Unless otherwise stated
in this Annual Report on Form 10-K or unless the context otherwise requires, references to:
Some statements contained
in this Annual Report on Form 10-K (this “Annual Report”) are forward-looking in nature. Our forward-looking statements
include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions
or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations
of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “intends,”
“may,” “might,” “plan,” “possible,” “potential,” “predict,”
“project,” “should,” “would” and similar expressions may identify forward-looking statements,
but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Annual
Report may include, for example, statements about:
The forward-looking
statements contained in this Annual Report are based on our current expectations and beliefs concerning future developments and
their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated.
These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions
that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking
statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk
Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect,
actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation
to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except
as may be required under applicable securities laws.
ITEM
1. BUSINESS
General
We
are a blank check company incorporated on June 12, 2020 as a Delaware corporation and formed for the purpose of effecting
a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or
more businesses.
In June 2020, we issued
14,375,000 founder shares to our sponsor for an aggregate purchase price of $25,000, or approximately $0.002 per share. In July
2020, our sponsor transferred to our independent directors an aggregate of 75,000 founder shares at the same price originally paid
for such shares.
The registration statement
on Form S-1 (File No. 333-239572) for our initial public offering were declared effective by the Securities and Exchange Commission
(the “SEC”) on August 4, 2020. On August 7, 2020, we consummated our initial public offering of 50,000,000 units, and
on September 21, 2020 we sold an additional 7,500,000 units as a result of the underwriters’ full exercise of their over-allotment
option, with each unit consisting of one share of Class A common stock and one-third of one redeemable warrant. Each whole warrant
entitles the holder thereof to purchase one share of Class A common stock at an exercise price of $11.50 per share. The units in
our initial public offering were sold at an offering price of $10.00 per unit, generating total gross proceeds of $575,000,000.
Simultaneously with
the consummation of our initial public offering and the full over-allotment option, we consummated the private placement of an
aggregate of 9,000,000 private placement warrants to our sponsor at a price of $1.50 per private placement warrant, generating
total gross proceeds of $13,500,000 (the “private placement”).
A total of $575,000,000
(or $10.00 per unit sold in our initial public offering) of the net proceeds from our initial public offering and the private placement
was placed in a trust account established for the benefit of our public stockholders (the “trust account”), with Continental
Stock Transfer & Trust Company acting as trustee, and has been invested only in U.S. “government securities”
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (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, until the earlier of: (i) the
completion of our initial business combination within the required time period and (ii) the distribution of the trust account,
as described below, except that interest earned on the trust account can be released to pay our taxes payable and for dissolution
expenses up to $100,000, as applicable.
We paid a total of
$11,500,000 in underwriting discounts and approximately $623,000 for other offering costs and expenses related to our initial public
offering. In addition, the underwriters agreed to defer $20,125,000 in underwriting discounts and commissions.
As of December 31,
2020, we had approximately $1.3 million outside of the trust account, approximately $0.3 million of investment income available
in the trust account to pay for tax obligations (less up to $100,000 of interest to pay dissolution expenses), and a working capital
surplus of approximately $1.1 million.
Our units began trading
on August 5, 2020 on the New York Stock Exchange (the “NYSE”) under the symbol “GOAC.U.” Commencing on
September 25, 2020, the shares of Class A common stock and warrants comprising the units began separate trading on the NYSE under
the symbols “GOAC” and “GOAC WS,” respectively. Those units not separated continue to trade on the NYSE
under the symbol “GOAC.U.”
We
intend to focus our efforts on identifying a prospective target business with either all or a substantial portion of its activities
in North America or Europe. We expect to focus on travel-related and travel-adjacent businesses that have attractive
growth-oriented characteristics and strong underlying demand drivers which include business services and travel infrastructure
platforms such as visa processing, settlement systems and payment platforms. We expect that these target investments will have
characteristics appropriate for public companies and, accordingly, or due to other characteristics, will not be suitable for private
equity-style investments. As we focus our efforts on identifying a prospective target company or business, we will seek to
capitalize on the multiple decades of combined investment experience and vast relationship networks of our founders, Noam Gottesman
and M. Gregory O’Hara. However, we do not intend to target investments that are competitive with Nomad Foods Limited (“Nomad
Foods”), Radius Global Infrastructure, Inc. (“Radius”) or any portfolio companies, investments or investment
mandates of Certares Management LLC and its affiliated funds (“Certares”). Notwithstanding the foregoing, our efforts
on identifying a prospective target company or business will not be limited to a particular industry or geographic region.
It
has been noted that total global travel spending has increased substantially, from $3.7 trillion in 2009 to $5.7 trillion in 2018,
becoming one of the largest and fastest growing economic sectors in the world. In 2018, travel and tourism represented 10.4% of
worldwide gross domestic product and was expected to continue growing. We believe that the COVID-19 pandemic has created temporary
dislocation in the travel-related and travel-adjacent sectors and specifically has adversely affected the ability of
companies and business divisions in these sectors to access public markets through traditional initial public offerings or spin-offs.
We believe there are many potential targets within the space that are both attractive acquisition opportunities and positioned
to deliver substantial value to stockholders in the public markets.
Mr. Gottesman
has spent his career building, operating and investing in businesses both in the private and public markets. Mr. Gottesman’s
varied experience includes co-founding GLG Partners Inc. and its predecessor entities (“GLG”), a leading multi-strategy asset
management platform, and, in 2012, founding TOMS Capital LLC, a New York-based actively-managed single-family office
with diverse investments across consumer, retail, hospitality, real estate, technology and financial services (“TOMS Capital”).
Furthermore, Mr. Gottesman has co-founded two previous acquisition vehicles, Nomad Holdings Limited (“Nomad”)
and Landscape Acquisition Holdings Limited (“Landscape”), and in January 2021 Mr. Gottesman co-founded an additional
acquisition vehicle, N2 Acquisition Holdings Corp (“N2”).
Mr. O’Hara
has deep experience investing institutional capital across a variety of asset classes. Mr. O’Hara is the founder and
President of Clementine Investments LLC (“Clementine Investments”), the investment arm of Mr. O’Hara’s
family office which has diverse investments in hotels, hospitality, restaurants, consumer goods, media and entertainment and real
estate and is the founder and Senior Managing Director of Certares, a multi-billion dollar private equity firm specializing
in direct private investment in the travel and hospitality sectors.
We
are confident that the combined experience of our management team makes us well situated to identify, source, negotiate and execute
an initial business combination with an attractive company or business in the travel-related and travel-adjacent sectors.
Investment opportunities will be sourced from our founders’ operating network of executives, investors and advisors, which
include opportunities in the form of private equity investments, family owned businesses or divisions of larger corporations. Our
founders will employ a disciplined and highly selective investment process and expect to add value to a target company through
add-on acquisitions, capital structure optimization and operational improvements.
Mr. Gottesman
co-founded GLG as a division of Lehman Brothers International (Europe) in 1995 where he was a Managing Director. Under Mr. Gottesman’s
leadership, GLG managed approximately $31 billion in assets at its peak. At GLG, Mr. Gottesman served in various chief executive
capacities until January 2012, including as chief executive officer from September 2005 until January 2012. Mr. Gottesman
was also chairman of the board of GLG following its merger with Freedom Acquisition Holdings Inc. and prior to its acquisition
by Man Group plc.
In
April 2014, Mr. Gottesman co-founded Nomad, an acquisition vehicle which completed its $500 million initial public
offering and listing on the London Stock Exchange. In June 2015, Nomad acquired Iglo Foods Holdings Limited, a leading frozen food
company in Europe whose brands at that time included Birds Eye in the U.K. and Ireland, Findus in Italy and Iglo in Germany and
continental Europe, for approximately €2.6 billion which was funded in part by a private placement of approximately $795 million.
Upon closing of the acquisition, the combined company subsequently changed its name to Nomad Foods Limited. Nomad Foods relisted
on the New York Stock Exchange in 2016 and is currently Europe’s largest frozen foods business. Subsequent to the initial
transaction, Nomad Foods has acquired Findus Sverige AB, Green Isle Foods Ltd., Aunt Bessie’s Limited and Findus Switzerland
for aggregate consideration of approximately $1.4 billion. Mr. Gottesman continues to serve as co-chairman of Nomad
Foods’ board of directors.
In
November 2017, Mr. Gottesman co-founded Landscape, an acquisition vehicle which completed its $500 million initial
public offering and listing on the London Stock Exchange. In February 2020, Landscape acquired AP WIP Investments Holdings LP (“AP
Wireless”), a U.S.-based owner of wireless communications property sites across 19 countries for approximately $860 million
which was funded in part by a private placement of $100 million by Centerbridge Partners LP. Post-closing, the company was
re-named Digital Landscape Group Inc. and subsequently re-named Radius Global Infrastructure, Inc. (NASDAQ: RADI).
In
January 2021, Mr. Gottesman co-founded N2, a blank check company formed for substantially similar purposes as our company but without
a travel-related and travel-adjacent business focus. N2 has not yet completed its initial public offering. Mr. Gottesman,
who serves as our Co-Chief Executive Officer and one of our directors, also serves as Co-Chairman of N2. In addition,
certain of our officers are also officers of N2.
Prior
to founding Clementine Investments and Certares, Mr. O’Hara served as the Chief Investment Officer of J.P. Morgan Chase’s
Special Investment Group (“JPM SIG”). Prior to JPM SIG, Mr. O’Hara was a Managing Director of One Equity
Partners (“OEP”), the private equity arm of JP Morgan. Prior to joining OEP in 2005, Mr. O’Hara served as
Executive Vice President of Worldspan. Mr. O’Hara has deep investment and operational expertise in the travel sector,
having invested billions of equity capital in the space and realizing significant returns. Mr. O’Hara brings operational
expertise resulting from his experience and continued focus on the travel services, tourism, hospitality, travel-related business
and consumer services sectors. Mr. O’Hara is the Executive Chairman of American Express Global Business Travel (“Amex
GBT”) and Vice Chairman of Liberty TripAdvisor Holdings, Inc. and serves on the Boards of Directors of Tripadvisor, Inc.,
The Innocence Project, Mystic Invest and World Travel & Tourism Council.
Mr. O’Hara
and his team at Clementine Investments have a specialty of sourcing unique joint venture, spin-out and partnership opportunities
at attractive valuations. In 2003, Mr. O’Hara led a syndicate of institutional investors in acquiring Worldspan from
a group of airlines. In 2014, Mr. O’Hara, through a Certares affiliate, led a partnership spin-out of American
Express’s corporate travel management business, Amex GBT, with American Express retaining 50% ownership of Amex GBT and the
other 50% being owned by a Certares special purpose vehicle backed by leading sovereign wealth, institutional, pension and endowment
investors.
We
believe that our management team is well positioned to identify attractive business combination opportunities with a compelling
industry backdrop and an opportunity for transformational growth. Our objectives are to generate attractive returns for our stockholders
and enhance value through improving operational performance of the acquired company. We expect to favor potential target companies
with certain industry and business characteristics. Key industry characteristics include compelling long-term growth prospects,
attractive competitive dynamics, consolidation opportunities and low risk of technological obsolescence. Key business characteristics
include high barriers to entry, significant streams of recurring revenue, opportunity for operational improvement, attractive steady-state margins,
high incremental margins and attractive free cash flow characteristics.
With
respect to the above, past experience or performance of our management team and their respective affiliates is not a guarantee
of either (i) our ability to successfully identify and execute a transaction or (ii) success with respect to any business combination
that we may consummate. You should not rely on the historical record of our management team or their respective affiliates as indicative
of future performance. Our management team and their respective affiliates have been involved with a large number of public and
private companies in addition to those identified above, not all of which have achieved similar performance levels. See “Risk
Factors — Past performance by our management team or their respective affiliates (including our founders) may not be indicative
of future performance of an investment in us or in the future performance of any business that we may acquire.”
Business Strategy
Our
business strategy is to identify and complete our initial business combination with a company that complements the experience of
our founders and can benefit from their operational and investment expertise. Our selection process will leverage Mr. Gottesman’s
and Mr. O’Hara’s broad and deep relationship network, unique industry experiences and deal-sourcing capabilities
to access a broad spectrum of differentiated opportunities. This network has been developed through our founders’ demonstrated
success both investing in and operating businesses across a variety of industries, developing a distinctive combination of capabilities
including:
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a track record of creating and growing multi-billion dollar platforms in the public markets;
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extensive M&A experience, including driving transformational transactions;
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the ability to enhance and advise management teams as they transition from private to public markets;
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experience driving capital allocation decisions at the corporate level;
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understanding of public market performance and requirements;
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history of sourcing, structuring, acquiring, operating, developing, growing, financing and selling
businesses;
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deep relationships with sellers, financing providers and target management teams; and
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an extensive history of accessing the capital markets across various business cycles, including
financing businesses and assisting companies with transition to public ownership.
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Acquisition Criteria
Consistent
with our business strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating
prospective target businesses. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide
to enter into our initial business combination with a target business that does not meet these criteria and guidelines. We intend
to acquire one or more businesses that we believe:
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have a strong competitive industry position, with demonstrated competitive advantages to maintain
barriers to entry;
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have strong free cash flow characteristics with a desirable return on capital;
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have a strong, experienced management team which would benefit from our founders’ network
or expertise, such as additional management expertise, capital structure optimization, acquisition advice or operational changes
to drive improved financial performance;
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are fundamentally sound companies with a proven track record;
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will offer an attractive risk-adjusted return for our stockholders; and
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can benefit from being a publicly traded company, are prepared to be a publicly traded company
and can utilize access to broader capital markets.
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These
criteria and guidelines are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business
combination may be based, to the extent relevant, on these general criteria and guidelines as well as other considerations, factors,
criteria and guidelines that our management may deem relevant. In the event that we decide to enter into our initial business combination
with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not
meet the above criteria and guidelines in our stockholder communications related to our initial business combination, which, as
discussed in this prospectus, would be in the form of tender offer documents or proxy solicitation materials that we would file
with the SEC.
In
addition to any potential business candidates we may identify on our own, we anticipate that other target business candidates will
be brought to our attention from various unaffiliated sources, including investment market participants, private equity funds and
large business enterprises seeking to divest non-core assets or divisions.
Our Acquisition
Process
In
evaluating a prospective target business, we expect to conduct an extensive due diligence review which may encompass, as applicable
and among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers,
inspection of facilities and a review of financial, operational, legal and other information about the target and its industry.
We will also utilize our management team’s operational and capital planning experience.
Each
of our directors and officers, directly or indirectly, owns founder shares and/or private placement warrants and, accordingly,
may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate
our initial business combination. Further, such directors and officers may have a conflict of interest with respect to evaluating
a particular business combination if the retention or resignation of any such directors and officers was included by a target business
as a condition to any agreement with respect to our initial business combination.
Certain
of our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations
to other entities, including N2, 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. As a result, 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, then, subject to such officer’s and director’s fiduciary duties, he or she will need to honor such fiduciary
or contractual obligations to present such business combination opportunity to such entity, before we can pursue such opportunity.
If these other entities decide to pursue any such opportunity, we may be precluded from pursuing the same. However, we do not expect
these duties or obligations to materially affect our ability to identify and pursue business combination opportunities or complete
our initial business combination. Our amended and restated certificate of incorporation provides that we renounce our interest
in any business combination opportunity offered to any director or officer unless such opportunity is expressly offered to such
person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to complete
on a reasonable basis.
In
addition, our founders, officers and directors, are not required to commit any specified amount of time to our affairs, and, accordingly,
have conflicts of interest in allocating management time among various business activities, including identifying potential business
combinations and monitoring the related due diligence. See “Risk Factors — 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.”
Initial Business Combination
In
accordance with the rules of the NYSE, our initial business combination must occur with one or more target businesses that together
have an aggregate fair market value of at least 80% of the net assets held in the trust account (excluding the deferred underwriting
discounts held in trust) at the time of signing a definitive agreement in connection with our initial business combination. We
refer to this as the 80% of net assets test. The fair market value of the target or targets will be determined by our board of
directors based upon one or more standards generally accepted by the financial community (such as actual and potential sales, earnings,
cash flow and/or book value). Even though our board of directors will rely on generally accepted standards, our board of directors
will have discretion to select the standards employed. In addition, the application of the standards generally involves a substantial
degree of judgment. Accordingly, investors will be relying on the business judgment of the board of directors in evaluating the
fair market value of the target or targets. The proxy solicitation materials or tender offer documents used by us in connection
with any proposed transaction will provide public stockholders with our analysis of our satisfaction of the 80% of net assets test,
as well as the basis for our determinations. If our board of directors is not able independently to determine the fair market value
of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of
the Financial Industry Regulatory Authority, Inc., or FINRA, or an independent valuation or appraisal firm with respect to the
satisfaction of such criteria. While we consider it unlikely that our board will not be able to make an independent determination
of the fair market value of a target business or businesses, it may be unable to do so if the board is less familiar or experienced
with the target company’s business, there is a significant amount of uncertainty as to the value of the target company’s
assets or prospects, including if such company is at an early stage of development, operations or growth, or if the anticipated
transaction involves a complex financial analysis or other specialized skills and the board determines that outside expertise would
be helpful or necessary in conducting such analysis. Since any opinion, if obtained, would merely state that the fair market value
of the target business meets the 80% of net assets test, unless such opinion includes material information regarding the valuation
of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed
to our stockholders. However, if required under applicable law, any proxy statement that we deliver to stockholders and file with
the SEC in connection with a proposed transaction will include such opinion.
We
anticipate structuring our initial business combination so that the post-business combination company in which our public
stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may,
however, structure our initial business combination such that the post-business combination company owns or acquires less
than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team
or stockholders or for other reasons, 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 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-business combination company owns or acquires 50% or more of the
voting securities of the target, our stockholders prior to the 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 shares in exchange for all of the outstanding
capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the
issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own
less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity
interests or assets of a target business or businesses are owned or acquired by the post-business combination company, the
portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test.
If the 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 and we will treat the target businesses together as the initial business combination for purposes
of a tender offer or for seeking stockholder approval, as applicable. We do not currently intend to purchase multiple businesses
in unrelated industries in conjunction with our initial business combination. Subject to foregoing, our management will have virtually
unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted
to effectuate our initial business combination with another blank check company or a similar company with nominal operations.
To
the extent we effect our initial business combination with a company or business that may be financially unstable or in its early
stages of development or growth, we may be affected by numerous risks inherent in such company or business. Although our management
will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain
or assess all significant risk factors.
The
time required to select and evaluate a target business and to structure and complete our initial business combination, and the
costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect
to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately
completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Other Considerations
We
are not prohibited from pursuing an initial business combination 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 that is a member of FINRA or an independent accounting firm that such initial business
combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
Our
founders and our directors and officers may sponsor, form or participate in other blank check companies similar to ours during
the period in which we are seeking an initial business combination. Any such companies, including N2, may present additional conflicts
of interest in pursuing an acquisition target, particularly in the event there is overlap among investment mandates. However, we
do not currently expect that any such other blank check company, including N2, would materially affect our ability to identify
and pursue business combination opportunities or complete our initial business combination.
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 and operating businesses seeking strategic acquisitions. Many of these entities are well established and
have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these
competitors possess greater financial, technical, human and other resources than us. Our ability to acquire larger target businesses
will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition
of a target business. Furthermore, our obligation to pay cash in connection with our public stockholders who 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. Either of these factors may place
us at a competitive disadvantage in successfully negotiating an initial business combination.
Employees
We currently have five
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.
Our Website
Our
corporate website address is https://www.goacquisition.com/. The information contained on, or accessible through our corporate
website or any other website that we may maintain is not incorporated by reference into this Annual Report.
Periodic Reporting and Financial Information
We have registered
our units, Class A common stock and warrants under the Exchange Act and have reporting obligations, including the requirement that
we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual
reports will contain financial statements audited and reported on by our independent registered public accountants.
We will provide stockholders
with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation
materials sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will
need to be prepared in accordance with GAAP and the historical financial statements may be required to be audited in accordance
with PCAOB standards. We cannot assure you that any particular target business selected by us as a potential acquisition candidate
will have financial statements prepared in accordance with GAAP and PCAOB standards or that the potential target business will
be able to prepare its financial statements in accordance with GAAP and PCAOB standards. To the extent that this requirement cannot
be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential business combination
candidates, we do not believe that this limitation will be material.
We will be required
to evaluate our internal control procedures for the fiscal year ending December 31, 2021 as required by the Sarbanes-Oxley Act.
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 requirements on our internal
control over financial reporting. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding
adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the
Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
We are an “emerging
growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified
by the Jumpstart Our Business Startups Act of 2012 (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 stockholder approval of any golden parachute payments not previously approved. 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 shares of Class A common stock that are 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.
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 common stock
held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues
exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds
$700 million as of the end of that year’s second fiscal quarter.
ITEM 1A. RISK FACTORS
Summary of
Risk Factors
An
investment in our securities involves a high degree of risk. The occurrence of one or more of the events or circumstances described
in this section, alone or in combination with other events or circumstances, may materially adversely affect our business, financial
condition and operating results. In that event, the trading price of our securities could decline, and you could lose all or part
of your investment. Such risks include, but are not limited to:
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We are a newly formed company with no operating history and no revenues, and you have no basis
on which to evaluate our ability to achieve our business objective.
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Past performance by our management team, our strategic advisory group and their respective affiliates
may not be indicative of future performance of an investment in us.
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Our public stockholders may not be afforded an opportunity to vote on our proposed business combination,
which means we may complete our initial business combination even though a majority of our public stockholders do not support such
a combination.
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Your only opportunity to affect the investment decision regarding a potential business combination
will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek stockholder approval of the
business combination.
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If we seek stockholder approval of our initial business combination, our initial stockholders and
members of our management team have agreed to vote their shares in favor of such initial business combination, regardless of how
our public stockholders vote.
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The ability of our public stockholders to redeem their shares for cash may make our financial condition
unattractive to potential target businesses, which may make it difficult for us to enter into a business combination with a target.
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The ability of our public stockholders to exercise redemption rights with respect to a large number
of our shares may not allow us to complete the most desirable business combination, if at all, or optimize our capital structure.
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The requirement that we complete our initial business combination within the prescribed time frame
may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which
to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which
could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.
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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.
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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) pandemic and other events, and the status
of debt and equity markets.
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If we seek stockholder approval of our initial business combination, our initial stockholders,
directors, officers, advisors or their affiliates may enter into certain transactions, including purchasing shares or warrants
from the public, which may influence the outcome of a proposed business combination and reduce the public “float” of
our securities.
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If a stockholder fails to receive notice of our offer to redeem our public shares in connection
with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be
redeemed.
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You will not have any rights or interests in funds from the trust account, except under certain
limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares or warrants, potentially
at a loss.
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The NYSE 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.
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You will not be entitled to protections normally afforded to investors of many other blank check
companies.
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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 are unable to complete our initial business
combination, our public stockholders may receive only approximately $10.00 per share on our redemption of our public shares, or
less than such amount in certain circumstances, and our warrants will expire worthless.
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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 at least 24 months from 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.
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The warrants may become exercisable and redeemable for a security other than the shares of our
Class A common stock, and you will not have any information regarding such other security at this time.
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Unlike some other similarly structured blank check companies, our initial stockholders will receive
additional shares of our Class A common stock if we issue shares to complete an initial business combination.
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Our officers and directors presently have, and any of them in the future may have additional, fiduciary
or contractual obligations to other entities, including N2 and/or one or more other blank check companies, and, accordingly, may
have conflicts of interest in allocating their time and determining to which entity a particular business opportunity should be
presented.
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Provisions in our certificate of incorporation and Delaware law may inhibit a takeover of us, which
could limit the price investors might be willing to pay in the future for our Class A common stock and could entrench management.
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Risks Relating
to Our Search for, Consummation of, or Inability to Consummate, a Business Combination and Post-Business Combination Risks
We are a recently incorporated company
with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a recently incorporated
company incorporated under the laws of the State of Delaware with no operating results, and we will not commence operations until
obtaining funding through this offering. 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. If we do not
complete our initial business combination, we will never generate any operating revenues.
Our public stockholders 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 public stockholders do not support such a combination.
We may choose not to
hold a stockholder vote before we complete our initial business combination if the business combination would not require stockholder
approval under applicable law or stock exchange listing requirement. For instance, if we were seeking to acquire a target business
where the consideration we were paying in the transaction was all cash, we would not be required to seek stockholder approval to
complete such a transaction. Except as required by law or stock exchange, the decision as to whether we will seek stockholder approval
of a proposed business combination or will allow stockholders 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 stockholder approval. Accordingly, we may complete our initial business combination
even if a majority of our public stockholders do not approve of the business combination we complete.
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 one or more target businesses.
Since our board of directors may complete a business combination without seeking stockholder approval, public stockholders may
not have the right or opportunity to vote on the business combination, unless we seek such stockholder vote. 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 stockholders in which we describe our initial business combination.
If we seek stockholder approval of
our initial business combination, our initial stockholders and members of our management team have agreed to vote in favor of such
initial business combination, regardless of how our public stockholders vote.
Our initial stockholders
collectively own, on an as-converted basis, 20% of our outstanding shares of our common stock. Our initial stockholders and
members of our management team also may from time to time purchase Class A common stock prior to our initial business combination.
Our amended and restated certificate of incorporation provides that, if we seek stockholder approval of an initial business combination,
such initial business combination will be approved if we receive the affirmative vote of a majority of the shares voted at such
meeting, including the founder shares. If we submit our initial business combination to our public stockholders for a vote, pursuant
to the terms of a letter agreement entered into with us, our sponsor and members of our management team have agreed to vote their
founder shares and any shares purchased during or after our initial public offering, in favor of our initial business combination.
As a result, in addition to our initial stockholders’ founder shares, we would need 23,000,001, or 40% (assuming all issued
and outstanding shares are voted), or 5,750,001, or 10% (assuming only the minimum number of shares representing a quorum are voted),
of the 57,500,000 public shares sold in our initial offering to be voted in favor of an initial business combination in order to
have our initial business combination approved. Accordingly, if we seek stockholder approval of our initial business combination,
the agreement by our initial stockholders and each member of our management team to vote in favor of our initial business combination
will increase the likelihood that we will receive the requisite stockholder approval for such initial business combination.
The ability
of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential target businesses,
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 stockholders 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, we will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least
$5,000,001 immediately prior to or upon consummation of our initial business combination (so that we do not then become subject
to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement 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 immediately prior to or upon completion of our initial business
combination or such greater amount necessary to satisfy a closing condition, each 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 stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete
the most desirable business combination, if at all, or optimize our capital structure.
At
the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise their
redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that
will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the cash in the
trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a
portion of the cash in the trust account to meet such requirements, or arrange for third-party financing. In addition, if
a larger number of shares is submitted for redemption than we initially expected, we may need to restructure the transaction to
reserve a greater portion of the cash in the trust account or arrange for third-party financing. Raising additional third-party financing
may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. 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 Representatives will not be adjusted for any shares that are redeemed
in connection with a business combination. The per-share amount we will distribute to stockholders who properly
exercise their redemption rights will not be reduced by the deferred underwriting commission and after such redemptions, the per-share value of
shares held by non-redeeming stockholders will reflect our obligation to pay the deferred underwriting commissions.
The ability of our public stockholders
to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business
combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your 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 trust account until we
liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market;
however, at such time our shares may trade at a discount to the pro rata amount per share in the trust account. In either situation,
you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until
we liquidate or you are able to sell your shares in the open market.
The requirement
that we complete our initial business combination within the prescribed time frame may give potential target businesses leverage
over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business
combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial
business combination on terms that would produce value for our stockholders.
Any
potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete
our 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 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 end of the timeframe described above. In addition, we may have limited
time to conduct due diligence. As a result, we may be forced to enter into an agreement for an initial business combination on
terms that we would have rejected had we had more time to complete a transaction.
We may not
be able to complete our initial business combination within the prescribed time frame, in which case we would cease all operations
except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders
may only receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
Our
amended and restated certificate of incorporation provides that we must complete our initial business combination within 24 months
from the closing of our initial public offering. We may not be able to find a suitable target business and complete our initial
business combination within such time period. Our ability to complete our initial business combination may be negatively impacted
by general market conditions, volatility in the capital and debt markets and the other risks described herein. For example, the
outbreak of COVID-19 continues to grow 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 outbreak of the COVID-19 coronavirus and other events (such as terrorist attacks,
natural disasters or a significant outbreak of other infectious diseases) may negatively impact businesses we may seek to acquire.
If we have not completed our initial business combination within such time period or during any Extension 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 taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding
public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right
to receive further liquidating distributions, if any); and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in the case of
clauses (ii) and (iii) to our obligations under Delaware law to provide for claims of creditors and the requirements of other
applicable law. In such case, our public stockholders may only receive $10.00 per share, and our warrants will expire worthless.
In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares. See
“—If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount
received by stockholders may be less than $10.00 per share” and other risk factors in this section.
If we seek
stockholder approval of our initial business combination, our initial stockholders, directors, officers, advisors or their affiliates
may enter into certain transactions, including purchasing shares or warrants from the public, which may influence the outcome of
a proposed business combination and reduce the public “float” of our securities.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our initial stockholders, directors, executive officers, advisors or their
affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or
following the completion of our initial business combination, where otherwise permissible under applicable laws, rules and regulations,
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 shares or public warrants in such transactions.
Such
a purchase may include a contractual acknowledgment that such stockholder, although still the record holder of our shares is no
longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our initial stockholders,
directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders
who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior
elections to redeem their shares. The purpose of any such purchases of shares could be to vote such shares in favor of the business
combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or to satisfy a closing
condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing
of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such
purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters
submitted to the warrant holders for approval in connection with our 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. 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.
In
addition, if such purchases are made, the public “float” of our Class A common stock or warrants and the number
of beneficial holders of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing
or trading of our securities on a national securities exchange.
If 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 at least 24 months from 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.
The
funds available to us outside of the trust account to fund our working capital requirements may not be sufficient to allow us to
operate for at least 24 months from the closing of our the initial public offering, assuming that our initial business combination
is not completed during that time. We believe that the funds available to us outside of the trust account, together with funds
available from loans from our sponsor will be sufficient to allow us to operate for at least 24 months from the closing of our
initial public offering; however, we cannot assure you that our estimate is accurate. 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 do not
complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation
of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less
than $10.00 per share upon our liquidation. See “— If third parties bring claims against us, the proceeds held in the
trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per
share” and other risk factors below.
Of
the net proceeds of our initial public offering and the sale of the private placement warrants, only approximately $1,000,000 was
initially available to us outside the trust account to fund our working capital requirements. If we are required to seek additional
capital, we would need to borrow funds from our sponsor, management team or other third parties to operate or 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 would be repaid only from funds held outside the trust account or from funds released
to us upon completion of our initial business combination. Up to $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 or an affiliate of our sponsor as we do not believe third parties will be willing to loan such
funds and provide a waiver against any and all rights to seek access to funds in our trust account. If we are unable to obtain
these loans, we may be unable to complete our initial business combination. If we do not complete our initial business combination
because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account.
Consequently, our public stockholders may only receive an estimated $10.00 per share, or possibly less, on our redemption of our
public shares, and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than
$10.00 per share upon our liquidation. See “—If third parties bring claims against us, the proceeds held in the trust
account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per
share” and other risk factors in this section.
Subsequent
to the 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 price of our securities, which could cause you to lose some or all of your investment.
Even
if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will
identify all material issues that may be present with a particular target business, that it would be possible to uncover all material
issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will
not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure
our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully
identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with
our preliminary risk analysis. 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 stockholders or warrant holders who choose to remain a stockholder or warrant holder following our
initial business combination could suffer a reduction in the value of their securities. Such security holders are unlikely to have
a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our
officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private
claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the business combination
contained an actionable material misstatement or material omission.
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.
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In addition, we
may have imposed upon us burdensome requirements, including:
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registration as an investment company with the SEC;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and compliance with other
rules and regulations that we are currently not subject to.
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In
order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we
must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our
activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more
than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business
will be to identify and complete a business combination and thereafter to operate the post-transaction business or assets
for the long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan
to buy unrelated businesses or assets or to be a passive investor.
We
do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds
held in the trust account may only be invested in United States “government securities” within the meaning of Section 2(a)(16)
of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under
the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the
trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments,
and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling
businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company”
within the meaning of the Investment Company Act. The trust account is intended as a holding place for funds pending the earliest
to occur of: (i) the completion of an initial business combination; (ii) the redemption of any public shares properly
submitted in connection with a stockholder vote to amend our certificate of incorporation (A) to modify the substance or timing
of our obligation to allow redemption in connection with our initial business combination or certain amendments to our certificate
of incorporation 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 provisions relating to stockholders’
rights or pre-initial business combination activity; and (iii) absent a business combination, our return of
the funds held in the trust account to our public stockholders as part of our redemption of the public shares. Stockholders who
do not exercise their rights to the funds in connection with an amendment to our certificate of incorporation would still have
rights to the funds in connection with a subsequent business combination. 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 are unable to complete our initial business combination, our public stockholders
may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless.
In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares. See
“—If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount
received by stockholders may be less than $10.00 per share” and other risk factors in this section.
If we have
not completed an initial business combination within 24 months from the closing of our initial public offering, our public stockholders
may be forced to wait beyond such 24 months before redemption from our trust account.
If
we have not completed 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 taxes, if any (less up to $100,000 of the interest to pay dissolution expenses), will be used to fund
the redemption of our public shares, as further described herein. Any redemption of public stockholders from the trust account
will be effected automatically by function of our certificate of incorporation 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 stockholders, as
part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the
DGCL. 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 we complete our initial business combination prior thereto and only then in cases where investors have sought
to redeem their Class A common stock. Only upon our redemption or any liquidation will public stockholders be entitled to
distributions if we do not complete our initial business combination.
Our stockholders
may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their
shares.
Under
the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received
by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption
of our public shares in the event we do not complete our initial business combination within 24 months from the closing of our
initial public offering may be considered a liquidating distribution under Delaware law. If a corporation complies with certain
procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against
it, including a 60-day notice period during which any third-party claims can be brought against the corporation,
a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period
before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution
is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder,
and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention
to redeem our public shares as soon as reasonably possible following the 24th month from the closing of our initial public
offering (or the end of any Extension Period) in the event we do not complete our initial business combination and, therefore,
we do not intend to comply with the foregoing procedures.
Because
we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known
to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought
against us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating
company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to
arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution
complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited
to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability
of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly
assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims
to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third
anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon
the redemption of our public shares in the event we do not complete our initial business combination within 24 months from the
closing of our initial public offering is not considered a liquidating distribution under Delaware law and such redemption distribution
is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could
then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.
We may not
hold an annual meeting of stockholders until after the consummation of our initial business combination, which could delay the
opportunity for our stockholders to elect directors.
In
accordance with the NYSE corporate governance requirements, we are not required to hold an annual meeting until one year after
our first fiscal year end following our listing on the NYSE. Under Section 211(b) of the DGCL, we are, however, required to
hold an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws unless such election
is made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors
prior to the consummation of our initial business combination, and thus we may not be in compliance with Section 211(b) of
the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation
of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court
of Chancery in accordance with Section 211(c) of the DGCL.
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 certificate of incorporation,
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 cannot assure you that we will properly ascertain or assess all of the significant
risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our
control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct
investment, if such opportunity were available, in a business combination target. Accordingly, any stockholders who choose to remain
stockholders following our initial business combination could suffer a reduction in the value of their securities. Such stockholders
are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due
to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully
bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the
business combination contained an actionable material misstatement or material omission.
Although
we have identified general criteria and guidelines 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 guidelines, and as a result,
the target business with which we enter into our initial business combination may not have attributes entirely consistent with
our general criteria and guidelines.
Although
we have identified general criteria and guidelines 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 and guidelines, such combination may not be
as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce
a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders
may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that
requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is
required by applicable law or stock exchange listing requirements, or we decide to obtain stockholder approval for business or
other reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target
business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our
public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our
trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00
per share on the redemption of their shares. See “—If third parties bring claims against us, the proceeds held in the
trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00
per share” and other risk factors in this section.
We may face risks related to businesses
in the travel-related and travel-adjacent sectors.
Business combinations
with businesses in the travel-related and travel-adjacent sectors entail special considerations and risks. If we are
successful in completing a business combination with such a target business, we may be subject to, and possibly adversely affected
by, the following risks:
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the severity, extent and duration of the global COVID-19 pandemic
and its impact on the travel industry and consumer spending more broadly, the actions taken to contain the spread of the disease
or treat its impact, the effect of remote working arrangements and the speed and extent of the recovery across the broader travel
ecosystem;
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adverse changes in general market conditions for travel
services, including the effects of macroeconomic conditions, terrorist attacks, natural disasters, health concerns, civil or political
unrest or other events outside our control;
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an inability to compete effectively in a highly competitive
environment with many incumbents having substantially greater resources;
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an inability to manage rapid change, increasing consumer
expectations and growth;
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an inability to build strong brand identity and improve
customer satisfaction and loyalty;
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IT systems-related failures, data privacy risks
and obligations, and/or security breaches;
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an inability to attract and retain customers;
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an inability to license or enforce intellectual property
rights on which a target business may depend; and
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reliance on third-party vendors or service providers.
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Any of the foregoing
could have an adverse impact on our operations following a business combination. However, our efforts in identifying prospective
target businesses will not be limited to the travel-related and travel-adjacent sectors. Accordingly, if we acquire a
target business in another industry, we will be subject to risks attendant with the specific industry in which we operate or target
business we acquire, which may or may not be different than those risks listed above.
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 seeking targets for their initial business combination, as well as many such companies
currently in registration. As a result, at times, fewer attractive targets may be available, and it may require more time, more
effort and more resources to identify a suitable target and to consummate 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, 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.
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. There can be no assurance that these
trends will not continue.
The
increased cost and decreased availability of directors and officers liability insurance could make it more difficult and more expensive
for us to negotiate 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 seek
acquisition opportunities with an early stage company, a private company, a financially unstable business or an entity lacking
an established record of revenue or earnings, which could subject us to volatile revenues or earnings or difficulty in retaining
key personnel.
To
the extent we complete our initial business combination with an early stage company, a financially unstable business or an entity
lacking an established record of revenues or earnings, we may be affected by numerous risks inherent in the operations of the business
with which we combine. These risks include investing in a business without a proven business model and with limited historical
financial data, volatile revenues or earnings and difficulties in obtaining and retaining key personnel. Although our officers
and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain
or assess all the significant risk factors relevant to such acquisition and we may not have adequate time to complete due diligence.
Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that
those risks will adversely impact a target business. We may also seek to complete 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.
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 stockholders 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 stockholders
from a financial point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors,
who will determine fair market value based on standards generally accepted by the financial community. Such standards used will
be disclosed in our proxy solicitation or tender offer materials, as applicable, related to our initial business combination.
Resources
could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts
to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public
stockholders may receive only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation
of our trust account and our warrants will expire worthless.
We
anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements,
disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants,
attorneys and others. If we decide not to complete a specific 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 are unable to complete our initial business combination, our public
stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire
worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their
shares. See “—If third parties bring claims against us, the proceeds held in the trust account could be reduced and
the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk
factors in this section.
We may issue
notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect
our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us.
Although
we have no commitments to date to issue any notes or other debt securities, or to otherwise incur outstanding debt following our
initial public offering, we may choose to incur substantial debt to complete our initial business combination. We have agreed that
we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any
kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per-share amount available
for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
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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 common stock;
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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 common stock if declared, our ability to pay expenses, make capital expenditures
and acquisitions, and fund 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;
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions,
debt service requirements, and execution of our strategy; and
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other purposes and other disadvantages compared to our competitors who have less debt.
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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.
Of
the net proceeds from our initial public offering and the sale of the private placement warrants, approximately $555.8 million
is available to complete our initial business combination and pay related fees and expenses (after taking into account the approximately
$20.1 million of deferred underwriting commissions being held in the trust account ).
We
may complete 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 complete 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 risks. Further, we would not be able to
diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may
have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly,
the prospects for our success may be:
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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.
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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 investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation
of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately
address these risks, it could negatively impact our profitability and results of operations.
We may 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.
Our management
may not be able to maintain control of a target business after our initial business combination. We cannot provide assurance that,
upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably
operate such business.
We
may structure our initial business combination so that the post-transaction company in which our public stockholders own or
acquire shares will own less than 100% of the outstanding equity interests or assets of a target business, 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 the post-transaction company
not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company
owns or acquires 50% or more of the outstanding voting securities of the target, our stockholders prior to 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 our initial business combination. For example, we could pursue a transaction in which we issue a substantial
number of new shares of common stock 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% interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock, our
stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of common stock subsequent
to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person
or group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may make it more likely
that our management will not be able to maintain our control of the target business. We cannot assure you that, upon loss of control
of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such
business.
We 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 stockholders do not agree.
Our
certificate of incorporation does not provide a specified maximum redemption threshold, except that we will only redeem our public
shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon
consummation of our initial business combination (such 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
stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial
business combination and do not conduct redemptions in connection with our business combination pursuant to the tender offer rules,
have entered into privately negotiated agreements to sell their shares to our initial stockholders, officers, directors, advisors
or their affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common
stock 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 shares of Class A common stock submitted for redemption will be returned to the holders thereof,
and we instead may search for an alternate business combination.
In order
to complete our initial business combination, we may seek to amend our certificate of incorporation or other governing instruments,
including our warrant agreement, in a manner that will make it easier for us to complete our initial business combination but that
our stockholders or warrant holders may not support.
In
order to complete 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 an initial business combination and, with
respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities.
We cannot assure you that we will not seek to amend our certificate of incorporation or other governing instruments, including
to extend the time we have to consummate an initial business combination in order to complete our initial business combination.
The provisions of our amended and
restated certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the
agreement governing the release of funds from our trust account) may be amended with the approval of holders of at least 65% of
our common stock, which is a lower amendment threshold than that of some other blank check companies. It may be easier for us,
therefore, to amend our amended and restated certificate of incorporation to facilitate the completion of an initial business combination
that some of our stockholders 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 stockholders.
In those companies, amendment of these provisions typically requires approval by 90% of the company’s stockholders attending
and voting at an annual meeting. Our amended and restated certificate of incorporation will provide that any of its provisions
related to pre-business combination activity (including the requirement to deposit proceeds of this offering and the private
placement of warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption
rights to public stockholders as described herein) may be amended if approved by holders of 65% of our common stock entitled to
vote thereon and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended
if approved by holders of at least 65% of our common stock entitled to vote thereon. In all other instances, our amended and restated
certificate of incorporation may be amended by holders of a majority of our outstanding shares of common stock entitled to vote
thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules. Our initial stockholders and their permitted
transferees, if any, who will collectively beneficially own, on an as converted basis, 20% of our common stock upon the closing
of this offering (assuming they do not purchase any units in this offering), will participate in any vote to amend our amended
and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose.
As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which govern our pre-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 stockholders may pursue remedies against us for any breach of our amended and restated certificate
of incorporation.
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 certificate
of incorporation that would affect the substance or timing of our obligation to allow redemption in connection with our initial
business combination or to redeem 100% of our public shares if we do not complete an initial business combination within 24 months
from the closing of this offering, unless we provide our public stockholders with the opportunity to redeem their Class A
common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then
on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to
us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding
public shares. These agreements are contained in letter agreements that we have entered into with our sponsor and each member of
our management team. Our stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result,
will not have the ability to pursue remedies against our sponsor, executive officers or directors for any breach of these agreements.
As a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject to applicable
law.
We may be
unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target
business, which could compel us to restructure or abandon a particular business combination. If we do not complete our initial
business combination, our public stockholders may only receive their pro rata portion of the funds in the trust account that are
available for distribution to public stockholders, 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 stockholders who elect redemption in connection with our initial business combination or the terms of negotiated
transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing
or to abandon the proposed business combination. We cannot assure you that such financing will be available on acceptable terms,
if at all. The current economic environment may make it 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, our public stockholders may only receive their pro rata portion of the
funds in the trust account that are available for distribution to public stockholders and not previously released to us to pay
our taxes 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 stockholders is required to provide any financing to us in
connection with or after our initial business combination. If we do not complete our initial business combination, our public stockholders
may only receive approximately $10.00 per share on the liquidation of our trust account, and our warrants will expire worthless.
Our initial stockholders control
a substantial interest in us and thus may exert a substantial influence on actions requiring a stockholder vote, potentially in
a manner that you do not support.
Our initial stockholders
own, on an as-converted basis, 20% of our issued and outstanding common stock. Accordingly, they may exert a substantial influence
on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and
restated certificate of incorporation. If our initial stockholders purchases any units in this offering or if our initial stockholders
purchase any additional shares of our Class A common stock in the aftermarket or in privately negotiated transactions, this
would increase their control. Neither our initial stockholders nor, to our knowledge, any of our officers or directors, have any
current intention to purchase additional securities, other than as disclosed in this prospectus. Factors that would be considered
in making such additional purchases would include consideration of the current trading price of our Class A common stock.
In addition, 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 meeting of stockholders 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 meeting, as a consequence of our “staggered” board of directors, only a minority of the board of directors
will be considered for election and our initial stockholders, because of their ownership position, will have considerable influence
regarding the outcome. 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, our initial stockholders will continue to exert
control at least until the completion of our initial business combination.
A provision
of our warrant agreement may make it more difficult for us to consummate an initial business combination.
If:
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we issue additional shares or equity-linked securities for capital raising purposes in connection
with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per share (as adjusted for stock
splits, stock dividends, reorganizations, recapitalizations and the like), 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
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the Market Value is below $9.20 per share (as adjusted for stock splits, stock dividends, reorganizations,
recapitalizations and the like),
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then the exercise
price of each warrant will be adjusted such that the effective exercise price per full share will be equal to 115% of the higher
of the Market Value and the Newly Issued Price, and the $10.00 and $18.00 per-share redemption trigger prices will
be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued Price, respectively.
This may make it more difficult for us to consummate an initial business combination with a target business.
Because
we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous
initial business combination with some prospective target businesses.
The
federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance
tests include target 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 financial statements
in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination
within the prescribed time frame.
Compliance
obligations under the Sarbanes-Oxley Act may make it more difficult for us to complete our initial 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, 2021. 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. Further, for as long
as we remain an emerging growth company, we will not 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.
Provisions in our amended and restated
certificate of incorporation and Delaware law may have the effect of discouraging lawsuits against our directors and officers.
Our amended and restated
certificate of incorporation will require, unless we consent in writing to the selection of an alternative forum, that (i) any
derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed
by any director, officer or other employee to us or our stockholders, (iii) any action asserting a claim against us, our directors,
officers or employees arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or
bylaws, or (iv) any action asserting a claim against us, our directors, officers or employees governed by the internal affairs
doctrine may be brought only in the Court of Chancery in the State of Delaware, except any claim (A) as to which the Court
of Chancery of the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court
of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days
following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court
of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) any action arising
under the Securities Act or the Exchange Act, as to which the Court of Chancery and the federal district court for the District
of Delaware shall have concurrent jurisdiction. If an action is brought outside of Delaware, the stockholder bringing the suit
will be deemed to have consented to service of process on such stockholder’s counsel. Although we believe this provision
benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies,
a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect
of discouraging lawsuits against our directors and officers, although our stockholders will not be deemed to have waived our compliance
with federal securities laws and the rules and regulations thereunder.
Notwithstanding the
foregoing, our amended and restated certificate of incorporation will provide that the exclusive forum provision will not apply
to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have
exclusive jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce
any duty or liability created by the Exchange Act or the rules and regulations thereunder. Although we believe this provision benefits
us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision
may have the effect of discouraging lawsuits against our directors and officers.
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 will have the right to vote on the election of directors, upon the listing of our shares on the NYSE, the NYSE may consider
us to be a ‘controlled company’ within the meaning of the NYSE rules and, as a result, we may qualify for exemptions
from certain corporate governance requirements.
Only holders of our
founder shares will have the right to vote on the election of directors. As a result, the NYSE may consider us to be a ‘controlled
company’ within the meaning of the NYSE corporate governance standards. Under the NYSE 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 the NYSE;
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we have a compensation committee of our board that
is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;
and
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we have a nominating and corporate governance committee
of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose
and responsibilities.
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We do not intend to
utilize these exemptions and intend to comply with the corporate governance requirements of the NYSE, 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 stockholders of companies that are subject to all of the NYSE corporate governance requirements.
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 and complying
with different commercial and legal requirements of overseas markets;
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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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underdeveloped or unpredictable legal or regulatory systems and unexpected changes in regulatory
requirements;
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longer payment cycles and challenges in collecting accounts receivable;
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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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cultural and language differences;
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employment regulations;
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regime changes and political upheaval;
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corruption, crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and
wars;
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deterioration of political relations with the United States; and
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government appropriation of assets.
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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.
Risks Relating
to Our Securities
The NYSE
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.
Our
securities have been listed on the NYSE. Although we currently meet the minimum initial listing standards set forth in the NYSE
listing standards, we cannot assure you that our securities will continue to be listed on the NYSE in the future or prior to our
initial business combination. In order to continue listing our securities on the NYSE prior to our initial business combination,
we must maintain certain financial, distribution and stock price levels. Generally, we must maintain a minimum market capitalization
(generally $50,000,000) and a minimum number of holders of our securities (generally 300 public holders).
Additionally,
in connection with our initial business combination, we will be required to demonstrate compliance with the NYSE’s initial
listing requirements, which are more rigorous than the NYSE’s continued listing requirements, in order to continue to maintain
the listing of our securities on the NYSE. For instance, our share price would generally be required to be at least $4.00 per share,
our global market capitalization would be required to be at least $200 million, the aggregate market value of our publicly-held
shares would be required to be at least $40 million and we would be required to have a minimum of 400 round lot holders and 1,100,000
publicly held shares. We cannot assure you that we will be able to meet those initial listing requirements at that time.
If
the NYSE delists any of our securities from trading on its exchange and we are not able to list such securities on another national
securities exchange, we expect such securities could be quoted on an over-the-counter market. If this were to occur, we could face
significant material adverse consequences, including:
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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 common stock is a “penny stock” which will require
brokers trading
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in our Class A common stock to adhere to more stringent rules and possibly result in a reduced
level of trading activity in the secondary trading market for our securities;
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a limited amount of news and analyst coverage; and
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a decreased ability to issue additional securities or obtain additional financing in the future.
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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 securities are listed on
the NYSE, our securities qualify as covered securities under such statute. Although the states are preempted from regulating the
sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud,
and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular
case. 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 the NYSE, our securities would not qualify as covered securities under such statute and
we would be subject to regulation in each state in which we offer our securities.
If we seek
stockholder 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 stockholders are deemed to hold in excess of 15% of our Class A common stock, you will lose
the ability to redeem all such shares in excess of 15% of our Class A common stock.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our certificate of incorporation provides that a public stockholder, together
with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group”
(as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate
of 15% of the shares sold in our initial public offering (the “Excess Shares”), without our prior consent. However,
our certificate of incorporation does not restrict our stockholders’ 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 stock in
open market transactions,
potentially at a loss.
Holders of our Class A common
stock will not be entitled to vote on any election of directors we hold prior to our initial business combination.
Prior to our initial
business combination, only holders of our founder shares will have the right to vote on the election of directors. Holders of our
public shares will not be entitled to vote on the election 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 completion of an initial business
combination.
We have
not registered the shares of Class A common stock issuable upon exercise of the warrants under the Securities Act or any state
securities laws at this time, and 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 except on a cashless basis and potentially causing such warrants to expire
worthless.
We
have not registered the shares of Class A common stock issuable upon exercise of the warrants under the Securities Act or any state
securities laws at this time. However, under the terms of the warrant agreement, we have agreed that as soon as practicable, but
in no event later than 15 business days after the closing of our initial business combination, we will use our reasonable best
efforts to file, and within 60 business days following our initial business combination to have declared effective, a registration
statement covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants. We will use our reasonable
best efforts to maintain the effectiveness of such registration statement and a current prospectus relating to those shares of
Class A common stock until the warrants expire or are redeemed. We cannot assure you that we will be 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 of our Class A common stock 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 shares of our Class A
common stock that you will receive upon cashless exercise will be based on a formula subject to a maximum number of shares equal
to 0.361 shares of our Class A common stock per warrant (subject to adjustment). However, no such 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, or an exemption from registration is available.
Notwithstanding
the above, if our Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange
such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may,
at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance
with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect
a registration statement, but we will be required to use our 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. 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 shall 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 shares of Class A common stock 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 public warrants included as part of units
sold in our initial public offering. In such an instance, our sponsor and its permitted transferees (which may include our directors,
members of our strategic advisory group and executive officers) would be able to exercise their warrants and sell the common stock
underlying their warrants while holders of our public warrants would not be able to exercise their warrants and sell the underlying
common stock. 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 shares of Class A common stock 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 their warrants.
Our ability
to require holders of our warrants to exercise such warrants on a cashless basis after we call the warrants for redemption or if
there is no effective registration statement covering the shares of our Class A common stock issuable upon exercise of these warrants
will cause holders to receive fewer shares of our Class A common stock upon their exercise of the warrants than they would have
received had they been able to pay the exercise price of their warrants in cash.
If
we call the warrants for redemption, we will have the option, in our sole discretion, to require all holders that wish to exercise
warrants to do so on a cashless basis under certain circumstances. If we choose to require holders to exercise their warrants on
a cashless basis or if holders elect to do so when there is no effective registration statement, the number of shares of our Class
A common stock received by a holder upon exercise will be fewer than it would have been had such holder exercised his or her warrant
for cash. For example, if the holder is exercising 875 public warrants at $11.50 per share through a cashless exercise when the
shares of our Class A common stock have a fair market value of $17.50 per share when there is no effective registration statement,
then upon the cashless exercise, the holder will receive 300 shares of our Class A common stock. The holder would have received
875 shares of our Class A common stock if the exercise price was paid in cash. This will have the effect of reducing the potential
“upside” of the holder’s investment in our company because the warrant holder will hold a smaller number of shares
of our Class A common stock upon a cashless exercise of the warrants they hold.
The warrants
may become exercisable and redeemable for a security other than the shares of our Class A common stock, 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 shares of our Class A common stock. 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 reasonable best efforts to register the
issuance of the security underlying the warrants within fifteen business days of the closing of an initial business combination.
The grant
of registration rights to our initial stockholders 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 common stock.
Pursuant
to a registration rights agreement, our initial stockholders and their permitted transferees can demand that we register the resale
of their founder shares, after those shares convert to shares of our Class A common stock. In addition, holders of our private
placement warrants and their permitted transferees can demand that we register the resale of the private placement warrants and
the shares of Class A common stock issuable upon exercise of the private placement warrants, and holders of warrants that may be
issued upon conversion of working capital loans may demand that we register the resale of such warrants or the Class A common stock
issuable upon exercise of such warrants. 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 common stock. In addition, the existence of the registration rights may make our initial business combination more costly
or difficult to conclude. This is because the stockholders of the target business may increase the equity stake they seek in the
combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A common stock
that is expected when the common stock owned by our initial stockholders, holders of our private placement warrants or holders
of our working capital loans or their respective permitted transferees are registered for resale.
We may issue
additional shares of our Class A common stock or preferred stock to complete our initial business combination or under an employee
incentive plan after completion of our initial business combination. We may also issue shares of Class A common stock upon the
conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a
result of the antidilution provisions contained in our certificate of incorporation. Any such issuances would dilute the interest
of our stockholders and likely present other risks.
Our
certificate of incorporation authorizes the issuance of up to 200,000,000 shares of Class A common stock, par value $0.0001 per
share, 20,000,000 shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value
$0.0001 per share. As of March 29, 2021, there were 165,500,000 and 11,375,000 authorized and unissued shares of Class A common
stock and Class B common stock, respectively, which amount does not take into account the shares of Class A common stock reserved
for issuance upon exercise of any outstanding warrants or the shares of Class A common stock issuable upon conversion of Class
B common stock. As of March 29, 2021, there are no shares of preferred stock issued and outstanding. Shares of Class B common stock
are convertible into shares of our Class A common stock initially at a one-for-one ratio but subject to adjustment as set forth
herein, including in certain circumstances in which we issue Class A common stock or equity-linked securities related to our initial
business combination.
We
may issue a substantial number of additional shares of common or preferred stock to complete our initial business combination (including
pursuant to a specified future issuance) or under an employee incentive plan after completion of our initial business combination.
We may also issue shares of Class A common stock to redeem the warrants or upon conversion of the Class B common stock at a ratio
greater than one-to-one at the time of our initial business combination as a result of the antidilution provisions contained in
our certificate of incorporation. Our Class B common stock shall only be convertible at the time of our initial business combination.
However, our certificate of incorporation provides, among other things, that prior to our initial business combination, we may
not issue additional securities that would entitle the holders thereof, to (1) receive funds from the trust account or (2) vote
as a class with our public shares (a) on any initial business combination or (b) to approve an amendment to our certificate of
incorporation. The restriction on issuing additional shares of capital stock described in the prior sentence will expire upon consummation
of our initial business combination. The issuance of additional shares of common or preferred stock:
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may significantly dilute the equity interest of investors in our initial public offering, which
dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of Class A shares
on a greater than one-to-one basis upon conversion of the Class B common stock;
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may subordinate the rights of holders of our common stock if preferred stock is issued with rights
senior to those afforded our common stock;
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could cause a change of control if a substantial number of shares of our common stock is 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 stock 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 common stock and/or warrants;
and
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may not result in adjustment to the exercise price of our warrants.
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Unlike some
other similarly structured blank check companies, our initial stockholders will receive additional shares of our Class A common
stock if we issue shares to complete an initial business combination.
The
founder shares will automatically convert into shares of our Class A common stock at the time of our initial business combination,
or earlier at the option of the holder, on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations,
recapitalizations and the like, and subject to further adjustment as described herein. In the case that additional shares of Class
A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in our initial public
offering and related to the closing of our initial business combination, including pursuant to a specified future issuance, the
ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders
of a majority of the then-outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance
or deemed issuance, including pursuant to a specified future issuance) so that the number of shares of Class A common stock issuable
upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of
the total number of all shares of common stock outstanding upon the completion of our initial public offering plus all shares of
Class A common stock and equity-linked securities issued or deemed issued in connection with our initial business combination (excluding
any shares or equity-linked securities issued or issuable to any seller in the initial business combination). This is different
than other similarly structured blank check companies in which the initial stockholders will only be issued an aggregate of 20%
of the total number of shares to be outstanding prior to the initial business combination.
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 shares of our Class A common stock purchasable upon exercise of a warrant could be
decreased, all without your approval.
Our
warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant
agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to
cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding
public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly,
we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding
public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at
least 50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other
things, increase the exercise price of the warrants, convert the warrants into cash or stock, shorten the exercise period or decrease
the number of shares of our Class A common stock purchasable upon exercise of a warrant.
We may redeem
your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We
have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price
of $0.01 per warrant, provided that the last reported sales price of our Class A common stock equals or exceeds $18.00 per share
(as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within
a 30 trading-day period commencing once the warrants become exercisable and ending on the third trading day prior to the date on
which we send the notice of redemption to the warrant holders and provided 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 public warrants as set forth above even if
the holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants could force you (i) to exercise
your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your
warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption
price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the market
value of your warrants. None of the private placement warrants will be redeemable by us, except under certain circumstances, so
long as they are held by our sponsor and its permitted transferees.
In
addition, unlike many other similarly structured blank check companies, we have the ability to redeem outstanding warrants 90 days
after they become exercisable for $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 common stock determined based
on the redemption date and the fair market value of our Class A common stock and provided certain other conditions are met. We
would redeem the warrants in this manner when we believe it is in our best interest to update our capital structure to remove the
warrants and pay fair market value to the warrant holders. Any such redemption may have similar consequences to the redemption
described in the above paragraph. In addition, such redemption may occur at a time when the warrants are “out-of-the-money,”
in which case you would lose any potential embedded value from a subsequent increase in the value of the Class A common stock had
your warrants remained outstanding. Finally, this redemption feature provides a ceiling to the value of your warrants since it
locks in the redemption price in the number of Class A common stock to be received if we choose to redeem the warrants for common
stock. This redemption feature may cause our warrants to be worth less than other blank check companies which do not have this
feature.
Our warrants
and founder shares may have an adverse effect on the market price of our Class A common stock and make it more difficult to complete
our initial business combination.
We
issued warrants to purchase 17,250,000 shares of Class A common as part of the units and, simultaneously with the closing of our
initial public offering, we issued private placement warrants to purchase an aggregate of 8,900,000 shares of Class A common stock.
Our initial stockholders currently own an aggregate of 8,625,000 founder shares. The founder shares are convertible into shares
of Class A common stock on a one-for-one basis, subject to adjustment as set forth herein. In addition, if our initial stockholders,
officers, directors or their affiliates makes any working capital loans, up to $1,500,000 of such loans may be convertible into
warrants, at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement
warrants.
To
the extent we issue shares of Class A common stock to complete a business combination, the potential for the issuance of a substantial
number of additional shares of Class A common stock upon exercise of these warrants and conversion rights could make us a less
attractive acquisition vehicle to a target business. Any such issuance will increase the number of issued and outstanding shares
of our Class A common stock and reduce the value of the shares of Class A common stock issued to complete the business combination.
Therefore, our warrants and founder shares may make it more difficult to complete a business combination or increase the cost of
acquiring the target business. The private placement warrants are identical to the warrants sold as part of the units in our initial
public offering except that, so long as they are held by our sponsor and its permitted transferees, (i) they will not be redeemable
by us, except under certain circumstances, (ii) they (including the Class A common stock issuable upon exercise of these warrants)
may not, subject to certain limited exceptions, be transferred, assigned or sold until 30 days after the completion of our initial
business combination, (iii) they may be exercised by the holders on a cashless basis and (iv) the holders thereof (including with
respect to the shares of common stock issuable upon exercise of these warrants) are entitled to registration rights. The private
placement warrants will not vote on any amendments to the warrant agreement.
Because each unit contains one-third
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-third of
one warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole
units will 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 shares of our Class A common stock to be issued
to the warrant holder. This is different from other offerings similar to ours whose units include one common 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 third
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.
Provisions
in our certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might
be willing to pay in the future for our Class A common stock and could entrench management.
Our
certificate of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider
to be in their best interests. These provisions include a staggered board of directors and the ability of the board of directors
to designate the terms of and issue new series of preferred shares, which may make the removal of management more difficult and
may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
We
are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these
provisions may make the removal of management more difficult and may discourage transactions that otherwise could involve payment
of a premium over prevailing market prices for our securities.
If a stockholder
fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails
to comply with the procedures for tendering its shares, such shares may not be redeemed.
We
will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial
business combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials,
as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents
or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business
combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares.
For example, if we hold a stockholder meeting to approve a transaction, we may require our public stockholders seeking to exercise
their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their
certificates to our transfer agent prior to the date set forth in the proxy materials mailed to such holders, or up to two business
days prior to the vote on the proposal to approve the business combination, or to deliver their shares to the transfer agent electronically.
In the event that a stockholder fails to comply with these or any other procedures, its shares may not be redeemed.
You will
not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your
investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss.
Our
public stockholders 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 shares of our Class A common stock that such stockholder
properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly
tendered in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify
the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem
100% of our public shares if we do not complete an initial business combination by August 7, 2022 or (B) with respect to any
other provisions relating to stockholders’ rights or pre-initial business combination activity, and (iii) the redemption
of our public shares if we have not completed an initial business by August 7, 2022, subject to applicable law and as further described
herein. Public stockholders who redeem their Class A common stock in connection with a stockholder 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 have not completed an initial business combination by August 7, 2022, with respect
to such Class A common stock so redeemed. In addition, if we do not complete an initial business combination within 24 months
from the closing of this offering is not completed for any reason, compliance with Delaware law may require that we submit a plan
of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our trust
account. In that case, public stockholders may be forced to wait beyond August 7, 2022 before they receive funds from our trust
account. In no other circumstances will a public stockholder have any right or interest of any kind in the trust account. Holders
of warrants will not have any 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 will have net tangible assets in excess of $5,000,000 upon
the successful completion of our initial public offering and the sale of the private placement warrants and will file 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 will be immediately tradable and we will 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.
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, our public stockholders may receive only their pro
rata portion of the funds in the trust account that are available for distribution to public stockholders, 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 this 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 stockholder 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 do not complete our initial business combination our public stockholders may receive only their pro rata portion of the funds
in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless.
Risks Relating
to Our Management Team
Past performance by our management
team or their respective affiliates (including our founders) may not be indicative of future performance of an investment in us
or in the future performance of any business that we may acquire.
Information regarding
past performance is presented for informational purposes only. Any past experience or performance of our founders, our management
team and their respective affiliates is not a guarantee of either (i) our ability to successfully identify and execute a transaction
or (ii) success with respect to any business combination that we may consummate. You should not rely on the historical record
of our founders, our management team or their respective affiliates as indicative of the future performance of an investment in
us or the returns we will, or are likely to, generate going forward.
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 complete an initial business combination. Our obligation to indemnify
our officers and directors may discourage stockholders from bringing a lawsuit against our officers or directors for breach of
their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our
officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore,
a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against
our officers and directors pursuant to these indemnification provisions.
Members
of our management team may in the future be involved in governmental investigations and civil litigation relating to the business
affairs of companies with which they are, were, or may in the future be, affiliated. This may negatively affect our ability to
consummate an initial business combination.
Members
of our management team may in the future be involved in governmental investigations and civil litigation relating to the business
affairs of companies with which they are, were or may in the future be affiliated with. Any such investigations or litigations
may divert our management team’s attention and resources away from searching for an initial business combination, may be
detrimental to our reputation, and thus may negatively affect our ability to complete an initial business combination.
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 candidate 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 candidate, we cannot assure you
that we will adequately ascertain or assess all the significant risk factors relevant to such acquisition. We also cannot assure
you that an investment in our units will not ultimately prove to be less favorable to investors in our initial public offering
than a direct investment, if an opportunity were available, in a business combination candidate. 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 Annual 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 the significant risk factors relevant to such acquisition. Accordingly, any stockholders
or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer
a reduction in the value of their securities. Such security holders are unlikely to have a remedy for such reduction in value.
Our ability
to successfully complete our initial business combination and to be successful thereafter will be totally dependent upon the efforts
of members of our management team, some of whom may join us following our initial business combination. The loss of such people
could negatively impact the operations and profitability of our post-combination business.
Our
ability to successfully complete our business combination is dependent upon the efforts of members of our management team. The
role of members of our management team in the target business, however, cannot presently be ascertained. Although some members
of our management team 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.
In
addition, the officers and directors of an acquisition candidate may resign upon completion of our initial business combination.
The departure of a target business’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. The loss of key personnel could negatively impact the
operations and profitability of our post-combination business.
Members
of our management team may negotiate employment or consulting agreements with a target business in connection with a particular
business combination. These agreements may provide for them to receive compensation following our business combination and as a
result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Members
of our management team may be able to remain with the 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.
The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business
and completing a business combination. However, we believe the ability of such individuals to remain with us after the completion
of our initial business combination will not be the determining factor in our decision as to whether or not we will proceed with
any potential business combination. There is no certainty, however, that any members of our management team will remain with us
after the completion of our initial business combination. We cannot assure you that any members of our management team will remain
in senior management or advisory positions with us. The determination as to whether any members of our management team will remain
with us will be made at the time of our initial business combination.
We may have
a limited ability to assess the management of a prospective target business and, as a result, may complete our initial business
combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company,
which could, in turn, negatively impact the value of our stockholders’ investment in us.
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’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications
or abilities we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary to
manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly,
any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination
could suffer a reduction in the value of their securities. Such security 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 departure of a target business’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.
Our officers
and directors may 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.
None
of our officers or directors is required to commit his or her 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, including
other business endeavors for which he or she may be entitled to substantial compensation. We do not intend to have any full-time
employees prior to the completion of our initial business combination. Our independent directors also serve as officers or board
members for other entities. If our officers’ and directors’ other business affairs require them to devote substantial
amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our
affairs, which may have a negative impact on our ability to complete our initial business combination.
Certain
of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities
similar to those intended to be conducted by us (and they may also become an officer or director of any other special purpose acquisition
company) and, accordingly, may have conflicts of interest in allocating their time and 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 or entities. Our initial stockholders and officers and directors are, and may in the future become, affiliated with
entities (such as operating companies or investment vehicles) that are engaged in a similar business, including N2.
Our
officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the
other entities in the future to which they owe certain fiduciary or contractual duties. Accordingly, they may have conflicts of
interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved
in our favor and a potential target business may be presented to another entity prior to its presentation to us.
Our officers,
directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We
have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct
or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which
we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated
with our initial stockholders, directors or officers, or any of their affiliates although we do not currently intend to do so,
or we may acquire a target business through an Affiliated Joint Acquisition. We do not 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.
Despite
our agreement that, in the event we seek to complete our initial business combination with a company business that is affiliated
with our initial stockholders, officers or directors, or any of their affiliates, we, or a committee of independent directors,
will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation
opinions that our initial business combination is fair to us from a financial point of view, potential conflicts of interest still
may exist. As a result, the terms of the business combination may not be as advantageous to our company and our public stockholders
as they would be absent any conflicts of interest.
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), a conflict of interest may arise in determining whether a particular business combination target
is appropriate for our initial business combination.
On June 22, 2020,
the sponsor purchased 14,375,000 shares of our Class B common stock for an aggregate purchase price of $25,000, or approximately
$0.002 per share. Prior to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible
or intangible. The number of founder shares issued was determined based on the expectation that such founder shares would represent
20% of the outstanding shares after this offering. In July 2020, our sponsor transferred 25,000 founder shares to each of our independent
director nominees at their original purchase price. The founder shares will be worthless if we do not complete an initial business
combination. In addition, in connection with our initial public offering our sponsor purchased 9,000,000 private placement warrants,
each exercisable to purchase one share of our Class A common stock at $11.50 per share, for a purchase price of $13,500,000,
or $1.50 per whole warrant, that will also be worthless if we do not complete a business combination. Holders of founder shares
have agreed (A) to vote any shares owned by them in favor of any proposed business combination and (B) not to redeem
any founder shares in connection with a stockholder vote to approve a proposed initial business combination. In addition, we may
obtain loans from our sponsor, affiliates of our sponsor or an officer or director, and we may pay our sponsor, officers, directors
and any of their respective affiliates fees and expenses in connection with identifying, investigating and completing an initial
business combination.
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 this offering nears, which is the
deadline for our completion of an initial business combination.
Risks Relating
to the Trust Account
If third
parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption
amount received by stockholders may be less than $10.00 per share.
Our
placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek
to have all vendors, service providers (other than our independent 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 stockholders, such parties may not execute such agreements,
or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but
not limited to, 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. Making such a request of potential target businesses may make our acquisition proposal
less attractive to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field
of potential target businesses that we might pursue.
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 completed our initial business combination within the prescribed timeframe,
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 stockholders could be less than the $10.00 per share
initially held in the trust account, due to claims of such creditors. Our sponsor has agreed that it will be liable to us if and
to the extent any claims by a third party for services rendered or products sold to us, or by a prospective target business with
which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00
per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of
the trust account due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn
to pay taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights
to seek access to the trust account and except as to any claims under our indemnity of the underwriters of our initial public offering
against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is
deemed to be unenforceable against a third party, then our sponsor will not be responsible to the extent of any liability for such
third-party claims. We have not independently verified whether our sponsor, which is a newly formed entity, has sufficient
funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. We have
not asked our sponsor to reserve for such indemnification obligations. Therefore, we believe it is unlikely our sponsor would be
able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds
available for our initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event,
we may not be able to complete our initial business combination, and you would receive such lesser amount per public share in connection
with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including,
without limitation, claims by vendors and prospective target businesses.
Our independent
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 stockholders.
In
the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public share or (ii) such
lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions
in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, and our sponsor
asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim,
our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations.
While
we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so
if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable
or if the independent directors determine that a favorable outcome is not likely. If our independent directors choose not to enforce
these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders
may be reduced below $10.00 per share.
The securities
in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of
the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00
per share.
The
proceeds held in the trust account will be held as cash or invested only in U.S. government treasury obligations with a maturity
of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company
Act, which invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations
currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in
Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not
ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we are unable
to complete our initial business combination or make certain amendments to our certificate of incorporation, our public stockholders
are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income,
net of taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000 of interest).
Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount
received by public stockholders may be less than $10.00 per share.
If, after
we distribute the proceeds in the trust account to our public stockholders, 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 court may
seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties
to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.
If,
after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy or winding-up petition
or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions received
by stockholders 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 stockholders. In addition, our board of directors may be viewed as having breached its fiduciary
duty to our creditors and/or having acted in bad faith, by paying public stockholders from the trust account prior to addressing
the claims of creditors, thereby exposing itself and us to claims of punitive damages.
If, before
distributing the proceeds in the trust account to our public stockholders, 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 stockholders and the per-share amount that would otherwise
be received by our stockholders in connection with our liquidation may be reduced.
If,
before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy 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 stockholders. To the extent any bankruptcy claims deplete the
trust account, the per-share amount that would otherwise be received by our stockholders in connection with our
liquidation may be reduced.
Risks Relating
to Taxation
An investment
in our securities may result in uncertain or adverse U.S. federal income tax consequences.
The
U.S. federal income tax consequences of a cashless exercise of the warrants included in the units issued in our initial public
offering are unclear under current law, and the adjustment to the exercise price and/or redemption price of the warrants could
give rise to dividend income to investors without a corresponding payment of cash. In addition, it is unclear whether the redemption
rights with respect to our shares of common stock suspend the running of a U.S. holder’s holding period for purposes of determining
whether any gain or loss realized by such holder on the sale or exchange of common stock is long-term capital gain or loss and
for determining whether any dividend we pay would be considered “qualified dividends” for U.S. federal income tax purposes.
We would be subject to a second level
of U.S. federal income tax on a portion of our income if we are determined to be a personal holding company (a “PHC”),
for U.S. federal income tax purposes.
A U.S. corporation generally
will be classified as a PHC for U.S. federal income tax purposes in a given taxable year if (i) at any time during the last
half of such taxable year, five or fewer individuals (without regard to their citizenship or residency and including as individuals
for this purpose certain entities such as certain tax-exempt organizations, pension funds and charitable trusts) own or are
deemed to own (pursuant to certain constructive ownership rules) more than 50% of the stock of the corporation by value and (ii) at
least 60% of the corporation’s adjusted ordinary gross income, as determined for U.S. federal income tax purposes, for such
taxable year consists of PHC income (which includes, among other things, dividends, interest, certain royalties, annuities and,
under certain circumstances, rents).
General Risk
Factors
Changes
in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and
results of operations.
We
are subject to laws and regulations enacted by national, regional and local governments. 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.
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 and 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
stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access
to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances
could cause us to lose that status earlier, including if the market value of our common stock held by non-affiliates exceeds $700
million as of the end of any second quarter of a fiscal year, in which case we would no longer be an emerging growth company as
of the end of such fiscal year. We cannot predict whether investors will find our securities less attractive because we will rely
on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the
trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities
and the trading prices of our securities may be more volatile.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial
accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared
effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised
financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and
comply with the requirements that apply to non-emerging growth companies but any such 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
common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual
revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates
exceeds $700 million as of the end of that year’s second fiscal quarter. To the extent we take advantage of such reduced
disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.