem any shares, and all Class A ordinary shares submitted for redemption will be returned to the holders
thereof.
Manner of Conducting Redemptions
We will provide our public shareholders with the
opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination either
(i) in connection with a general meeting called to approve the business combination or (ii) by means of a tender offer. The
decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by
us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of
the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirement or whether we
were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval under SEC rules).
Asset acquisitions and share purchases would not typically require shareholder approval while direct mergers with our company where we
do not survive and any transactions where we issue more than 20% of our issued and outstanding ordinary shares or seek to amend our amended
and restated memorandum and articles of association would typically require shareholder approval. We currently intend to conduct redemptions
in connection with a shareholder vote unless shareholder approval is not required by applicable law or stock exchange rule or we choose
to conduct redemptions pursuant to the tender offer rules of the SEC for business or other reasons.
If we held a shareholder vote to approve our initial
business combination, we will, pursuant to our amended and restated memorandum and articles of association:
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and |
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file proxy materials with the SEC. |
In the event that we seek shareholder approval
of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public shareholders
with the redemption rights described above upon completion of the initial business combination.
If we seek shareholder approval, we will complete
our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the
affirmative vote of holders of a majority of the ordinary shares, represented in person or by proxy, who attend and vote at a general
meeting of the Company. In such case, our sponsor and each member of our management team have agreed to vote their founder shares and
public shares purchased during or after our initial public offering in favor of our initial business combination. As a result, in addition
to our initial shareholders’ founder shares, we would need 7,500,001, or 37.5% (assuming all issued and outstanding shares are voted),
or 1,250,001, or 6.25% (assuming only the minimum number of shares representing a quorum are voted), of the 20,000,000 public shares sold
in our initial public offering to be voted in favor of an initial business combination in order to have our initial business combination
approved. Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed
transaction or vote at all. In addition, our sponsor and our management team have entered into agreements with us, pursuant to which they
have agreed to waive their redemption rights with respect to their founder shares and any public shares purchased during or after our
initial public offering in connection with (i) the completion of our initial business combination and (ii) a shareholder vote
to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or
timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection
with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within
24 months from the closing of our initial public offering or (B) with respect to any other provision relating to the rights
of holders of our Class A ordinary shares or pre-initial business combination activity.
If we conduct redemptions pursuant to the tender
offer rules of the SEC, we will, pursuant to our amended and restated memorandum and articles of association:
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conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and |
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file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. |
Upon the public announcement of our initial business
combination, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase Class A ordinary
shares in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule 14e-5 under the
Exchange Act.
In the event we conduct redemptions pursuant to
the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under
the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period.
In addition, the tender offer will be conditioned on public shareholders not tendering more than the number of public shares we are permitted
to redeem. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete
the initial business combination.
Limitation on Redemption upon Completion of
Our Initial Business Combination If We Seek Shareholder Approval
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer
rules, our amended and restated memorandum and articles of association provides that a public shareholder, together with any affiliate
of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under
Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to Excess Shares, without our prior
consent. We believe this restriction will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by
such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or
our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms.
Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in our initial public offering could
threaten to exercise its redemption rights if such holder’s shares are not purchased by us, our sponsor or our management team at
a premium to the then-current market price or on other undesirable terms. By limiting our shareholders’ ability to redeem no
more than 15% of the shares sold in our initial public offering without our prior consent, we believe we will limit the ability of a small
group of shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection
with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of
cash.
However, we would not be restricting our shareholders’
ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Tendering Share Certificates in Connection
with a Tender Offer or Redemption Rights
Public shareholders seeking to exercise their
redemption rights, whether they are record holders or hold their shares in “street name,” will be required to either tender
their certificates, if any, to our transfer agent prior to the date set forth in the proxy solicitation or tender offer materials, as
applicable, mailed to such holders, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s
DWAC (Deposit/ Withdrawal At Custodian) System, at the holder’s option, in each case up to two business days prior to the initially
scheduled vote to approve the business combination. The proxy solicitation or tender offer materials, as applicable, that we will furnish
to holders of our public shares in connection with our initial business combination will indicate the applicable delivery requirements,
which may include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Accordingly, a
public shareholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to
two business days prior to the initially scheduled vote on the proposal to approve the business combination if we distribute proxy materials,
as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short period in which
to exercise redemption rights, it is advisable for shareholders to use electronic delivery of their public shares.
There is a nominal cost associated with the above-referenced tendering
process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the
tendering broker a fee of approximately $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder.
However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their
shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must
be effectuated.
The foregoing is different from the procedures
used by many blank check companies. In order to perfect redemption rights in connection with their business combinations, many blank check
companies would distribute proxy materials for the shareholders’ vote on an initial business combination, and a holder could simply
vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her
redemption rights. After the business combination was approved, the company would contact such shareholder to arrange for him or her to
deliver his or her certificate to verify ownership. As a result, the shareholder then had an “option window” after the completion
of the business combination during which he or she could monitor the price of the company’s shares in the market. If the price rose
above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to
the company for cancellation. As a result, the redemption rights, to which shareholders were aware they needed to commit before the general
meeting, would become “option” rights surviving past the completion of the business combination until the redeeming holder
delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming shareholder’s
election to redeem is irrevocable once the business combination is approved.
Any request to redeem such shares, once made,
may be withdrawn at any time up to two business days prior to the initially scheduled vote on the proposal to approve the business combination,
unless otherwise agreed to by us. Furthermore, if a holder of a public share delivered its certificate in connection with an election
of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply
request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed
to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial business
combination.
If our initial business combination is not approved
or completed for any reason, then our public shareholders who elected to exercise their redemption rights would not be entitled to redeem
their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered
by public holders who elected to redeem their shares.
If our initial proposed business combination is
not completed, we may continue to try to complete a business combination with a different target until 24 months from the closing
of our initial public offering.
Redemption of Public Shares and Liquidation
If No Initial Business Combination
Our amended and restated memorandum and articles
of association provides that we have only 24 months from the closing of our initial public offering to consummate an initial business
combination. If we do not consummate an initial business combination within 24 months from the closing of our initial public offering,
we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more
than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount
then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to
us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public
shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive
further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the
approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under
Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights
or liquidating distributions with respect to our warrants, which will expire worthless if we fail to consummate an initial business combination
within 24 months from the closing of our initial public offering. Our amended and restated memorandum and articles of association
provides that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing
procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days
thereafter, subject to applicable Cayman Islands law.
Our sponsor and each member of our management
team have entered into an agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from
the trust account with respect to any founder shares they hold if we fail to consummate an initial business combination within 24 months
from the closing of our initial public offering (although they will be entitled to liquidating distributions from the trust account with
respect to any public shares they hold if we fail to complete our initial business combination within 24 months from the closing
of our initial public offering).
Our sponsor, executive officers, and directors
have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum
and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A
ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public
shares if we do not complete our initial business combination within 24 months from the closing of our initial public offering or
(B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business
combination activity, unless we provide our public shareholders with the opportunity to redeem their public shares upon approval of any
such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including
interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the
number of the then-outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net
tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules).
If this optional redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy the net
tangible asset requirement, we would not proceed with the amendment or the related redemption of our public shares at such time. This
redemption right shall apply in the event of the approval of any such amendment, whether proposed by our sponsor, any executive officer,
director, or any other person.
We expect that all costs and expenses associated
with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the $1,000,000
of proceeds held outside the trust account plus up to $100,000 of funds from the trust account available to us to pay dissolution expenses,
although we cannot assure you that there will be sufficient funds for such purpose.
If we were to expend all of the net proceeds of
our initial public offering and the sale of the private placement warrants, other than the proceeds deposited in the trust account, and
without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by shareholders
upon our dissolution would be $10.00. The proceeds deposited in the trust account could, however, become subject to the claims of our
creditors which would have higher priority than the claims of our public shareholders. We cannot assure you that the actual per-share redemption
amount received by shareholders will not be less than $10.00. While we intend to pay such amounts, if any, we cannot assure you that we
will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have all vendors, service
providers (excluding our independent registered public accounting firm), prospective target businesses and other entities with which we
do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account
for the benefit of our public shareholders, there is no guarantee that they will execute such agreements or even if they execute such
agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement,
breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case
in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third
party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis
of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management
believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible
instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose
particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree
to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. The underwriter will
not execute agreements with us waiving such claims to the monies held in the trust account. In addition, there is no guarantee that such
entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or
agreements with us and will not seek recourse against the trust account for any reason. In order to protect the amounts held in the trust
account, our sponsor has agreed that it will be liable to us if and to the extent any claims by a vendor for services rendered or products
sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in
the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust
account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of
the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, provided that such liability will
not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to seek access to
the trust account nor will it apply to any claims under our indemnity of the underwriter of our initial public offering against certain
liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against
a third party, our sponsor will not be responsible to the extent of any liability for such third party claims. However, we have not asked
our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds
to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company. Our sponsor may
not be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without
limitation, claims by vendors and prospective target businesses.
In the event that the proceeds in the trust account
are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account
as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust
assets, in each case net of the interest that may be withdrawn to pay our tax obligations, and our sponsor asserts that it is unable to
satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors
would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect
that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to
us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance.
Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be
less than $10.00 per public share.
We will seek to reduce the possibility that our
sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (excluding
our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute
agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will
also not be liable as to any claims under our indemnity of the underwriter of our initial public offering against certain liabilities,
including liabilities under the Securities Act. We will have access to up to $1,000,000 from the proceeds of our initial public offering
and the sale of the private placement warrants with which to pay any such potential claims (including costs and expenses incurred in connection
with our liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently
determined that the reserve for claims and liabilities is insufficient, shareholders who received funds from our trust account could be
liable for claims made by creditors; however such liability will not be greater than the amount of funds from our trust account received
by any such shareholder.
If we file a bankruptcy or winding-up petition
or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the trust account
could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy estate and subject to the claims of
third parties with priority over the claims of our shareholders. To the extent any bankruptcy or insolvency claims deplete the trust account,
we cannot assure you we will be able to return $10.00 per public share to our public shareholders. Additionally, if we file a bankruptcy
or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions
received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential
transfer” or a “fraudulent conveyance.”
As a result, a bankruptcy or insolvency court
could seek to recover some or all amounts received by our shareholders. Furthermore, our board of directors may be viewed as having breached
its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive
damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims
will not be brought against us for these reasons.
Our public shareholders will be entitled to receive
funds from the trust account only (i) in the event of the redemption of our public shares if we do not consummate an initial business
combination within 24 months from the closing of our initial public offering, (ii) in connection with a shareholder vote to
amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to
provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination
or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of
our initial public offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary
shares or pre-initial business combination activity, and (iii) if they redeem their respective shares for cash upon the completion
of the initial business combination. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder
vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the trust account upon the subsequent
completion of an initial business combination or liquidation if we have not consummated an initial business combination within 24 months
from the closing of our initial public offering, with respect to such Class A ordinary shares so redeemed. In no other circumstances
will a shareholder have any right or interest of any kind to or in the trust account. In the event we seek shareholder approval in connection
with our initial business combination, a shareholder’s voting in connection with the business combination alone will not result
in a shareholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such shareholder must have
also exercised its redemption rights described above. These provisions of our amended and restated memorandum and articles of association,
like all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder vote.
Competition
In identifying, evaluating and selecting a target
business for our initial business combination, we may encounter intense competition from other entities having a business objective similar
to ours, including other blank check companies, private equity groups and leveraged buyout funds, public companies, operating businesses
seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting business
combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other
resources than us. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent
limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection
with our public shareholders who properly exercise their redemption rights may reduce the resources available to us for our initial business
combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target
businesses. In addition, potential target businesses may also consider whether undertaking their own registered public offering rather
than a business combination with a blank check company would be preferable. Any of these factors may place us at a competitive disadvantage
in successfully negotiating an initial business combination.
Facilities
We currently maintain our executive offices at
One Vanderbilt Avenue, 26th Floor, New York, New York 10017. The cost for our use of this space is included in the
up to $10,000 per month fee we will pay to our sponsor for office space, administrative support and other services. We consider our current
office space adequate for our current operations.
Employees
We currently have three executive officers. These
individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as
they deem necessary to our affairs until we have completed our initial business combination. The amount of time they will devote in any
time period will vary based on whether a target business has been selected for our initial business combination and the stage of the business
combination process we are in. We do not intend to have any full time employees prior to the completion of our initial business combination.
Item 1A. Risk Factors
An investment in our securities involves a
high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in
this Report and the prospectus associated with our initial public offering, before making a decision to invest in our securities. If any
of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event,
the trading price of our securities could decline, and you could lose all or part of your investment.
Risks Relating to Our Search for, Consummation
of, or Inability to Consummate, a Business Combination and Post-Business Combination Risks
Our shareholders may not be afforded an
opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though
a majority of our shareholders do not support such a combination.
We may not hold a shareholder vote to approve
our initial business combination unless the business combination would require shareholder approval under applicable Cayman Islands law
or stock exchange listing requirements or if we decide to hold a shareholder vote for business or other reasons. For instance, the Nasdaq
rules currently allow us to engage in a tender offer in lieu of a general meeting but would still require us to obtain shareholder approval
if we were seeking to issue more than 20% of our issued and outstanding shares to a target business as consideration in any business combination.
Therefore, if we were structuring a business combination that required us to issue more than 20% of our issued and outstanding ordinary
shares, we would seek shareholder approval of such business combination. However, except as required by applicable law or stock exchange
rule, the decision as to whether we will seek shareholder approval of a proposed business combination or will allow shareholders to sell
their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as
the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. Accordingly,
we may consummate our initial business combination even if holders of a majority of the outstanding ordinary shares do not approve of
the business combination we consummate. Please see the section entitled “Item 1. Business—Shareholders May Not Have the Ability
to Approve Our Initial Business Combination” for additional information.
Your only opportunity to affect the investment
decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
At the time of your investment in us, you will
not be provided with an opportunity to evaluate the specific merits or risks of any target businesses. Since our board of directors may
complete a business combination without seeking shareholder approval, public shareholders may not have the right or opportunity to vote
on the business combination, unless we seek such shareholder approval. Accordingly, your only opportunity to affect the investment decision
regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be
at least 20 business days) set forth in our tender offer documents mailed to our public shareholders in which we describe our initial
business combination.
If we seek shareholder approval of our initial
business combination, our sponsor and members of our management team have agreed to vote in favor of such initial business combination,
regardless of how our public shareholders vote.
Our sponsor owns, on an as-converted basis,
20% of our outstanding ordinary shares. Our sponsor and members of our management team also may from time to time purchase Class A ordinary
shares prior to the completion of our initial business combination. Our amended and restated memorandum and articles of association provides
that, if we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary
resolution under Cayman Islands law, which requires the affirmative vote of holders of a majority of the ordinary shares, represented
in person or by proxy, who attend and vote at a general meeting of the Company. As a result, in addition to our initial shareholders’
founder shares, we would need 7,500,001, or 37.5% (assuming all issued and outstanding shares are voted), or 1,250,001, or 6.25% (assuming
only the minimum number of shares representing a quorum are voted), of the 20,000,000 public shares sold in our initial public offering
to be voted in favor of an initial business combination in order to have our initial business combination approved. Accordingly, if we
seek shareholder approval of our initial business combination, the agreement by our sponsor and our management team to vote in favor of
our initial business combination will increase the likelihood that we will receive the requisite shareholder approval for such initial
business combination.
The ability of our public shareholders to
redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it
difficult for us to enter into a business combination with a target.
We may seek to enter into a business combination
transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount
of cash. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing condition and, as
a result, would not be able to proceed with the business combination. Furthermore, in no event will we redeem our public shares in an
amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination and payment
of deferred underwriting commissions (so that we do not then become subject to the SEC’s “penny stock” rules) or any
greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. Consequently,
if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 upon consummation
of our initial business combination and payment of deferred underwriting commissions or such greater amount necessary to satisfy a closing
condition as described above, we would not proceed with such redemption and the related business combination and may instead search for
an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business
combination transaction with us.
The ability of our public shareholders to
exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination
or optimize our capital structure.
At the time we enter into an agreement for our
initial business combination, we will not know how many shareholders may exercise their redemption rights, and therefore will need to
structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial business
combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have
a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements, or
arrange for third-party financing. In addition, if a large number of shares are submitted for redemption, we may need to restructure
the transaction to reserve a greater portion of the cash in the trust account or arrange for additional third-party financing. Raising
additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable
levels. Furthermore, this dilution would increase to the extent that the anti-dilution provisions of the Class B ordinary shares
result in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares
at the time of our business combination. The above considerations may limit our ability to complete the most desirable business combination
available to us or optimize our capital structure. The amount of the deferred underwriting commissions payable to the representative will
not be adjusted for any shares that are redeemed in connection with an initial business combination. The per-share amount we will
distribute to shareholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and
after such redemptions, the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting commissions.
The ability of our public shareholders to
exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination
would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination agreement
requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash
at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business combination
is unsuccessful, you would not receive your pro rata portion of the funds in the trust account until we liquidate the trust account. If
you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may
trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your
investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your shares
in the open market.
The requirement that we consummate an initial
business combination within 24 months after the closing of our initial public offering may give potential target businesses leverage over
us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination
targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination
on terms that would produce value for our shareholders.
Any potential target business with which we enter
into negotiations concerning a business combination will be aware that we must consummate an initial business combination within 24 months
from the closing of our initial public offering. Consequently, such target business may obtain leverage over us in negotiating a business
combination, knowing that if we do not complete our initial business combination within the required time period with that particular
target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we
get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial
business combination on terms that we would have rejected upon a more comprehensive investigation.
We may not be able to consummate an initial
business combination within 24 months after the closing of our initial public offering, in which case we would cease all operations except
for the purpose of winding up and we would redeem our public shares and liquidate.
We may not be able to find a suitable target business
and consummate an initial business combination within 24 months after the closing of our initial public offering. Our ability to
complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt
markets and the other risks described herein. For example, the outbreak of COVID-19 continues both in the U.S. and globally and,
while the extent of the impact of the outbreak on us will depend on future developments, it could limit our ability to complete our initial
business combination, including as a result of increased market volatility, decreased market liquidity and third-party financing
being unavailable on terms acceptable to us or at all. Additionally, the COVID-19 outbreak may negatively impact businesses we may
seek to acquire. If we have not consummated an initial business combination within such applicable time period, we will: (i) cease all
operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter,
redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account,
including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less
up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption
will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions,
if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders
and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims
of creditors and the requirements of other applicable law. Our amended and restated memorandum and articles of association provides that,
if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures
with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter,
subject to applicable Cayman Islands law. In either such case, our public shareholders may receive only $10.00 per public share, or less
than $10.00 per public share, on the redemption of their shares, and our warrants will expire worthless. See “— If third parties
bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by
shareholders may be less than $10.00 per public share” and other risk factors herein.
If we seek shareholder approval of our initial
business combination, our sponsor, directors, executive officers, advisors and their affiliates may elect to purchase public shares or
warrants, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A ordinary
shares or public warrants.
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer
rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase public shares or warrants in privately negotiated
transactions or in the open market either prior to or following the completion of our initial business combination, although they are
under no obligation to do so. However, other than as expressly stated herein, they have no current commitments, plans or intentions to
engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust
account will be used to purchase public shares or warrants in such transactions.
In the event that our sponsor, directors, executive
officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already
elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their
shares. The purpose of any such transaction could be to (1) vote in favor of the business combination and thereby increase the likelihood
of obtaining shareholder approval of the business combination, (2) reduce the number of public warrants outstanding or vote such warrants
on any matters submitted to the warrant holders for approval in connection with our initial business combination or (3) satisfy a closing
condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our
initial business combination, where it appears that such requirement would otherwise not be met. Any such purchases of our securities
may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases
are made, the public “float” of our Class A ordinary shares or public warrants may be reduced and the number of beneficial
holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities
on a national securities exchange. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the
extent such purchasers are subject to such reporting requirements. See “Item 1. Business — Permitted Purchases and Other Transactions
with Respect to Our Securities” for a description of how our sponsor, directors, executive officers, advisors or their affiliates
will select which shareholders to purchase securities from in any private transaction.
Because of our limited resources and the
significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination.
If we do not complete our initial business combination within the required time period, our public shareholders may receive only approximately
$10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We expect to encounter intense competition from
other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships),
other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire.
Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly
or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater
technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited
when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire
with the net proceeds of our initial public offering and the sale of the private placement warrants, our ability to compete with respect
to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive
limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer
holders of our public shares the right to redeem their shares for cash at the time of our initial business combination in conjunction
with a shareholder vote or via a tender offer. Target companies will be aware that this may reduce the resources available to us for our
initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business
combination. If we have not consummated our initial business combination within the required time period, our public shareholders may
receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our
warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could
be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per public share” and other
risk factors herein.
As the number of special purpose acquisition
companies evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive targets.
This could increase the cost of our initial business combination and could even result in our inability to find a target or to consummate
an initial business combination.
In recent years, the number of special purpose
acquisition companies that have been formed has increased substantially. Many potential targets for special purpose acquisition companies
have already entered into an initial business combination, and there are still many special purpose acquisition companies preparing for
an initial public offering, as well as many such companies currently in registration. As a result, at times, fewer attractive targets
may be available to consummate an initial business combination.
In addition, because there are more special purpose
acquisition companies seeking to enter into an initial business combination with available targets, the competition for available targets
with attractive fundamentals or business models may increase, which could cause targets companies to demand improved financial terms.
Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions including
between the U.S. and China and between Russia and Ukraine, or increases in the cost of additional capital needed to close business combinations
or operate targets post-business combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability
to find and consummate an initial business combination, and may result in our inability to consummate an initial business combination
on terms favorable to our investors altogether.
Changes in the market for directors and
officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination.
In recent months, the market for directors and
officers liability insurance for special purpose acquisition companies has changed in ways adverse to us and our management team. Fewer
insurance companies are offering quotes for directors and officers liability coverage, the premiums charged for such policies have generally
increased and the terms of such policies have generally become less favorable. These trends may continue into the future.
The increased cost and decreased availability
of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate an initial business
combination. In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public company,
the post-business combination entity might need to incur greater expense, accept less favorable terms or both. However, any failure
to obtain adequate directors and officers liability insurance could have an adverse impact on the post-business combination’s
ability to attract and retain qualified officers and directors.
In addition, even after we were to complete an
initial business combination, our directors and officers could still be subject to potential liability from claims arising from conduct
alleged to have occurred prior to the initial business combination. As a result, in order to protect our directors and officers, the post-business combination
entity may need to purchase additional insurance with respect to any such claims (“run-off insurance”). The need for
run-off insurance would be an added expense for the post-business combination entity, and could interfere with or frustrate
our ability to consummate an initial business combination on terms favorable to our investors.
We may engage our underwriter or one of
its affiliates to provide additional services to us, which may include acting as financial advisor in connection with an initial business
combination or as placement agent in connection with a related financing transaction. Our underwriter is entitled to receive deferred
commissions that will be released from the trust only on a completion of an initial business combination. These financial incentives may
cause them to have potential conflicts of interest in rendering any such additional services to us, including, for example, in connection
with the sourcing and consummation of an initial business combination.
We may engage our underwriter or one of its affiliates
to provide additional services to us after, including, for example, identifying potential targets, providing financial advisory services,
acting as a placement agent in a private offering or arranging debt financing. We may pay our underwriter or its affiliate fair and reasonable
fees or other compensation that would be determined at that time in an arm’s length negotiation; provided that no agreement will
be entered into with our underwriter or its affiliates and no fees or other compensation for such services were paid to our underwriter
or its affiliates prior to the date that was 60 days from the date of our final prospectus, unless such payment would not be deemed underwriter’s
compensation in connection with our initial public offering. The underwriter is also entitled to receive deferred commissions that are
conditioned on the completion of an initial business combination. The underwriter’s or its affiliates’ financial interests
tied to the consummation of a business combination transaction may give rise to potential conflicts of interest in providing any such
additional services to us, including potential conflicts of interest in connection with the sourcing and consummation of an initial business
combination.
Our search for a business combination, and
any target business with which we ultimately consummate a business combination, may be materially adversely affected by the coronavirus
(COVID-19) outbreak and the status of debt and equity markets.
On March 11, 2020 the World Health Organization
characterized the coronavirus (COVID-19) outbreak as a “pandemic”. The COVID-19 outbreak has resulted, and a significant
outbreak of other infectious diseases could result, in a widespread health crisis that adversely affects the economies and financial markets
worldwide, and the business of any potential target business with which we consummate a business combination could be materially and adversely
affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 continue to
restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services
providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our
search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new
information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among
others. While vaccines for COVID-19 are being, and have been developed, there is no guarantee that any such vaccine will be durable
and effective consistent with current expectations. In addition, if any treatment of vaccine for COVID-19 is ineffective or underutilized,
any impact on our business may be prolonged. If the disruptions posed by COVID-19 or other matters of global concern continue for
an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately
consummate a business combination, may be materially adversely affected. In addition, our ability to consummate a transaction may be dependent
on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events, including as a result of increased
market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all.
Finally, the outbreak of COVID-19 may also
have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those related to
the market for our securities and cross-border transactions.
Changes in laws or regulations, or a failure
to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our business
combination and results of operations.
We are subject to laws and regulations enacted
by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal requirements. Compliance
with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their
interpretation and application may also change from time to time and those changes could have a material adverse effect on the business,
investments and results of our operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied,
could have a material adverse effect on our business, including our ability to negotiate and complete our business combination and results
of operations.
On March 30, 2022, the SEC issued proposed rules
(the “2022 Proposed Rules”) relating to, among other items, enhancing disclosures in business combination transactions involving
SPACs and private operating companies; amending the financial statement requirements applicable to transactions involving shell companies;
effectively limiting the use of projections in SEC filings in connection with proposed business combination transactions; increasing the
potential liability of certain participants in proposed business combination transactions; and the extent to which SPACs could become
subject to regulation under the Investment Company Act. The 2022 Proposed Rules, if adopted, whether in the form proposed or in revised
form, and certain positions and legal conclusions expressed by the SEC in connection with the 2022 Proposed Rules may materially adversely
affect our ability to negotiate and complete our business combination and may increase the costs and time related thereto.
Our search for a business combination, and
any target business with which we may ultimately consummate a business combination, may be materially adversely affected by the geopolitical
conditions resulting from the invasion of Ukraine and subsequent sanctions against Russia, Belarus and related individuals and entities
and the status of debt and equity markets, as well as protectionist legislation in markets around the world.
United States and global markets
are experiencing volatility and disruption following the escalation of geopolitical tensions and the recent invasion of Ukraine by Russia
in February 2022. In response to such invasion, the North Atlantic Treaty Organization (“NATO”) deployed additional military
forces to eastern Europe, and the United States, the United Kingdom, the European Union and other countries have announced various sanctions
and restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain financial institutions
from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system. Certain countries, including the United States,
have also provided and may continue to provide military aid or other assistance to Ukraine during the ongoing military conflict, increasing
geopolitical tensions with Russia. The invasion of Ukraine by Russia and the resulting measures that have been taken, and could be taken
in the future, by NATO, the United States, the United Kingdom, the European Union and other countries have created global security concerns
that could have a lasting impact on regional and global economies. Although the length and impact of the ongoing military conflict in
Ukraine is highly unpredictable, the conflict could lead to market disruptions, including significant volatility in commodity prices,
credit and capital markets, as well as supply chain interruptions. Additionally, Russian military actions and the resulting sanctions
could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.
Risks Relating to Our Sponsor and Management
Since our sponsor, executive officers, and
directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to public
shares they may acquire during or after our initial public offering), a conflict of interest may arise in determining whether a particular
business combination target is appropriate for our initial business combination.
On February 8, 2021, the sponsor paid an aggregate
of $25,000 for certain offering costs on behalf of the Company in exchange for issuance of 7,187,500 founder shares, or approximately
$0.004 per founder share. On February 25, 2021, the sponsor surrendered 1,437,500 Class B ordinary shares for no consideration, resulting
in an aggregate of 5,750,000 founder shares outstanding. On February 25, 2021, the sponsor transferred 40,000 founder shares to each of
the independent directors. The recipient will not be subject to the forfeiture provisions described above. On June 28, 2021, the over-allotment
option expired, and the sponsor forfeited 750,000 founder shares. As a result, as of December 31, 2022, there were 5,000,000 founder shares
outstanding, and our sponsor owned 4,880,000 founder shares.
Prior to the initial investment in the company
of $25,000 by the sponsor, the company had no assets, tangible or intangible. The per share price of the founder shares was determined
by dividing the amount contributed to the company by the number of founder shares issued. The founder shares will be worthless if we do
not complete an initial business combination. In addition, our sponsor purchased an aggregate of 4,333,333 private placement warrants,
each exercisable to purchase one Class A ordinary share at $11.50 per share, subject to adjustment, at a price of $1.50 per warrant ($6,500,000
in the aggregate), in a private placement that closed simultaneously with the closing of our initial public offering. If we do not consummate
an initial business within 24 months from the closing of our initial public offering, the private placement warrants will expire
worthless. The personal and financial interests of our executive officers and directors may influence their motivation in identifying
and selecting a target business combination, completing an initial business combination and influencing the operation of the business
following the initial business combination. This risk may become more acute as the 24-month anniversary of the closing of our initial
public offering nears, which is the deadline for our consummation of an initial business combination.
Our officers and directors presently have,
and any of them in the future may have additional, fiduciary or contractual obligations to other entities, including another blank check
company, and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Until we consummate our initial business combination,
we intend to engage in the business of identifying and combining with one or more businesses. Each of our officers and directors presently
has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities pursuant to which such
officer or director is or will be required to present a business combination opportunity to such entity, subject to his or her fiduciary
duties under Cayman Islands law. Accordingly, they may have conflicts of interest in determining to which entity a particular business
opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to
another entity prior to its presentation to us, subject to their fiduciary duties under Cayman Islands law.
In addition, our founders and our directors and
officers, or any of their respective affiliates may in the future become affiliated with other blank check companies that may have acquisition
objectives that are similar to ours. Accordingly, they may have conflicts of interest in determining to which entity a particular business
opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to
such other blank check companies prior to its presentation to us, subject to our officers’ and directors’ fiduciary duties
under Cayman Islands law. Our amended and restated memorandum and articles of association provides that, to the fullest extent permitted
by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed
by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and
(ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter
which may be a corporate opportunity for any director or officer on the one hand, and us, on the other.
Our executive officers, directors, security
holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits
our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in
any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may
enter into a business combination with a target business that is affiliated with our sponsor, our directors or executive officers, although
we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business
activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
The personal and financial interests of our directors
and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination.
Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target business may result in
a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate
and in our shareholders’ best interest. If this were the case, it would be a breach of their fiduciary duties to us as a matter
of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing on our shareholders’
rights. However, we might not ultimately be successful in any claim we may make against them for such reason.
Our executive officers and directors will
allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to
our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our executive officers and directors are not required
to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our
operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees
prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors
for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number
of hours per week to our affairs.
Our independent directors also serve as officers
and board members for other entities. If our executive officers’ and directors’ other business affairs require them to devote
substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time
to our affairs which may have a negative impact on our ability to complete our initial business combination.
Involvement of members of our management
and companies with which they are affiliated in civil disputes and litigation, governmental investigations or negative publicity unrelated
to our business affairs could materially impact our ability to consummate an initial business combination.
Members of our management team and companies with
which they are affiliated have been, and in the future will continue to be, involved in a wide variety of business affairs, including
transactions, such as sales and purchases of businesses, and ongoing operations. As a result of such involvement, members of our management
and companies with which they are affiliated in have been, and may in the future be, involved in civil disputes, litigation, governmental
investigations and negative publicity relating to their business affairs. Any such claims, investigations, lawsuits or negative publicity
may be detrimental to our reputation and could negatively affect our ability to identify and complete an initial business combination
in a material manner and may have an adverse effect on the price of our securities.
Risks Relating to Our Securities
We are a blank check company with no operating
history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are an exempted company under the laws of the
Cayman Islands with no operating results. Because we lack an operating history, you have no basis upon which to evaluate our ability to
achieve our business objective of completing our initial business combination with one or more target businesses. We have no plans, arrangements
or understandings with any prospective target business concerning a business combination and may be unable to complete our initial business
combination. If we fail to complete our initial business combination, we will never generate any operating revenues.
Past performance by Mr. Huang and others
on our management team, MSD Capital, or MSD Partners, or Panacea or any of their respective affiliates may not be indicative of future
performance of an investment in us or in the future performance of the business we may acquire.
Information regarding performance by, or businesses
associated with, Mr. Huang and others on our management team or their respective affiliates, including MSD Partners, Panacea and
MSD Capital, is presented for informational purposes only. Any past experience of and performance by Mr. Huang and others on our
management team or their respective affiliates, including MSD Partners, Panacea and MSD Capital, is not a guarantee either: (1) that we
will be able to successfully identify a suitable candidate for our initial business combination; or (2) of any results with respect to
any initial business combination we may consummate. You should not rely on the historical record of our management team or any of their
respective affiliates’ performance, including the performance of Mr. Huang or MSD Partners or MSD Capital or Panacea, as indicative
of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. Our management team
has no experience in operating special purpose acquisition companies. An investment in us is not an investment in either MSD Partners
or MSD Capital or Panacea.
You will not have any rights or interests
in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced
to sell your public shares or warrants, potentially at a loss.
Our public shareholders will be entitled to receive
funds from the trust account only upon the earlier to occur of: (i) our completion of an initial business combination, and then only in
connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein,
(ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum
and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares
the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if
we do not complete our initial business combination within 24 months from the closing of our initial public offering or (B) with
respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination
activity, and (iii) the redemption of our public shares if we have not consummated an initial business within 24 months from the
closing of our initial public offering, subject to applicable law and as further described herein. Public shareholders who redeem their
Class A ordinary shares in connection with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled
to funds from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not consummated
an initial business combination within 24 months from the closing of our initial public offering, with respect to such Class A ordinary
shares so redeemed. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. Holders
of warrants will not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate
your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
You will not be entitled to protections
normally afforded to investors of many other blank check companies.
Since the net proceeds of our initial public offering
and the sale of the private placement warrants are intended to be used to complete an initial business combination with a target business
that has not been selected, we may be deemed to be a “blank check” company under the United States securities laws. However,
because we had net tangible assets in excess of $5,000,000 upon the completion of our initial public offering and the sale of the private
placement warrants and have filed a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt
from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be
afforded the benefits or protections of those rules. Among other things, this means our units were immediately tradable and we have a
longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if our initial public
offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us
unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination.
In evaluating a prospective target business
for our initial business combination, our management will rely on the availability of the funds from the sale of the forward purchase
units to be used as part of the consideration to the sellers in the initial business combination. If the sale of the forward purchase
units does not close, we may lack sufficient funds to consummate our initial business combination.
Prior to the consummation of our initial public
offering, we entered into a forward purchase agreement with the forward purchase investor providing for the purchase of up to $20,000,000
of forward purchase units, at a purchase price of $10.00 per unit, in a private placement which occurred concurrently with the closing
of our initial business combination. However, if the sale of the forward purchase units does not close, we may lack sufficient funds to
consummate our initial business combination. The number of forward purchase units to be purchased by the forward purchase investor will
be subject to the forward purchase investor’s sole discretion. The obligation to purchase the forward purchase units is subject
to customary closing conditions, including that our initial business combination must be consummated substantially concurrently with,
and immediately following, the purchase of the forward purchase units. The obligations of the forward purchase investor under the forward
purchase agreement do not depend on whether any Class A ordinary shares held by public shareholders are redeemed by the company and the
amount of forward purchase units sold pursuant to the forward purchase agreement will be subject to the forward purchase investor’s
sole discretion. The forward purchase shares will generally be identical to the Class A ordinary shares included in the units sold in
our initial public offering, except that they will be entitled to certain registration rights, as described herein. The forward purchase
warrants will have the same terms as the private placement warrants so long as they are held by the forward purchase investor or its permitted
assignees and transferees.
If a shareholder fails to receive notice
of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for
tendering its shares, such shares may not be redeemed.
We will comply with the proxy rules or tender
offer rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with
these rules, if a shareholder fails to receive our proxy solicitation or tender offer materials, as applicable, such shareholder may not
become aware of the opportunity to redeem its shares. In addition, the proxy solicitation or tender offer materials, as applicable, that
we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures
that must be complied with in order to validly redeem or tender public shares. In the event that a shareholder fails to comply with these
procedures, its shares may not be redeemed. See “Item 1. Business — Effecting Our Initial Business Combination — Tendering
Share Certificates in Connection with a Tender Offer or Redemption Rights.”
Nasdaq may delist our securities from trading
on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading
restrictions.
We were approved to list our units on Nasdaq on
the date of our final prospectus and our Class A ordinary shares and warrants were also listed on Nasdaq promptly after their date of
separation. Although after giving effect to our initial public offering we expect to meet, on a pro forma basis, the minimum initial listing
standards set forth in Nasdaq’s listing standards, our securities may not be, or may not continue to be, listed on Nasdaq in the
future or prior to the completion of our initial business combination. In order to continue listing our securities on Nasdaq prior to
the completion of our initial business combination, we must maintain certain financial, distribution and share price levels. Generally,
we must maintain a minimum amount in shareholders’ equity (generally $2,500,000) and a minimum number of holders of our securities
(generally 300 public holders). Additionally, our units will not be traded after completion of our initial business combination and, in
connection with our initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements,
which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities
on Nasdaq. For instance, the share price of our securities would generally be required to be at least $4.00 per share and our shareholders’
equity would generally be required to be at least $4,000,000 and we would be required to have a minimum of 300 round lot holders (with
at least 50% of such round lot holders holding securities with a market value of at least $2,500). We may not be able to meet those initial
listing requirements at that time.
If Nasdaq delists our securities from trading
on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be
quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
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a limited availability of market quotations for our securities; |
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reduced liquidity for our securities; |
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a determination that our Class A ordinary shares are a “penny stock” which will require brokers trading in our Class A ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
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a limited amount of news and analyst coverage; and |
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a decreased ability to issue additional securities or obtain additional financing in the future. |
The National Securities Markets Improvement Act
of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred
to as “covered securities.” Because our units and our Class A ordinary shares and warrants are listed on Nasdaq, our units,
Class A ordinary shares and warrants qualify as covered securities under the statute. Although the states are preempted from regulating
the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and,
if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.
While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies,
other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers,
or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer
listed on Nasdaq, our securities would not qualify as covered securities under the statute and we would be subject to regulation in each
state in which we offer our securities.
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders
are deemed to hold in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess
of 15% of our Class A ordinary shares.
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer
rules, our amended and restated memorandum and articles of association provides that a public shareholder, together with any affiliate
of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under
Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the
shares sold in our initial public offering, which we refer to as the “Excess Shares,” without our prior consent. However,
we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial
business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business
combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally,
you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as
a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to
sell your shares in open market transactions, potentially at a loss.
If the net proceeds of our initial public
offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for
what remains of the 24 months following the closing of our initial public offering, it could limit the amount available to fund our search
for a target business or businesses and complete our initial business combination, and we will depend on loans from our sponsor or management
team to fund our search and to complete our initial business combination.
Of the net proceeds of our initial public offering
and the sale of the private placement warrants, only $1,000,000 is available to us initially outside the trust account to fund our working
capital requirements. We believe that the funds available to us outside of the trust account, together with funds available from loans
from our sponsor, members of our management team or any of their affiliates is still sufficient to allow us to operate for at least the
24 months following the closing of our initial public offering; however, our estimate may not be accurate, and our sponsor, members
of our management team or any of their affiliates are under no obligation to advance funds to us in such circumstances. Of the funds available
to us, we expect to use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business.
We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent
designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more
favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention
to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently
required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching
for, or conduct due diligence with respect to, a target business.
If we are required to seek additional capital,
we would need to borrow funds from our sponsor, members of our management team or any of their affiliates or other third parties to operate
or may be forced to liquidate. Neither our sponsor, members of our management team nor any of their affiliates is under any obligation
to advance funds to us in such circumstances. Any such advances may be repaid only from funds held outside the trust account or from funds
released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into warrants of
the post-business combination entity at a price of $1.50 per warrant at the option of the lender. The warrants would be identical
to the private placement warrants. Prior to the completion of our initial business combination, we do not expect to seek loans from parties
other than our sponsor, members of our management team or any of their affiliates as we do not believe third parties will be willing to
loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account. If we do not complete our
initial business combination within the required time period because we do not have sufficient funds available to us, we will be forced
to cease operations and liquidate the trust account. Consequently, our public shareholders may only receive an estimated $10.00 per public
share, or possibly less, on our redemption of our public shares, and our warrants will expire worthless. See “— If third parties
bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by
shareholders may be less than $10.00 per public share” and other risk factors herein.
Subsequent to our completion of our initial
business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have
a significant negative effect on our financial condition, results of operations and the share price of our securities, which could cause
you to lose some or all of your investment.
Even if we conduct due diligence on a target business
with which we combine, this diligence may not surface all material issues with a particular target business. In addition, factors outside
of the target business and outside of our control may later arise. As a result of these factors, we may be forced to later write-down or
write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even
if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a
manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate
impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our
securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result
of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly,
any holders who choose to retain their securities following the business combination could suffer a reduction in the value of their securities.
Such holders are unlikely to have a remedy for such reduction in value.
If third parties bring claims against us,
the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than
$10.00 per public share.
Our placing of funds in the trust account may
not protect those funds from third party claims against us. Although we will seek to have all vendors, service providers (excluding our
independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements
with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public
shareholders, such parties may not execute such agreements, or even if they execute such agreements, they may not be prevented from bringing
claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar
claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim
against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims
to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter
into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would
be significantly more beneficial to us than any alternative.
Examples of possible instances where we may engage
a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills
are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases
where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities
will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements
with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we have not consummated
an initial business combination within 24 months from the closing of our initial public offering, or upon the exercise of a redemption
right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were
not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount
received by public shareholders could be less than the $10.00 per public share initially held in the trust account, due to claims of such
creditors. Pursuant to that certain letter agreement among the company, the sponsor and the company’s executive officers and directors,
our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (excluding our independent registered
public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering
into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i) $10.00 per public share and (ii) the
actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per
public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax
obligations, provided that such liability will not apply to any claims by a third party or prospective target business who executed a
waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriter
of our initial public offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that
an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability
for such third party claims. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently
verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets
are securities of our company. Our sponsor may not be able to satisfy those obligations. None of our officers or directors will indemnify
us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Our directors may decide not to enforce
the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution
to our public shareholders.
In the event that the proceeds in the trust account
are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount per share held in the trust account as of the date
of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each
case net of the interest that may be withdrawn to pay our tax obligations, and our sponsor asserts that it is unable to satisfy its obligations
or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take
legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors
would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent
directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance.
If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available
for distribution to our public shareholders may be reduced below $10.00 per public share.
We may not have sufficient funds to satisfy
indemnification claims of our directors and executive officers.
We have agreed to indemnify our officers and directors
to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right, title, interest or claim of
any kind in or to any monies in the trust account and to not seek recourse against the trust account for any reason whatsoever (except
to the extent they are entitled to funds from the trust account due to their ownership of public shares). Accordingly, any indemnification
provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the trust account or (ii) we consummate an
initial business combination. Our obligation to indemnify our officers and directors may discourage shareholders from bringing a lawsuit
against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood
of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and
our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement
and damage awards against our officers and directors pursuant to these indemnification provisions.
The securities in which we invest the proceeds
held in the trust account could bear a negative rate of interest, which could reduce the interest income available for payment of taxes
or reduce the value of the assets held in trust such that the per share redemption amount received by shareholders may be less than $10.00
per share.
The net proceeds of our initial public offering
and certain proceeds from the sale of the private placement warrants, in the amount of $200,000,000 may only be invested in direct U.S.
Treasury obligations having a maturity of 185 days or less, or in certain money market funds which invest only in direct U.S. Treasury
obligations. While short-term U.S. Treasury obligations currently yield a positive rate of interest, they have briefly yielded negative
interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market
Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States.
In the event of very low or negative yields, the amount of interest income (which we may withdraw to pay income taxes, if any) would be
reduced. In the event that we are unable to complete our initial business combination, our public shareholders are entitled to receive
their pro-rata share of the proceeds held in the trust account, plus any interest income. If the balance of the trust account is
reduced below $200,000,000 as a result of negative interest rates, the amount of funds in the trust account available for distribution
to our public shareholders may be reduced below $10.00 per share.
If, after we distribute the proceeds in
the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition
is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our
board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board
of directors and us to claims of punitive damages.
If, after we distribute the proceeds in the trust
account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition
is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor
and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result,
a bankruptcy or insolvency court could seek to recover some or all amounts received by our shareholders. In addition, our board of directors
may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us
to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors.
If, before distributing the proceeds in
the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition
is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders
and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust
account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition
is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or winding-up law,
and may be included in our bankruptcy or insolvency estate and subject to the claims of third parties with priority over the claims of
our shareholders. To the extent any bankruptcy or insolvency claims deplete the trust account, the per-share amount that would otherwise
be received by our shareholders in connection with our liquidation may be reduced.
If we are deemed to be an investment company
under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted,
which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company under
the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and |
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restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial business combination. |
In addition, we may have imposed upon us burdensome
requirements, including:
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registration as an investment company with the SEC; |
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adoption of a specific form of corporate structure; and |
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reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to. |
In order not to be regulated as an investment
company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business
other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding
or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government securities and cash
items) on an unconsolidated basis. Our business is to identify and complete a business combination and thereafter to operate the post-business combination
business or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We
do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our anticipated principal
activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in
United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity
of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company
Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to
invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan
targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant
bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment
Company Act. The trust account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of
our initial business combination; (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to
amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide
holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or
to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of our
initial public offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares or
pre-initial business combination activity, and (iii) the redemption of our public shares if we have not consummated an initial business
within 24 months from the closing of our initial public offering, subject to applicable law and as further described herein. If we
do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject
to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have
not allotted funds and may hinder our ability to complete a business combination. If we do not complete our initial business combination
within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances,
on the liquidation of our trust account and our warrants will expire worthless.
Changes in laws or regulations, or a failure
to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial
business combination, and results of operations.
We are subject to laws and regulations enacted
by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal requirements. Compliance
with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their
interpretation and application may also change from time to time and those changes could have a material adverse effect on our business,
investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied,
could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination,
and results of operations.
If we do not consummate an initial business
combination within 24 months from the closing of our initial public offering, our public shareholders may be forced to wait beyond such
24 months before redemption from our trust account.
If we do not consummate an initial business combination
within 24 months from the closing of our initial public offering, the proceeds 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 income taxes, if any (less up to $100,000 of
interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. Any redemption
of public shareholders from the trust account will be effected automatically by function of our amended and restated memorandum and articles
of association prior to any voluntary winding up. If we are required to wind up, liquidate the trust account and distribute such amount
therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must
comply with the applicable provisions of the Companies Act. In that case, investors may be forced to wait beyond 24 months from the
closing of our initial public offering before the redemption proceeds of our trust account become available to them, and they receive
the return of their pro rata portion of the proceeds from our trust account. We have no obligation to return funds to investors prior
to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business combination or amend certain provisions
of our amended and restated memorandum and articles of association, and only then in cases where investors have sought to redeem their
Class A ordinary shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we do not
complete our initial business combination and do not amend certain provisions of our amended and restated memorandum and articles of association.
Our amended and restated memorandum and articles of association provides that, if we wind up for any other reason prior to the consummation
of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly
as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
Our shareholders may be held liable for
claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an insolvent liquidation,
any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date
on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result,
a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors may be viewed as having
breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves and our company
to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. Claims may be brought against
us for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid
out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business would be guilty
of an offence and may be liable for a fine of $18,292.68 and imprisonment for five years in the Cayman Islands.
We may not hold an annual general meeting
until after the consummation of our initial business combination.
In accordance with Nasdaq corporate governance
requirements, we are not required to hold an annual general meeting until no later than one year after our first fiscal year end following
our listing on Nasdaq. As an exempted company, there is no requirement under the Companies Act for us to hold annual or general meetings
to appoint directors. Until we hold an annual general meeting, public shareholders may not be afforded the opportunity to appoint directors
and to discuss company affairs with management. Our board of directors is divided into three classes with only one class of directors
being elected in each year and each class (except for those directors appointed prior to our first annual general meeting) serving a three-year term.
Holders of Class A ordinary shares will
not be entitled to vote on any appointment of directors we hold prior to the completion of our initial business combination.
Prior to the completion of our initial business
combination, only holders of our founder shares will have the right to vote on the appointment of directors. Holders of our public shares
will not be entitled to vote on the appointment of directors during such time. In addition, prior to the completion of an initial business
combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. Accordingly, you
may not have any say in the management of our company prior to the consummation of an initial business combination.
We did not register the Class A ordinary
shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at the time of our initial public
offering, and we are not registering such securities at this time. Furthermore, such registration may not be in place when an investor
desires to exercise warrants, thus precluding such investor from being able to exercise its warrants and causing such warrants to expire
worthless.
We did not register the Class A ordinary shares
issuable upon exercise of the warrants under the Securities Act or any state securities laws at the time of the initial public offering,
and we are not registering such securities at this time. However, under the terms of the warrant agreement, we have agreed to use our
commercially reasonable efforts to file a registration statement under the Securities Act covering such shares and to maintain the effectiveness
of such registration statement and a current prospectus relating to the Class A ordinary shares issuable upon exercise of the warrants
until the expiration or redemption of the warrants in accordance with the provisions of the warrant agreement. We may not able to do so
if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement
or prospectus, the financial statements contained or incorporated by reference therein are not current, complete or correct or the SEC
issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act, we will be required
to permit holders to exercise their warrants on a cashless basis, in which case, the number of Class A ordinary shares that you will receive
upon cashless exercise will be based on a formula subject to a maximum amount of shares equal to 0.361 Class A ordinary shares per warrant
(subject to adjustment). However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue
any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified
under the securities laws of the state of the exercising holder, unless an exemption is available. Notwithstanding the above, if our Class
A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the
definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of
public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities
Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our
reasonable best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants
in the event that we are unable to register or qualify the shares underlying the warrants under the Securities Act or applicable state
securities laws. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration
or qualification, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire
worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price
solely for the Class A ordinary shares included in the units. There may be a circumstance where an exemption from registration exists
for holders of our private placement warrants to exercise their warrants while a corresponding exemption does not exist for holders of
the warrants included as part of units sold in our initial public offering. In such an instance, our sponsor and its transferees (which
may include our management team) would be able to exercise their warrants and sell the ordinary shares underlying their warrants while
holders of our public warrants would not be able to exercise their warrants and sell the underlying ordinary shares. If and when the warrants
become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for
sale under all applicable state securities laws.
The warrants may become exercisable and
redeemable for a security other than the Class A ordinary shares, and you will not have any information regarding such other security
at this time.
In certain situations, including if we are not
the surviving entity in our initial business combination, the warrants may become exercisable for a security other than the Class A ordinary
shares. As a result, if the surviving company redeems your warrants for securities pursuant to the warrant agreement, you may receive
a security in a company of which you do not have information at this time. Pursuant to the warrant agreement, the surviving company will
be required to use commercially reasonable efforts to register the issuance of the security underlying the warrants within twenty business
days of the closing of an initial business combination.
Our warrants and units committed to be issued
in connection with the forward purchase agreement are accounted for as a derivative liability and are recorded at fair value upon issuance
with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of our Class A ordinary
shares or may make it more difficult for us to consummate an initial business combination.
We account for our warrants and the units committed
to be issued in connection with the forward purchase agreement as a derivative liability and will record them at fair value upon issuance
with any changes in fair value each period reported in earnings as determined by us based upon a valuation report obtained from an independent
third party valuation firm. The impact of changes in fair value on earnings may have an adverse effect on the market price of our Class
A ordinary shares. In addition, potential targets may seek a SPAC that does not have warrants or units that are accounted for as a derivative
liability, which may make it more difficult for us to consummate an initial business combination with a target business.
Our warrants are accounted for as a derivative
liability and are recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may have an
adverse effect on the market price of our Class A ordinary shares or may make it more difficult for us to consummate an initial business
combination.
We account for our warrants as a derivative liability
and will record them at fair value upon issuance with any changes in fair value each period reported in earnings as determined by us based
upon a valuation report obtained from an independent third party valuation firm. The impact of changes in fair value on earnings may have
an adverse effect on the market price of our Class A ordinary shares. In addition, potential targets may seek a SPAC that does not have
warrants that are accounted for as a derivative liability, which may make it more difficult for us to consummate an initial Business Combination
with a target business.
The grant of registration rights to our
initial shareholders, holders of our private placement warrants and the purchaser of the forward purchase units may make it more difficult
to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our Class
A ordinary shares.
Pursuant to the registration and shareholder rights
agreement, our initial shareholders, and their permitted transferees can demand that we register the Class A ordinary shares into which
founder shares are convertible, the private placement warrants and the Class A ordinary shares issuable upon exercise of the private placement
warrants, and warrants that may be issued upon conversion of working capital loans and the Class A ordinary shares issuable upon conversion
of such warrants. Further, pursuant to the forward purchase agreement, we have agreed to use our reasonable best efforts (i) to file within
30 days after the closing of the initial business combination a registration statement for a secondary offering of the forward purchase
shares and the forward purchase warrants (and underlying Class A ordinary shares), (ii) to cause such registration statement to be declared
effective promptly thereafter but in no event later than 60 days after the initial filing, and (iii) to maintain the effectiveness of
such registration statement until the earliest of (A) the date on which the holders of the forward purchase securities or their assignees
cease to hold the securities covered thereby, and (B) the date all of the securities covered thereby can be sold publicly without restriction
or limitation under Rule 144 under the Securities Act. After such registration statement is declared effective, the holders of the forward
purchase securities may cause us to conduct firm commitment underwritten offerings, subject to certain limitations. In addition, the forward
purchase agreement provides for certain “piggy-back” registration rights to the holders of forward purchase securities to
include their securities in other registration statements filed by us. We will bear the cost of registering these securities. The registration
and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market
price of our Class A ordinary shares. In addition, the existence of the registration rights may make our initial business combination
more costly or difficult to conclude. This is because the shareholders of the target business may increase the equity stake they seek
in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our securities that is
expected when the securities owned by our initial shareholders or their permitted transferees are registered for resale.
Because we are neither limited to evaluating
a target business in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial
business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
We may pursue business combination opportunities
in any sector, except that we will not, under our amended and restated memorandum and articles of association, be permitted to effectuate
our initial business combination with another blank check company or similar company with nominal operations. Because we have not yet
selected or approached any specific target business with respect to a business combination, there is no basis to evaluate the possible
merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition
or prospects. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business
operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established
record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development
stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may
not properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore,
some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will
adversely impact a target business. An investment in our units may not ultimately prove to be more favorable to investors than a direct
investment, if such opportunity were available, in a business combination target. Accordingly, any holders who choose to retain their
securities following our initial business combination could suffer a reduction in the value of their securities. Such holders are unlikely
to have a remedy for such reduction in value.
We may seek acquisition opportunities in
industries or sectors which may or may not be outside of our management’s area of expertise.
We will consider a business combination outside
of our management’s area of expertise if a business combination target is presented to us and we determine that such candidate offers
an attractive acquisition opportunity for our company. Although our management will endeavor to evaluate the risks inherent in any particular
business combination target, we may not adequately ascertain or assess all of the significant risk factors. We also cannot assure you
that an investment in our units will not ultimately prove to be less favorable to investors than a direct investment, if an opportunity
were available, in a business combination target. In the event we elect to pursue an acquisition outside of the areas of our management’s
expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the information contained
in this Report regarding the areas of our management’s expertise would not be relevant to an understanding of the business that
we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors.
Accordingly, any holders who choose to retain their securities following our initial business combination could suffer a reduction in
the value of their securities. Such holders are unlikely to have a remedy for such reduction in value.
Although we have identified general criteria
that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target
that does not meet such criteria, and as a result, the target business with which we enter into our initial business combination may not
have attributes entirely consistent with our general criteria.
Although we have identified general criteria for
evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination
will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some
or all of these criteria, such combination may not be as successful as a combination with a business that does meet all of our general
criteria. In addition, if we announce a prospective business combination with a target that does not meet our general criteria, a greater
number of shareholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target
business that requires us to have a minimum net worth or a certain amount of cash. In addition, if shareholder approval of the transaction
is required by applicable law or stock exchange rule, or we decide to obtain shareholder approval for business or other reasons, it may
be more difficult for us to attain shareholder approval of our initial business combination if the target business does not meet our general
criteria. If we do not complete our initial business combination within the required time period, our public shareholders may receive
only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants
will expire worthless.
We are not required to obtain an opinion
from an independent accounting or investment banking firm, and consequently, you may have no assurance from an independent source that
the price we are paying for the business is fair to our shareholders from a financial point of view.
Unless we complete our initial business combination
with an affiliated entity, we are not required to obtain an opinion from an independent accounting firm or independent investment banking
firm which is a member of FINRA that the price we are paying is fair to our shareholders from a financial point of view. If no opinion
is obtained, our shareholders will be relying on the judgment of our board of directors, who will determine fair market value based on
standards generally accepted by the financial community. Such standards used will be disclosed in our proxy solicitation or tender offer
materials, as applicable, related to our initial business combination.
We may issue additional Class A ordinary
shares or preference shares to complete our initial business combination or under an employee incentive plan after completion of our initial
business combination. We may also issue Class A ordinary shares upon the conversion of the founder shares at a ratio greater than one-to-one
at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated memorandum
and articles of association. Any such issuances would dilute the interest of our shareholders and likely present other risks.
Our amended and restated memorandum and articles
of association authorizes the issuance of up to 500,000,000 Class A ordinary shares, par value $0.0001 per share, 50,000,000 Class B ordinary
shares, par value $0.0001 per share, and 5,000,000 preference shares, par value $0.0001 per share. There are currently 480,000,000 and
45,000,000 authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance which amount
does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the
Class B ordinary shares, if any. The Class B ordinary shares are automatically convertible into Class A ordinary shares at the time of
our initial business combination as described herein and in our amended and restated memorandum and articles of association. Immediately
after our initial public offering, there were no preference shares issued and outstanding.
We may issue a substantial number of additional
Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after completion
of our initial business combination. We may also issue Class A ordinary shares to redeem the warrants or upon conversion of the Class
B ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions
as set forth herein. However, our amended and restated memorandum and articles of association provides, among other things, that prior
to the completion of our initial business combination, we may not issue additional shares that would entitle the holders thereof to (i)
receive funds from the trust account or (ii) vote on any initial business combination or on any other proposal presented to shareholders
prior to or in connection with the completion of an initial business combination. These provisions of our amended and restated memorandum
and articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with
a shareholder vote. The issuance of additional ordinary or preference shares:
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may significantly dilute the equity interest of investors in our initial public offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares; |
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may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares; |
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could cause a change in control if a substantial number of our Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; |
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may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; |
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may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants; and |
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may not result in adjustment to the exercise price of our warrants. |
Our initial shareholders may receive additional
Class A ordinary shares if we issue shares to consummate an initial business combination.
The founder shares will automatically convert
into Class A ordinary shares on the first business day following the consummation of our initial business combination at a ratio such
that the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis,
20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of our initial public offering, plus
(ii) the sum of the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities
or rights issued or deemed issued, by the company in connection with or in relation to the consummation of the initial business combination,
excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued,
deemed issued, or to be issued, to any seller in the initial business combination, any private placement warrants issued to our sponsor,
members of our management team or any of their affiliates upon conversion of working capital loans and the forward purchase securities.
In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one to one.
Resources could be wasted in researching
acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another
business. If we do not complete our initial business combination within the required time period, our public shareholders may receive
only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants
will expire worthless.
We anticipate that the investigation of each specific
target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require
substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a
specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable.
Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination
for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred
which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we do not complete
our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public
share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We may be a passive foreign investment company,
or “PFIC,” which could result in adverse U.S. federal income tax consequences to U.S. investors.
If we are a “passive foreign investment
company” (“PFIC”) within the meaning of Section 1297(a) of the Internal Revenue Code of 1986, as amended (the “Code”)
for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of our Class A ordinary shares or warrants,
the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting requirements.
Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception. Depending
on the particular circumstances, the application of the start-up exception may be subject to uncertainty, and there cannot be any
assurance that we will qualify for the start-up exception. Accordingly, there can be no assurances with respect to our status as
a PFIC for our current taxable year or any subsequent taxable year. Our actual PFIC status for any taxable year, however, will not be
determinable until after the end of such taxable year. Moreover, if we determine we are a PFIC for any taxable year, upon written request,
we will endeavor to provide to a U.S. Holder such information as the Internal Revenue Service (“IRS”) may require, including
a PFIC Annual Information Statement, in order to enable the U.S. Holder to make and maintain a “qualified electing fund” election,
but there can be no assurance that we will timely provide such required information, and such election would be unavailable with respect
to our warrants in all cases. We urge U.S. investors to consult their tax advisors regarding the possible application of the PFIC rules.
We may reincorporate in another jurisdiction
in connection with our initial business combination and such reincorporation may result in taxes imposed on shareholders.
We may, in connection with our initial business
combination and subject to requisite shareholder approval under the Companies Act, reincorporate in the jurisdiction in which the target
company or business is located or in another jurisdiction. The transaction may require a shareholder or warrantholder to recognize taxable
income in the jurisdiction in which the shareholder or warrantholder is a tax resident or in which its members are resident if it is a
tax transparent entity. We do not intend to make any cash distributions to shareholders or warrantholders to pay such taxes. Shareholders
or warrantholders may be subject to withholding taxes or other taxes with respect to their ownership of us after the reincorporation.
After our initial business combination,
it is possible that a majority of our directors and officers will live outside the United States and all of our assets will be located
outside the United States; therefore investors may not be able to enforce federal securities laws or their other legal rights.
It is possible that after our initial business
combination, a majority of our directors and officers will reside outside of the United States and all of our assets will be located outside
of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United States to enforce their
legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United States courts predicated
upon civil liabilities and criminal penalties on our directors and officers under United States laws.
In particular, there is uncertainty as to whether
the courts of the Cayman Islands or any other applicable jurisdictions would recognize and enforce judgments of U.S. courts obtained against
us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state
in the United States or entertain original actions brought in the Cayman Islands or any other applicable jurisdiction’s courts against
us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.
We are dependent upon our executive officers
and directors and their loss could adversely affect our ability to operate.
Our operations are dependent upon a relatively
small group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the continued
service of our officers and directors, at least until we have completed our initial business combination. In addition, our executive officers
and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest
in allocating their time among various business activities, including identifying potential business combinations and monitoring the related
due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or executive
officers. The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on
us.
Our ability to successfully effect our initial
business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us
following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our
post-combination business.
Our ability to successfully effect our initial
business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however,
cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory
positions following our initial business combination, it is likely that some or all of the management of the target business will remain
in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you
that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating
a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
Our key personnel may negotiate employment
or consulting agreements with a target business in connection with a particular business combination, and a particular business combination
may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to receive compensation
following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular
business combination is the most advantageous.
Our key personnel may be able to remain with our
company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements
in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination
and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would
render to us after the completion of the business combination. Such negotiations also could make such key personnel’s retention
or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence their motivation
in identifying and selecting a target business. In addition, pursuant to an agreement entered into on the closing of our initial public
offering, our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals
for appointment to our board of directors, as long as the sponsor holds any securities covered by the registration and shareholder rights
agreement.
We may have a limited ability to assess
the management of a prospective target business and, as a result, may affect our initial business combination with a target business whose
management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting
our initial business combination with a prospective target business, our ability to assess the target business’s management may
be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target business’s management,
therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target
business’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and
profitability of the post-combination business may be negatively impacted. Accordingly, any holders who choose to retain their securities
following our initial business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have
a remedy for such reduction in value.
The officers and directors of an acquisition
candidate may resign upon completion of our initial business combination. The loss of a business combination target’s key personnel
could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition candidate’s key
personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain
members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial
business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
We may engage in a business combination
with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, executive officers,
directors or initial shareholders which may raise potential conflicts of interest.
In light of the involvement of our sponsor, executive
officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, executive officers,
directors or initial shareholders. Our directors also serve as officers and board members for other entities, including, without limitation,
those described under “Item 10. Directors, Executive Officers and Corporate Governance Directors and Executive Officers— Conflicts
of Interest.” Our sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar
to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination.
Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware
of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and
there have been no substantive discussions concerning a business combination with any such entity or entities. Although we will not be
specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined
that such affiliated entity met our criteria for a business combination as set forth in “Item 1 Business — Effecting Our Initial
Business Combination — Evaluation of a Target Business and Structuring of Our Initial Business Combination” and such transaction
was approved by a majority of our independent and disinterested directors. Despite our agreement to obtain an opinion from an independent
investment banking firm which is a member of FINRA or an independent valuation or accounting firm regarding the fairness to our company
from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our sponsor,
executive officers, directors or initial shareholders, potential conflicts of interest still may exist and, as a result, the terms of
the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest.
We may issue notes or other debt, or otherwise
incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively
impact the value of our shareholders’ investment in us.
Although we have no commitments as of the date
of this Report to issue any notes or other debt, or to otherwise incur debt following our initial public offering, we may choose to incur
substantial debt to complete our initial business combination. We and our officers have agreed that we will not incur any indebtedness
unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust
account. As such, no issuance of debt will affect the per share amount available for redemption from the trust account. Nevertheless,
the incurrence of debt could have a variety of negative effects, including:
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default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
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our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand; |
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our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding; |
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our inability to pay dividends on our Class A ordinary shares; |
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
We may only be able to complete one business
combination with the proceeds of our initial public offering and the sale of the private placement warrants, which will cause us to be
solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively
impact our operations and profitability.
The net proceeds from our initial public offering
and the sale of the private placement warrants provided us with up to $194,000,000 that we may use to complete our initial business combination
(after taking into account the $7,000,000 of deferred underwriting commissions being held in the trust account and the expenses of our
initial public offering). In addition, prior to the consummation of our initial public offering, we entered into a forward purchase agreement
with the forward purchase investor pursuant to which the forward purchase investor has agreed to purchase up to $20,000,000 of forward
purchase units in a private placement concurrently with the closing of our initial business combination. The proceeds from the sale of
forward purchase units may be used as part of the consideration to the sellers in our initial business combination, expenses in connection
with our initial business combination or for working capital in the post-transaction company. The obligation to purchase the forward
purchase units is subject to customary closing conditions, including that our initial business combination must be consummated substantially
concurrently with, and immediately following, the purchase of forward purchase units. The number of forward purchase units to be purchased
by the forward purchase investor will be subject to the forward purchase investor’s sole discretion. The obligations of the forward
purchase investor under the forward purchase agreement do not depend on whether any Class A ordinary shares held by public shareholders
are redeemed by us. The forward purchase shares will generally be identical to the Class A ordinary shares included in the units sold
in our initial public offering, except that they will be entitled to certain registration rights, as described herein. The forward purchase
warrants will have the same terms as the private placement warrants so long as they are held by the forward purchase investor or its permitted
assignees and transferees.
We may effectuate our initial business combination
with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able
to effectuate our initial business combination with more than one target business because of various factors, including the existence
of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating
results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial
business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory
developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting
of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different
areas of a single industry. Accordingly, the prospects for our success may be:
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solely dependent upon the performance of a single business, property or asset; or |
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dependent upon the development or market acceptance of a single or limited number of products, processes or services. |
This lack of diversification may subject us to
numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry
in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete
business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and
give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several
businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent
on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete
our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens
and costs with respect to possible multiple negotiations and due diligence (if there are multiple sellers) and the additional risks associated
with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business.
If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial business
combination with a private company about which little information is available, which may result in a business combination with a company
that is not as profitable as we suspected, if at all.
In pursuing our acquisition strategy, we may seek
to effectuate our initial business combination with a privately held company. Very little public information generally exists about private
companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of
limited information, which may result in a business combination with a company that is not as profitable as we suspected, if at all.
Our management may not be able to maintain
control of a target business after our initial business combination. Upon the loss of control of a target business, new management may
not possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination
so that the post-business combination company in which our public shareholders own shares will own less than 100% of the equity interests
or assets of a target business, but we will only complete such business combination if the post-business combination company owns
or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target
business sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider
any transaction that does not meet such criteria. Even if the post-business combination company owns 50% or more of the voting securities
of the target, our shareholders prior to the completion of our initial business combination may collectively own a minority interest in
the post-business combination company, depending on valuations ascribed to the target and us in the business combination. For example,
we could pursue a transaction in which we issue a substantial number of new Class A ordinary shares in exchange for all of the outstanding
capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% interest in the target. However, as
a result of the issuance of a substantial number of new Class A ordinary shares, our shareholders immediately prior to such transaction
could own less than a majority of our outstanding Class A ordinary shares subsequent to such transaction. In addition, other minority
shareholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s
shares than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain control
of the target business.
We may seek business combination opportunities
with a high degree of complexity that require significant operational improvements, which could delay or prevent us from achieving our
desired results.
We may seek business combination opportunities
with large, highly complex companies that we believe would benefit from operational improvements. While we intend to implement such improvements,
to the extent that our efforts are delayed or we are unable to achieve the desired improvements, the business combination may not be as
successful as we anticipate.
To the extent we complete our initial business
combination with a large complex business or entity with a complex operating structure, we may also be affected by numerous risks inherent
in the operations of the business with which we combine, which could delay or prevent us from implementing our strategy. Although our
management team will endeavor to evaluate the risks inherent in a particular target business and its operations, we may not be able to
properly ascertain or assess all of the significant risk factors until we complete our business combination.
If we are not able to achieve our desired operational
improvements, or the improvements take longer to implement than anticipated, we may not achieve the gains that we anticipate. Furthermore,
some of these risks and complexities may be outside of our control and leave us with no ability to control or reduce the chances that
those risks and complexities will adversely impact a target business. Such combination may not be as successful as a combination with
a smaller, less complex organization.
We do not have a specified maximum redemption
threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which
a substantial majority of our shareholders do not agree.
Our amended and restated memorandum and articles
of association does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in
an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s
“penny stock” rules). As a result, we may be able to complete our initial business combination even though a substantial majority
of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder approval of our
initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender
offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or any
of their affiliates. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are
validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination
exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all Class A ordinary
shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial business
combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing instruments,
including their warrant agreements. We may seek to amend our amended and restated memorandum and articles of association or governing
instruments in a manner that will make it easier for us to complete our initial business combination that our shareholders may not support.
In order to effectuate a business combination,
blank check companies have, in the recent past, amended various provisions of their charters and governing instruments, including their
warrant agreements. For example, blank check companies have amended the definition of business combination, increased redemption thresholds,
extended the time to consummate a business combination and, with respect to their warrants, amended their warrant agreements to require
the warrants to be exchanged for cash and/or other securities. Amending our amended and restated memorandum and articles of association
require at least a special resolution of our shareholders as a matter of Cayman Islands law, meaning the approval of holders of at least
two-thirds of our ordinary shares who attend and vote at a general meeting of the company, and amending our warrant agreement will
require a vote of holders of at least 50% of the public warrants and, solely with respect to any amendment to the terms of the private
placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 50% of the number of the
then outstanding private placement warrants and, solely with respect to any amendment to the terms of the forward purchase warrants or
any provision of the warrant agreement with respect to the forward purchase warrants, 50% of the then-outstanding forward purchase
warrants. In addition, our amended and restated memorandum and articles of association require us to provide our public shareholders with
the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum and articles
of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right
to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not
complete our initial business combination within 24 months from the closing of our initial public offering or (B) with respect to
any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination activity.
To the extent any of such amendments would be deemed to fundamentally change the nature of any of the securities offered through our registration
statement, we would register, or seek an exemption from registration for, the affected securities.
The provisions of our amended and restated
memorandum and articles of association that relate to our pre-business combination activity (and corresponding provisions of the agreement
governing the release of funds from our trust account) may be amended with the approval of a special resolution which requires the approval
of the holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company, which is a lower
amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated
memorandum and articles of association to facilitate the completion of an initial business combination that some of our shareholders may
not support.
Some other blank check companies have a provision
in their charter which prohibits the amendment of certain of its provisions, including those which relate to a company’s pre-business combination
activity, without approval by a certain percentage of the company’s shareholders. In those companies, amendment of these provisions
typically requires approval by between 90% and 100% of the company’s shareholders. Our amended and restated memorandum and articles
of association provides that any of its provisions related to pre-business combination activity (including the requirement to deposit
proceeds of our initial public offering and the sale of the private placement warrants into the trust account and not release such amounts
except in specified circumstances, and to provide redemption rights to public shareholders as described herein) may be amended if approved
by special resolution, meaning holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of
the company, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended
if approved by holders of at least 65% of our ordinary shares; provided that the provisions of our amended and restated memorandum and
articles of association governing the appointment or removal of directors prior to our initial business combination may only be amended
by a special resolution passed by holders representing at least two-thirds of our outstanding Class B ordinary shares. Our initial
shareholders, and their permitted transferees, if any, who collectively beneficially own, on an as-converted basis, 20% of our Class
A ordinary shares, will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust
agreement and have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended
and restated memorandum and articles of association which govern our pre-business combination behavior more easily than some other
blank check companies, and this may increase our ability to complete a business combination with which you do not agree. Our shareholders
may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
Our sponsor, executive officers and directors
have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum
and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary
shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares
if we do not complete our initial business combination within 24 months from the closing of our initial public offering or (B) with
respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination
activity; unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any
such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including
interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the
number of the then-outstanding public shares. Our shareholders are not parties to, or third-party beneficiaries of, these agreements
and, as a result, will not have the ability to pursue remedies against our sponsor, executive officers and directors for any breach of
these agreements. As a result, in the event of a breach, our shareholders would need to pursue a shareholder derivative action, subject
to applicable law.
We may be unable to obtain additional financing
to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure
or abandon a particular business combination. If we are unable to complete our initial business combination, our public shareholders may
receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our
warrants will expire worthless.
Although we believe that the net proceeds of our
initial public offering and the sale of the private placement warrants will be sufficient to allow us to complete our initial business
combination, because we have not yet selected any prospective target business we cannot ascertain the capital requirements for any particular
transaction. If the net proceeds of our initial public offering and the sale of the private placement warrants prove to be insufficient,
either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business,
the obligation to redeem for cash a significant number of shares from shareholders who elect redemption in connection with our initial
business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we
may be required to seek additional financing or to abandon the proposed business combination. Such financing may not be available on acceptable
terms, if at all. The current economic environment may make difficult for companies to obtain acquisition financing. To the extent that
additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either
restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. If we do
not complete our initial business combination within the required time period, our public shareholders may receive only approximately
$10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to
fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect
on the continued development or growth of the target business. None of our officers, directors or shareholders is required to provide
any financing to us in connection with or after our initial business combination.
Our initial shareholders control a substantial
interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do
not support.
Our initial shareholders own, on an as-converted basis,
20% of our issued and outstanding ordinary shares. Accordingly, they may exert a substantial influence on actions requiring a shareholder
vote, potentially in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association.
If our initial shareholders purchase any additional Class A ordinary shares in the aftermarket or in privately negotiated transactions,
this would increase their control. Neither our sponsor nor, to our knowledge, any of our officers or directors, have any current intention
to purchase additional securities, other than as disclosed in this Report. Factors that would be considered in making such additional
purchases would include consideration of the current trading price of our Class A ordinary shares. In addition, our board of directors,
whose members were elected by our sponsor, is and will be divided into three classes, each of which will generally serve for a term of
three years with only one class of directors being elected in each year. We may not hold an annual general meeting to elect new directors
prior to the completion of our initial business combination, in which case all of the current directors will continue in office until
at least the completion of the business combination. If there is an annual general meeting, as a consequence of our “staggered”
board of directors, only a minority of the board of directors will be considered for appointment and our sponsor, because of its ownership
position, will control the outcome, as only holders of our Class B ordinary shares have the right to vote on the appointment of directors
and to remove directors prior to our initial business combination. Accordingly, our sponsor will continue to exert control at least until
the completion of our initial business combination. In addition, we have agreed not to enter into a definitive agreement regarding an
initial business combination without the prior consent of our sponsor.
We may amend the terms of the warrants in
a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then outstanding public
warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of
our Class A ordinary shares purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants are issued in registered form under
a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides
that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision,
but requires the approval by the holders of at least 50% of the then-outstanding public warrants to make any change that adversely
affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner
adverse to a holder if holders of at least 50% of the then-outstanding public warrants approve of such amendment and, solely with
respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the
private placement warrants, 50% of the number of the then outstanding private placement warrants. Although our ability to amend the terms
of the public warrants with the consent of at least 50% of the then-outstanding public warrants is unlimited, examples of such amendments
could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise
period or decrease the number of Class A ordinary shares purchasable upon exercise of a warrant.
Our warrant agreement designates the courts
of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for
certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders
to obtain a favorable judicial forum for disputes with our company.
Our warrant agreement provides that, subject to
applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including
under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for
the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive
forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent
an inconvenient forum.
Notwithstanding the foregoing, these provisions
of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim
for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing
or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions
in our warrant agreement. If any action, the subject matter of which is within the scope the forum provisions of the warrant agreement,
is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York
(a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the
personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such
court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant
holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant
holder.
This choice-of-forum provision may limit
a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may
discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable
with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving
such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations
and result in a diversion of the time and resources of our management and board of directors.
We may redeem your unexpired warrants prior
to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem outstanding warrants
at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price
of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations,
recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper
notice of such redemption and provided that certain other conditions are met. If and when the warrants become redeemable by us, we may
exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state
securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise the warrants.
Redemption of the outstanding warrants could force you to (i) exercise your warrants and pay the exercise price therefor at a time when
it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish
to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption,
is likely to be substantially less than the market value of your warrants.
In addition, we may redeem your warrants at any
time after they become exercisable and prior to their expiration at a price of $0.10 per warrant upon a minimum of 30 days’ prior
written notice of redemption provided that holders will be able to exercise their warrants prior to redemption for a number of Class A
ordinary shares determined based on the redemption date and the fair market value of our Class A ordinary shares. The value received upon
exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later
time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including because
the number of ordinary shares received is capped at 0.361 Class A ordinary shares per warrant (subject to adjustment) irrespective of
the remaining life of the warrants. None of the private placement warrants or the forward purchase warrants are redeemable by us (except
as described herein) so long as they are held by our sponsor or the forward purchase investor, as applicable, or their respective permitted
transferees.
Our warrants may have an adverse effect
on the market price of our Class A ordinary shares and make it more difficult to effectuate our initial business combination.
We issued public warrants to purchase 4,000,000
of our Class A ordinary shares as part of the units offered by our initial public offering and, simultaneously with the closing of our
initial public offering, we issued in a private placement 4,333,333 private placement warrants at a price of $1.50 per warrant. We may
also issue up to 1,000,000 forward purchase warrants pursuant to the forward purchase agreement. In addition, if the sponsor makes any
working capital loans, it may convert up to $1,500,000 of such loans into up to an additional 1,000,000 private placement warrants, at
the price of $1.50 per warrant. Our public warrants are also redeemable by us for Class A ordinary shares. To the extent we issue ordinary
shares to effectuate a business transaction, the potential for the issuance of a substantial number of additional Class A ordinary shares
upon exercise of these warrants could make us a less attractive acquisition vehicle to a target business. Such warrants, when exercised,
will increase the number of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares issued
to complete the business transaction. Therefore, our warrants may make it more difficult to effectuate a business transaction or increase
the cost of acquiring the target business.
Because each unit contains one-fifth of
one warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
Each unit contains one-fifth of one warrant.
Pursuant to the warrant agreement, no fractional warrants were issued upon separation of the units, and only whole units trade. If, upon
exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to
the nearest whole number the number of Class A ordinary shares to be issued to the warrant holder. This is different from other offerings
similar to ours whose units include one ordinary share and one warrant to purchase one whole share. We have established the components
of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants
will be exercisable in the aggregate for one-fifth of the number of shares compared to units that each contain a whole warrant to
purchase one share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure
may cause our units to be worth less than if it included a warrant to purchase one whole share.
A provision of our warrant agreement may
make it more difficult for us to consummate an initial business combination.
Unlike most blank check companies, if (i) we issue
additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our
initial business combination (other than the forward purchase securities) at a Newly Issued Price of less than $9.20 per ordinary share,
(ii) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available
for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions),
and (iii) the Market Value is below $9.20 per share, then the exercise price of the warrants will be adjusted to be equal to 115% of the
higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger prices will be adjusted (to the nearest
cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price
will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price. This may make it more
difficult for us to consummate an initial business combination with a target business.
Because we must furnish our shareholders
with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination
with some prospective target businesses.
The federal proxy rules require that a proxy statement
with respect to a vote on our proposed business combination include historical and/or pro forma financial statement disclosure. We will
include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under
the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting
principles generally accepted in the United States of America, or GAAP, or international financial reporting standards as issued by the
International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required
to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial
statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide
such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination
within 24 months from the closing of our initial public offering.
We are an emerging growth company and a
smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements
available to “emerging growth companies” or “smaller reporting companies,” this could make our securities less
attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company”
within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited
to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure
obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding
a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
As a result, our shareholders may not have access to certain information they may deem important. We could be an emerging growth company
for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A
ordinary shares held by non-affiliates equals or exceeds $700,000,000 as of any June 30 before that time, in which case we would
no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities
less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance
on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading
market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies
but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that
when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth
company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison
of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which
has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards
used.
Additionally, we are a “smaller reporting
company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure
obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting
company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates equals
or exceeds $250,000,000 as of the prior June 30, and (2) our annual revenues exceeded $100,000,000 during such completed fiscal year
and the market value of our ordinary shares held by non-affiliates equals or exceeds $700,000,000 as of the prior June 30. To the
extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public
companies difficult or impossible.
Compliance obligations under the Sarbanes-Oxley
Act may make it more difficult for us to effectuate a business combination, require substantial financial and management resources, and
increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act requires
that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending
December 31, 2022. Only in the event we are deemed to be a large accelerated filer or an accelerated filer and no longer qualify
as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement
on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of
the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business with which we
seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding
adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act
may increase the time and costs necessary to complete any such acquisition.
Because we are incorporated under the laws
of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S.
federal courts may be limited.
We are an exempted company incorporated under
the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon
our directors or executive officers, or enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs and the rights of shareholders
are governed by our amended and restated memorandum and articles of association, the Companies Act (as the same may be supplemented or
amended from time to time) and the common law of the Cayman Islands. We will also be subject to the federal securities laws of the United
States. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities
of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law
of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common
law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our
shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under
statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities
laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted
bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a
Federal court of the United States.
Shareholders of Cayman Islands exempted companies
like the company have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of the register of members
of these companies. Our directors have discretion under our amended and restated memorandum and articles of association to determine whether
or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available
to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder
motion or to solicit proxies from other shareholders in connection with a proxy contest.
We have been advised by Maples and Calder (Cayman)
LLP, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments
of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any
state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability
provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are
penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the
United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction
without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an
obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced
in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine
or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained
in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards
of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings
if concurrent proceedings are being brought elsewhere.
As a result of all of the above, public shareholders
may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or
controlling shareholders than they would as public shareholders of a United States company.
Provisions in our amended and restated memorandum
and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future
for our Class A ordinary shares and could entrench management.
Our amended and restated memorandum and articles
of association contains provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best
interests. These provisions will include a staggered board of directors, the ability of the board of directors to designate the terms
of and issue new series of preference shares, and the fact that prior to the completion of our initial business combination only holders
of our Class B ordinary shares, which have been issued to our sponsor, are entitled to vote on the appointment of directors, which may
make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing
market prices for our securities.
Cyber incidents or attacks directed at us
could result in information theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies, including information
systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and
deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the
cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early
stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences.
We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents.
It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial
loss.
Since only holders of our founder shares
have the right to vote on the appointment of directors, Nasdaq may consider us to be a “controlled company” within the meaning
of Nasdaq rules and, as a result, we may qualify for exemptions from certain corporate governance requirements.
Only holders of our founder shares have the right
to vote on the appointment of directors. As a result, Nasdaq may consider us to be a “controlled company” within the meaning
of the Nasdaq corporate governance standards. Under the Nasdaq corporate governance standards, a company of which more than 50% of the
voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with
certain corporate governance requirements, including the requirements that:
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we have a board that includes a majority of “independent directors,” as defined under the rules of Nasdaq; |
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we have a compensation committee of our board with a written charter addressing the committee’s purpose and responsibilities; and |
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we have a nominating and corporate governance committee of our board with a written charter addressing the committee’s purpose and responsibilities. |
We do not intend to utilize these exemptions and
intend to comply with the corporate governance requirements of Nasdaq, subject to applicable phase-in rules. However, if we determine
in the future to utilize some or all of these exemptions, you will not have the same protections afforded to shareholders of companies
that are subject to all of Nasdaq corporate governance requirements.
Risks Associated with Acquiring and Operating
a Business in Foreign Countries
If we pursue a target company with operations
or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with
investigating, agreeing to and completing such initial business combination, and if we effect such initial business combination, we would
be subject to a variety of additional risks that may negatively impact our operations.
If we pursue a target a company with operations
or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border business
combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting due
diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies and changes in
the purchase price based on fluctuations in foreign exchange rates
If we effect our initial business combination
with such a company, we would be subject to any special considerations or risks associated with companies operating in an international
setting, including any of the following:
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costs and difficulties inherent in managing cross-border business operations; |
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rules and regulations regarding currency redemption; |
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complex corporate withholding taxes on individuals; |
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laws governing the manner in which future business combinations may be effected; |
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exchange listing and/or delisting requirements; |
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tariffs and trade barriers; |
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regulations related to customs and import/export matters; |
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local or regional economic policies and market conditions; |
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unexpected changes in regulatory requirements; |
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tax issues, such as tax law changes and variations in tax laws as compared to the United States; |
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currency fluctuations and exchange controls; |
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challenges in collecting accounts receivable; |
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cultural and language differences; |
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employment regulations; |
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underdeveloped or unpredictable legal or regulatory systems; |
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protection of intellectual property; |
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social unrest, crime, strikes, riots and civil disturbances; |
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regime changes and political upheaval; |
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terrorist attacks, natural disasters and wars; and |
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deterioration of political relations with the United States. |
We may not be able to adequately address these
additional risks. If we were unable to do so, we may be unable to complete such initial business combination, or, if we complete such
combination, our operations might suffer, either of which may adversely impact our business, financial condition and results of operations.
If our management following our initial
business combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with
such laws, which could lead to various regulatory issues.
Following our initial business combination, our
management may resign from their positions as officers or directors of the company and the management of the target business at the time
of the business combination will remain in place. Management of the target business may not be familiar with United States securities
laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar
with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect
our operations.
After our initial business combination,
substantially all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations
in such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political
and social conditions and government policies, developments and conditions in the country in which we operate.
The economic, political and social conditions,
as well as government policies, of the country in which our operations are located could affect our business. Economic growth could be
uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future. If in the future
such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in
certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find
an attractive target business with which to consummate our initial business combination and if we effect our initial business combination,
the ability of that target business to become profitable.
Exchange rate fluctuations and currency
policies may cause a target business’ ability to succeed in the international markets to be diminished.
In the event we acquire a non-U.S. target, all
revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and distributions, if
any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions fluctuate
and are affected by, among other things, changes in political and economic conditions. Any change in the relative value of such currency
against our reporting currency may affect the attractiveness of any target business or, following consummation of our initial business
combination, our financial condition and results of operations. Additionally, if a currency appreciates in value against the dollar prior
to the consummation of our initial business combination, the cost of a target business as measured in dollars will increase, which may
make it less likely that we are able to consummate such transaction.
We may reincorporate in another jurisdiction
in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements
and we may not be able to enforce our legal rights.
In connection with our initial business combination,
we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine to do this, the
laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement of existing
laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability to enforce
or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital.
We are subject to changing law and regulations
regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.
We are subject to rules and regulations by various
governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose
securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing
laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion
of management time and attention from seeking a business combination target.
Moreover, because these laws, regulations and
standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available.
This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions
to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may
be subject to penalty and our business may be harmed.