Item
1. Business.
Introduction
We
are a blank check company formed as a Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with one or more businesses (the “business combination”).
While we may pursue an initial business combination target in any industry or geographic region, we intend to focus on companies that
have an aggregate enterprise value of approximately $500 million to $5 billion or more, are North American- or Western European-based,
have excellent management teams, have a robust outlook for long-term growth and would benefit from access to capital to fund organic
growth or acquisitions.
Our
strategy will be to capitalize on inefficiencies we identify in the market, specifically with regards to private equity funds and private
companies looking for liquidity. Consistent with this strategy, we have identified the following general criteria and guidelines that
we believe are important in evaluating prospective target businesses. We intend to 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.
| ● | Middle-Market
Businesses. We intend to seek to acquire one or more businesses with an aggregate enterprise
value of approximately $500 million to $5 billion or more, determined in the sole discretion
of our officers and directors according to reasonably accepted valuation standards and methodologies.
Although we have no commitment as of the date of the initial pubic offering (as defined below),
we will likely need to issue a substantial number of additional shares of Class A common
stock or shares of preferred stock, or a combination thereof, either to sellers of a target
company or to investors that will provide us capital, to complete a business combination.
We believe that the middle market segment provides the greatest number of opportunities for
investment. This segment is where we believe we have the strongest network to identify the
greatest number of attractive opportunities. |
| ● | Companies
Which Have Strong Public Comparables. We intend to seek to acquire one or more businesses
where strong public comparables exist. The existence of public companies which operate in
similar industry sectors or have similar operating metrics to a potential target business
will be important in helping to establish that the valuation of our initial business combination
is attractive relative to such public companies. |
| ● | Established
Companies with Proven Track Records. We intend to seek to acquire one or more established
companies with consistent historical financial performance. We intend to focus on companies
with a history of strong operating and financial results and strong fundamentals. We also
intend to focus on companies where we are able to gain a clear understanding of their market
and growth strategy. We do not currently intend to acquire start-up companies or companies
with recurring negative free cash flow. |
| ● | Companies
with Proven Revenue and Earnings Growth or Potential for Revenue and Earnings Growth.
We intend to seek to acquire one or more businesses that have achieved or have the potential
for significant revenue and earnings growth through a combination of organic growth, synergistic
add-on acquisitions, new product markets and geographies, increased production capacity,
expense reduction and increased operating leverage. We intend to focus on companies that
have a scalable, capital efficient business model, operate in industries that have strong
barriers to entry and have a sustainable competitive advantage in an attractive industry. |
| ● | Experienced
Management Team. We intend to seek to acquire one or more businesses with a strong, driven
and experienced management team that provides a platform for us to further develop the acquired
business’s management capabilities. We may also seek to partner with a potential target’s
management team where the operating and financial abilities of our executive team and board
could complement their own capabilities. |
| ● | Sectors
Exhibiting Secular Growth or with Potential for Cyclical Uptick. We intend to focus on
acquisition targets in sectors which exhibit positive secular growth or potential for near-term
cyclical uptick. We plan to identify sectors that have demonstrated strong positive growth
in recent years, possess drivers for continued growth and are strategically positioned to
benefit from upswings in their respective industry cycles. |
| ● | Benefit
from Being a Public Company. We intend to acquire one or more businesses that will benefit
from being publicly-traded and can effectively utilize the broader access to capital and
the public profile that are associated with being a publicly-traded company. |
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 and criteria
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 the initial public offering
prospectus, would be in the form of proxy solicitation materials or tender offer documents that we would file with the U.S. Securities
and Exchange Commission (the “SEC”). Our amended and restated certificate of incorporation (as amended on March 17, 2021,
our “amended and restated certificate of incorporation”) prohibits us from effectuating a business combination with another
blank check company or similar company with nominal operations.
We
have neither engaged in any operations nor generated any revenue to date. Based on our business activities, the Company is a “shell
company” as defined under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) because we have no operations
and nominal assets consisting almost entirely of cash.
On
March 22, 2021, we consummated our initial public offering (the “initial public offering”) of 30,000,000 units (the “units”
and, with respect to the shares of Class A common stock, par value $0.0001 per share, included in the units sold, the “public shares”).
Each unit consists of one share of Class A common stock, par value $0.0001 per share (the “Class A common stock”) and one-fourth
of one redeemable warrant (“public warrant”), with each whole warrant entitling the holder thereof to purchase one share
of Class A common stock for $11.50 per share. The units were sold at a price of $10.00 per unit, generating gross proceeds of $300 million.
We granted the underwriters for the initial public offering a 45-day option to purchase up to 4,500,000 additional units to cover over-allotments,
if any. On March 30, 2021, in connection with the underwriters’ partial exercise of their over-allotment option, we consummated
the sale of an additional 3,601,509 units at a price of $10.00 per unit and the sale of an additional 72,301 private placement units
(as defined below) at a price of $10.00 per private placement unit, generating total gross proceeds of $36,738,100.
Simultaneously
with the consummation of the initial public offering, we completed the private sale (the “private placement”) of an aggregate
of 930,000 units (the “private placement units”) at a price of $10.00 per private placement unit in which Forum Investors
IV LLC, our sponsor (the “Sponsor”), purchased 780,000 private placement units and Jefferies LLC purchased 150,000 private
placement units, generating gross proceeds of $9,300,000. In connection with the underwriters’ partial exercise of the over-allotment
option on March 30, 2021, the Sponsor purchased an additional 54,022 private placement units and Jefferies LLC purchased an additional
18,008 private placement units. Each private placement unit consists of one share of Class A common stock (“private placement share”)
and one-fourth of one warrant (each, a “private placement warrant”, and collectively with the public warrants, the “warrants”).
Each private placement warrant is exercisable to purchase one share of Class A common stock at an exercise price of $11.50 per share,
subject to adjustment. The private placement units are identical to the units sold in the initial public offering except that (a) private
placement units (including the underlying securities) may not, subject to certain limited exceptions, be transferred, assigned or sold
by the holders until 30 days after the completion of our initial business combination and (b) the private placement warrants, so long
as they are held by the Sponsor or Jefferies LLC or their permitted transferees, (i) will not be redeemable by us (subject to certain
limited exceptions), (ii) may be exercised by the holders on a cashless basis, (iii) will be entitled to registration rights and (iv)
for so long as they are held by the underwriters, will not be exercisable more than five years from the effective date of the registration
statement of which the initial public offering prospectus forms a part in accordance with FINRA Rule 5110(g)(8)(A). The holders will
be permitted to transfer the private placement units held by them to certain permitted transferees, including our and the underwriters’
officers and directors and other persons or entities affiliated with or related to them, but the transferees receiving such securities
will be subject to the same agreements with respect to such securities as the Sponsor and Jefferies LLC. Otherwise, the private placement
warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in the initial public
offering, including as to exercise price, exercisability and exercise period.
Prior
to the consummation of the initial public offering, on January 15, 2021, we issued an aggregate of 8,625,000 shares of our Class B common
stock, par value $0.0001 per share (the “founder shares” or “Class B common stock”), to the Sponsor for an aggregate
purchase price of $25,000 in cash. Up to 1,125,000 founder shares were subject to forfeiture by the Sponsor depending on the extent to
which the underwriters’ over-allotment option was exercised. As a result of the underwriters’ election to partially exercise
their over-allotment option on March 30, 2021, a total of 224,623 founder shares were forfeited and 900,377 founder shares are no longer
subject to forfeiture, resulting in an aggregate of 8,400,377 founder shares issued and outstanding.
A
total of $300,000,000, comprised of $296,000,000 of the proceeds from the initial public offering (which amount includes $10,500,000
of the underwriters’ deferred discount) and $6,000,000 of the proceeds of the sale of the private placement units, was placed in
a U.S.-based trust account (the “trust account”) at J.P. Morgan Chase Bank, N.A., maintained by Continental Stock Transfer
& Trust Company, acting as trustee. On March 30, 2021, in connection with the underwriters’ partial exercise of their over-allotment
option, a total of $36,015,090 was deposited into the trust account, bringing the aggregate proceeds held in the trust account to $336,015,090
(which amount includes $11,760,528 of the underwriters’ deferred discount).
The
funds held in the trust account are invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment
Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in money market funds
meeting the conditions of Rule 2a-7 of the Investment Company Act which invest only in direct U.S. government treasury obligations.
As
of December 31, 2021, there was $336,041,292 in investments and cash held in the trust account, which includes interest income available
to us for franchise and income tax obligations of approximately $26,202, and approximately $1,524,181 million of cash held outside the
trust account. As of December 31, 2021, we have not withdrawn any interest earned from the trust account to pay taxes.
Effecting
Our Initial Business Combination
General
We
are not presently engaged in, and we will not engage in, any operations until the consummation of our initial business combination. We
intend to effectuate our initial business combination using cash held in the trust account, the proceeds of the sale of our shares in
connection with our initial business combination (including pursuant to forward purchase agreements or backstop agreements we may enter
into), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination
of the foregoing. We may seek to complete our initial business combination with a company or business that may be financially unstable
or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If
our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account
are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A
common stock, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for
maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred
in completing our initial business combination, to fund the purchase of other companies or for working capital.
Selection
of a target business and structuring of our initial business combination
The
listing rules of The Nasdaq Capital Market (“Nasdaq”) and our amended and restated certificate of incorporation require that
we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held
in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account)
at the time of our signing a definitive agreement in connection with our initial business combination. Our board of directors will make
the determination as to the fair market value of our initial business combination. If our board of directors is not able to independently
determine the fair market value of our initial business combination target, we will obtain an opinion from an independent investment
banking firm that is a member of FINRA or an independent valuation or appraisal firm with respect to the satisfaction of such criteria.
While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value
of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular
target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. In addition, pursuant
to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.
We
anticipate structuring our initial business combination either (i) in such a way so that the post-transaction 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, or (ii) in such
a way so that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order
to meet certain objectives of the target management team or stockholders, or for other reasons. However, we will only complete an initial
business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target
or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment
company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities
of the target, our stockholders prior to the initial business combination may collectively own a minority interest in the post-transaction
company, depending on valuations ascribed to the target and us in the initial 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-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken
into account for purposes of the 80% of net assets test described above. If the initial business combination involves more than one target
business, the 80% of net assets test will be based on the aggregate value of all of the target businesses.
In
evaluating a prospective target business, we expect to conduct a due diligence review which may encompass, among other things, meetings
with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as
a review of financial and other information that will be made available to us. We will also utilize our operational and capital allocation
experience in evaluating each prospective business combination.
We
are not prohibited from pursuing an initial business combination with a business that is affiliated with our Sponsor or our officers
or directors or completing the business combination through a joint venture or other form of shared ownership with our Sponsor, officers
or directors. In the event we seek to complete our initial business combination with a business that is affiliated (as defined in our
amended and restated certificate of incorporation) with our Sponsor, 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 another independent entity that commonly
renders valuation opinions stating that the consideration to be paid by us in such an initial business combination is fair to our company
from a financial point of view.
Our
officers and directors indirectly own founder shares and/or private placement units. Because of this ownership, our Sponsor and our officers
and directors 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, each of our officers and directors may have a conflict of interest with respect
to evaluating a particular business combination if the retention or resignation of any such officers and directors were to be included
by a target business as a condition to any agreement with respect to our initial business combination. Each of our officers and directors
presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to
which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any
of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has
then-current fiduciary or contractual obligations to present the opportunity to such entity, he or she will honor his or her fiduciary
or contractual obligations to present such opportunity to such entity. Our directors and officers are not required to commit any specified
amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time among various business
activities, including identifying potential business combinations and monitoring the related due diligence. In addition, our officers
or directors may be investors, or have other direct or indirect interests, in a business with which we may enter into a business combination
agreement and/or in certain funds or other persons that may purchase shares of our Class A common stock in the public market. In addition,
our Sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue
other business or investment ventures during the period in which we are seeking an initial business combination. Any such companies,
businesses or investments may present additional conflicts of interest in pursuing an initial business combination. Our amended and restated
certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless
such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity
is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent
the director or officer is permitted to refer that opportunity to us without violating another legal obligation.
Redemption
rights for holders of public shares upon consummation of the initial business combination
We
will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our
initial business combination either (i) in connection with a stockholder meeting called to approve the initial business combination or
(ii) without a stockholder vote by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed
initial business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of
factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval
under applicable law or stock exchange listing requirements. Under Nasdaq rules, asset acquisitions and stock purchases would not typically
require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than
20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would typically require stockholder
approval. So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply with Nasdaq’s
stockholder approval rules.
If
we provide our public stockholders with the opportunity to redeem their public shares in connection with a stockholder meeting, we will:
| ● | conduct
the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation
of proxies, and not pursuant to the tender offer rules, and |
| ● | file
proxy materials with the SEC. |
If
we seek stockholder approval, we will complete our initial business combination only if a majority of the then outstanding shares of
common stock present and entitled to vote at the meeting to approve the initial business combination when a quorum is present are voted
in favor of the initial business combination. A quorum for such meeting will consist of the holders present in person or by proxy of
shares of outstanding capital stock of the Company representing a majority of the voting power of all outstanding shares of capital stock
of the Company entitled to vote at such meeting. Our initial stockholders will count towards this quorum and, pursuant to the letter
agreement, our Sponsor, officers and directors have agreed to vote any founder shares and private placement shares held by them and any
public shares acquired by them during or after our initial public offering (including in open market and privately-negotiated transactions)
in favor of our initial business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock
voted, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. These quorum and
voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial
business combination. Each public stockholder may elect to redeem its public shares irrespective of whether they vote for or against
the proposed transaction or whether they were a stockholder on the record date for the stockholder meeting held to approve the proposed
transaction.
We
will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the
completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in
the trust account as of two business days prior to the consummation of the initial business combination including interest earned on
the funds held in the trust account and not previously released to us to pay our franchise and income taxes, divided by the number of
then outstanding public shares, subject to the limitations described herein. The amount in the trust account is approximately $10.00
per public share as of December 31, 2021. The per-share amount we will distribute to investors who properly redeem their shares will
not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include the requirement
that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion
of our initial business combination with respect to our warrants.
Our
amended and restated certificate of incorporation provides that in no event will we redeem our public shares in an amount that would
cause our net tangible assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum
cash requirement for: (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate
purposes or (iii) the retention of cash to satisfy other conditions. 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 initial business combination exceed the aggregate amount of cash available to us, we will not complete
the initial business combination or redeem any shares in connection with such initial business combination, and all shares of Class A
common stock submitted for redemption will be returned to the holders thereof. We may, however, raise funds through the issuance of equity-linked
securities or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to
forward purchase agreements or backstop arrangements we may enter into following consummation of the initial public offering, in order
to, among other reasons, satisfy such net tangible assets or minimum cash requirements.
Conduct
of redemptions pursuant to tender offer rules
If
we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our amended and restated certificate of incorporation:
(a) conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and (b)
file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial
and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange
Act, which regulates the solicitation of proxies.
Submission
of our initial business combination to a stockholder vote
In
the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection
therewith, provide our public stockholders with the redemption rights described above upon completion of the business combination.
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 Sponsor, directors, officers, advisors or their affiliates may purchase public 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. There is no limit on the number of shares or warrants our Sponsor, directors, officers, advisors or their affiliates
may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, they have no current commitments,
plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. If they
engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material nonpublic
information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. In the event that
our Sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders
who have already elected to exercise their redemption rights or submitted a proxy to vote against our initial business combination, such
selling stockholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial
business combination. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender
offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however,
if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply
with such rules. We expect that 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. None of the funds held in the trust account will be used to purchase
public shares or public warrants in such transactions prior to completion of our initial business combination.
The
purpose of any such purchases of shares could be to vote such shares in favor of the initial business combination and thereby increase
the likelihood of obtaining stockholder approval of the initial 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 warrantholders for approval in connection
with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination
that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our shares of Class
A common stock or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult
to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Limitation
on Redemption upon Completion of our Initial Business Combination if we Seek Stockholder Approval
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 amended and restated 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 seeking redemption rights with respect to more than an aggregate
of 15% of the shares sold in the initial public offering, which we refer to as the “Excess Shares,” without our prior consent.
Such restriction will also be applicable to our affiliates. We believe this restriction will discourage stockholders from accumulating
large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed
initial business combination as a means to force us or our management to purchase their shares at a significant premium to the then-current
market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the
shares sold in the initial public offering could threaten to exercise its redemption rights if such holder’s shares are not purchased
by us or our management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’
ability to redeem no more than 15% of the shares sold in the initial public offering without our prior consent, we believe we will limit
the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination,
particularly in connection with an initial business combination with a target that requires as a closing condition that we have a minimum
net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares
(including Excess Shares) for or against our initial business combination.
Redemption
of Public Shares and Liquidation if no Initial Business Combination
Our
amended and restated certificate of incorporation provides that we will have only 24 months from the closing of our initial public offering,
or March 22, 2023, to complete our initial business combination. If we are unable to complete our initial business combination by March
22, 2023, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more
than ten business days thereafter, 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 (which interest shall be net of taxes payable and 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, liquidate and dissolve,
subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable
law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we
fail to complete our initial business combination by March 22, 2023.
Competition
In
identifying, evaluating and selecting a target business for our initial business combination, we may encounter competition from other
entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout
funds, and operating businesses seeking strategic business combinations. 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
similar or greater financial, technical, human and other resources than we do. 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 initial business combination
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 two officers, Marshall Kiev and David Boris, our Co-Chief 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 initial 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.
Periodic
Reporting and Financial Information
We
are required to file Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q with the SEC on a regular basis, and are required
to disclose certain material events in a Current Report on Form 8-K. The SEC maintains an Internet website that contains reports, proxy
and information statements and other information regarding issuers that file electronically with the SEC. The SEC’s Internet website
is located at www.sec.gov. In addition, the Company will provide copies of these documents without charge upon request from us in writing
at 1615 South Congress Avenue, Suite 103, Delray Beach, Florida or by telephone at (212) 739-7860.
We
will provide stockholders with audited financial statements of the prospective target business as part of the proxy solicitation materials
or tender offer documents 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, or reconciled to, accounting principles generally accepted in the United States of America
(“GAAP”), or international financial reporting standards as issued by the International Accounting Standards Board (“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) (“PCAOB”). These financial statement requirements may limit
the pool of potential targets we may conduct an initial business combination with because some targets may be unable to provide such
statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination
within the prescribed time frame. We cannot assure you that any particular target business identified by us as a potential business combination
candidate will have financial statements prepared in accordance with the requirements outlined above or that the potential target business
will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements
cannot be met, we may not be able to acquire the proposed target business.
We
will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2022 as required by the Sarbanes-Oxley
Act of 2002 (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 have our internal control procedures audited. A target
company 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 business combination.
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 the 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 common stock that are held by non-affiliates
exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt
during the prior three-year period.
Additionally,
we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take
advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held
by non-affiliates equals or exceeds $250 million as of the end of that year’s second fiscal quarter, and (2) our annual revenues
equaled or exceeded $100 million during such completed fiscal year or the market value of our common stock held by non-affiliates equals
or exceeds $700 million as of the end of that year’s second fiscal quarter.
Item
1A. Risk Factors.
An
investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together
with the other information contained in this Form 10-K, before making a decision to invest in our units. If any of the following events
occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price
of our securities could decline, and you could lose all or part of your investment.
Risk
Factor Summary
| ● | We
are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve
our business objective. |
| ● | 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. |
| ● | 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. |
| ● | If
we seek stockholder approval of our initial business combination, our initial stockholders and management team have agreed to vote in
favor of such initial business combination, regardless of how our public stockholders vote. |
| ● | The
ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business
combination targets, which may make it difficult for us to enter into an initial business combination with a target. |
| ● | 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 or optimize our capital structure. |
| ● | The
requirement that we complete our initial business combination by March 22, 2023 may give potential target businesses leverage over us
in negotiating an initial 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. |
| ● | Our
search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially
adversely affected by the recent coronavirus (COVID-19) outbreak and the status of debt and equity markets. |
| ● | We
may not be able to complete our initial business combination by March 22, 2023, 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 receive only
$10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless. |
| ● | If
we seek stockholder approval of our initial business combination, our Sponsor, directors, officers, advisors and their affiliates may
elect to purchase shares or warrants from public stockholders, which may influence a vote on a proposed initial business combination
and reduce the public “float” of our Class A common stock. |
| ● | 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. |
| ● | You
will not be entitled to protections normally afforded to investors of many other blank check
companies. |
| ● | 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. |
| ● | If
the net proceeds of the initial public offering and the sale of the private placement units
not being held in the trust account are insufficient to allow us to operate for at least
until March 22, 2023, 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. |
| ● | Past
performance by our management team and their affiliates may not be indicative of future performance
of an investment in us. |
| ● | 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. |
| ● | Nasdaq
may delist our securities from trading on its exchange, which could limit investors’
ability to make transactions in our securities and subject us to additional trading restrictions. |
| ● | 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 seek acquisition opportunities with an early stage 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, intense competition and difficulties in obtaining and retaining
key personnel. |
|
● |
Our
key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business
combination, and a particular business combination may be conditioned on the retention or resignation of such key personnel. These
agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them
to have conflicts of interest in determining whether a particular business combination is the most advantageous.
|
|
|
|
|
● |
Our 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. |
|
|
|
|
● |
Certain of our officers and directors are now, and all
of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted
by us and, accordingly, may have conflicts of interest in allocating their time and determining to which entity a particular business
opportunity should be presented. |
|
|
|
|
● |
We
may engage in an initial business combination with one or more target businesses that have relationships with entities that may
be affiliated with our Sponsor, officers, directors or existing holders which may raise potential conflicts of interest.
|
|
|
|
|
● |
Since our Sponsor, officers and directors will lose their
entire investment in us if our initial business combination is not completed, a conflict of interest may arise in determining whether
a particular business combination target is appropriate for our initial business combination. |
|
|
|
|
● |
Our warrants are accounted for as liabilities and the
changes in value of our warrants could have a material effect on our financial results. |
|
|
|
|
● |
We have identified a material weakness in our internal
control over financial reporting as of December 31, 2021. If we are unable to develop and maintain an effective system of internal
control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely
affect investor confidence in us and materially and adversely affect our business and operating results |
|
|
|
|
● |
We may face litigation and other risks as a result of
the material weakness in our internal control over financial reporting. |
Risks
Relating to our Search for, Consummation of, or Inability to Consummate, a Business Combination
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 to approve our initial business combination if the initial business combination would not require
stockholder approval under applicable law or stock exchange listing requirement. Except for as required by applicable law or stock exchange
requirement, the decision as to whether we will seek stockholder approval of a proposed initial 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 holders of a majority of our common stock do not approve of the
initial 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 our initial
business combination. Since our board of directors may complete an initial business combination without seeking stockholder approval,
public stockholders may not have the right or opportunity to vote on the initial 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 Sponsor, officers and directors have agreed to vote in favor of
such initial business combination, regardless of how our public stockholders vote.
Pursuant
to the letter agreement, our Sponsor, officers and directors have agreed to vote any founder shares and private placement shares held
by them and any public shares they may acquire during or after the initial public offering (including in open market and privately negotiated
transactions) in favor of our initial business combination. As a result, in addition to our initial stockholders’ founder shares
and the private placement shares issued to the Sponsor, we would need only 12,079,743, or 35.95%, of the 33,601,509 public shares sold
in the initial public offering to be voted in favor of an initial business combination (assuming all outstanding shares are voted and
the private placement shares issued to the underwriters are voted in favor of the transaction) in order to have our initial business
combination approved. Our initial stockholders own shares representing 20% of our outstanding shares of common stock (not including the
shares of Class A common stock underlying the private placement units). Accordingly, if we seek stockholder approval of our initial business
combination, the agreement by our initial stockholders 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 business
combination targets, which may make it difficult for us to enter into an initial business combination with a target.
We
may seek to enter into an initial business combination 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 initial business combination. Furthermore,
in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation
of our initial business combination and after payment of underwriters’ fees and commissions (so that we do not then become subject
to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the
agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause
our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination and after payment of underwriters’
fees and commissions or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such
redemption and the related business combination and may instead search for an alternate business combination. Prospective targets will
be aware of these risks and, thus, may be reluctant to enter into an initial business combination 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 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 are 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. Furthermore, this dilution would increase to the extent that the anti-dilution provision
of the Class B common stock result in the issuance of Class A shares on a greater than one-to-one basis upon conversion of the Class
B common stock at the time of the consummation of our business combination. The above considerations may limit our ability to complete
the most desirable business combination available to us or optimize our capital structure. The amount of the deferred underwriting commissions
payable to the underwriters will not be adjusted for any shares that are redeemed in connection with an initial business combination.
The per-share amount we will distribute to 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 full 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 stock.
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 stock in the open market; however,
at such time our stock 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 stock in the open market.
The
requirement that we complete our initial business combination by March 22, 2023 may give potential target businesses leverage over us
in negotiating an initial 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 an initial business combination will be aware that we must
complete our initial business combination by March 22, 2023. Consequently, such target business may obtain leverage over us in negotiating
an initial 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
timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination
on terms that we would have rejected upon a more comprehensive investigation.
Our
search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially
adversely affected by the recent coronavirus (COVID-19) outbreak and the status of debt and equity markets.
In
December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout
China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the
outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On January 31,
2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S.
healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as
a “pandemic.” The COVID-19 outbreak has and a significant outbreak of other infectious diseases could result in a widespread
health crisis that could adversely affect the economies and financial markets worldwide, and the business of any potential target business
with which we consummate a business combination could be materially and adversely affected. Furthermore, we may be unable to complete
a business combination if continued concerns relating to COVID-19 continues to restrict travel, limit the ability to have meetings with
potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate
a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments,
which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and
the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern
continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with
which we ultimately consummate a business combination, may be materially adversely affected.
In
addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted
by COVID-19 and other events, including as a result of increased market volatility, decreased market liquidity in third-party financing
being unavailable on terms acceptable to us or at all.
Finally,
the outbreak of COVID-19 may also have the effect of heightening many of the other risks described in this “Risk Factors”
section, such as those related to the market for our securities and cross-border transactions.
We
may not be able to complete our initial business combination by March 22, 2023, 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 receive only
$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 the 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 COVID-19 may
negatively impact businesses we may seek to acquire.
If
we have not completed our initial business combination within such time period, we will: (i) cease all operations except for the purpose
of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a
per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest (which interest
shall be net of taxes payable and 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, liquidate and dissolve, subject in each case 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 receive only $10.00 per share, or less than $10.00 per share, on the redemption of their shares, and our warrants will expire worthless.
See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share
redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.
If
we seek stockholder approval of our initial business combination, our Sponsor, directors, officers, advisors and their affiliates may
elect to purchase shares or warrants from public stockholders, which may influence a vote on a proposed initial business combination
and reduce the public “float” 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 Sponsor, directors, officers, advisors or their affiliates may purchase public shares
or public warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the
completion of our initial business combination, although they are under no obligation to do so. However, they have no current commitments,
plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of
the funds in the trust account will be used to purchase public shares or public warrants in such transactions.
In
the event that our Sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from
public stockholders who have already elected to exercise their redemption rights or submitted a proxy to vote against our initial business
combination, such selling stockholders would be required to revoke their prior elections to redeem their shares and any proxy to vote
against our initial business combination. The price per share paid in any such transaction may be different than the amount per share
a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. The purpose
of such purchases could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining
stockholder approval of the initial 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 warrantholders 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. We expect that 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 public 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
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 proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business
combination. Despite our compliance with these rules, if a stockholder fails to receive our proxy materials or tender offer documents,
as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, proxy materials or tender
offer documents, 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 submit public shares for redemption. For
example, we intend to require our public stockholders seeking to exercise their redemption rights, whether they are record holders or
hold their shares in “street name,” to, at the holder’s option, either deliver their stock certificates to our transfer
agent, or to deliver their shares to our transfer agent electronically prior to the date set forth in the proxy materials or tender offer
documents, as applicable. In the case of proxy materials, this date may be up to two business days prior to the date on which the vote
on the proposal to approve the initial business combination is to be held. In addition, if we conduct redemptions in connection with
a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares to also submit a written request
for redemption to our transfer agent two business days prior to the vote in which the name of the beneficial owner of such shares is
included. The redemption rights will also include the requirement that a beneficial holder must identify itself in order to validly redeem
its shares. In the event that a stockholder fails to comply with these or any other procedures disclosed in the proxy or tender offer
materials, as applicable, its shares may not be redeemed.
You
will not be entitled to protections normally afforded to investors of many other blank check companies.
Since
the net proceeds of the initial public offering and the sale of the private placement units 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 have net tangible assets in excess of $5,000,000 and have filed a Current Report
on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors
in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among
other things, this means our units 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 the 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 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.
We
expect to encounter 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 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
similar or greater technical, human and other resources or more 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 the initial public offering and the sale of the private placement units, our ability to compete with
respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent
competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, 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 and
completing an 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 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 herein.
If
the net proceeds of the initial public offering and the sale of the private placement units not being held in the trust account are insufficient
to allow us to operate for at least until March 22, 2023, it could limit the amount available to fund our search for a target business
or businesses and complete our initial business combination, and we will depend on loans from our Sponsor or management team to fund
our search and to complete our initial business combination.
Of
the net proceeds of the initial public offering and the sale of the private placement units, only $1,850,000 were available to us initially
outside the trust account to fund our working capital requirements. We believe that the funds available to us outside of the trust account
are sufficient to allow us to operate for at least until March 22, 2023; however, we cannot assure you that our estimate is accurate.
Of the funds available to us, we could 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 or merger agreements 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 initial business
combination, although we do not have any current intention to do so. If we entered into a letter of intent or merger agreement where
we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as
a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect
to, a target business.
If
we are required to seek additional capital, we would need to borrow funds from our Sponsor, management team or other third parties to
operate or may be forced to liquidate. None of 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 $1,200,000 of such working capital loans may be convertible
into private placement-equivalent units at a price of $10.00 per unit at the option of the lender. 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 are unable
to 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. 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 herein.
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, 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 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. The underwriters of the initial public offering will not execute agreements
with us waiving such claims to the monies held in the trust account. 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 are unable to complete 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.
Pursuant to the letter agreement, the form of which is filed as an exhibit to the registration statement of which the initial public
offering prospectus forms a part, 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 a prospective target business with which we have entered into a written letter of intent,
confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the
lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation
of the trust account, if less than $10.00 per public share due to reductions in the value of the trust assets, less taxes payable, provided
that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all
rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our
indemnity of the underwriters of the initial public offering against certain liabilities, including liabilities under the Securities
Act. However, we have not asked our Sponsor to reserve for such indemnification obligations, nor have we independently verified whether
our Sponsor has sufficient funds to satisfy its indemnity obligations and believe that our Sponsor’s only assets are securities
of our company. Therefore, we cannot assure you that 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 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
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 and (ii) the actual
amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per public
share due to reductions in the value of the trust assets, less taxes payable, and our Sponsor asserts that it is unable to satisfy its
indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would
determine whether to take legal action against our Sponsor to enforce its indemnification obligations. While we currently expect that
our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us,
it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose
not to do so in any particular instance 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.
If,
after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board
of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors
and us to claims of punitive damages.
If,
after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor
and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy
court could seek to recover some or all amounts received by our 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.
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.
If,
before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our
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 petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy
law, and may be included in our bankruptcy 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.
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:
| ● | restrictions
on the nature of our investments; and |
| ● | restrictions
on the issuance of securities, each of which may make it difficult for us to complete our initial business combination. |
In
addition, we may have imposed upon us burdensome requirements, including:
| ● | registration
as an investment company with the SEC; |
| ● | adoption
of a specific form of corporate structure; and |
| ● | reporting,
record keeping, voting, proxy and disclosure requirements and compliance other rules and regulations that we are currently not subject
to. |
In
order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must
ensure that we are engaged primarily in a business other than investing, reinvesting or trading in 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 an initial 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 initial public offering is not intended for persons who are seeking a return on
investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the
earliest to occur of: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly submitted
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 redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the
closing of the initial public offering or (B) with respect to any other material provisions relating to stockholders’ rights or
pre-initial business combination activity; or (iii) absent an initial business combination within 24 months from the closing of the initial
public offering, our return of the funds held in the trust account to our public stockholders as part of our redemption of the public
shares. 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 an initial business combination or may result in our liquidation.
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 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 herein.
Changes
in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability
to negotiate and complete our initial business combination and results of operations.
We
are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply
with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult,
time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and
those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to
comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including
our ability to negotiate and complete our initial business combination and results of operations.
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 Delaware General Corporation Law (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 by
March 22, 2023 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 the initial public offering 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 by March 22, 2023 is not considered a liquidating distribution under Delaware law and such redemption
distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other
circumstances that are currently unknown), 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 Nasdaq corporate governance requirements, we are not required to hold an annual meeting until one year after our first
fiscal year end following our listing on Nasdaq. 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 industry or geographic region, 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 or warrantholders who choose to remain stockholders
or warrantholders following our initial business combination could suffer a reduction in the value of their securities. Such stockholders
or warrantholders are unlikely to have a remedy for such reduction in value.
We
may seek business combination opportunities in industries or sectors which may be outside of our management’s areas of expertise.
We
will consider an initial business combination outside of our management’s areas of expertise if an initial business combination
candidate is presented to us and we determine that such candidate offers an attractive business combination opportunity for our company
or we are unable to identify a suitable candidate in these areas of expertise after having expanded a reasonable amount of time and effort
in an attempt to do so. 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 of the significant risk factors. We also cannot assure you that
an investment in our units will not ultimately prove to be less favorable to investors in the initial public offering than a direct investment,
if an opportunity were available, in an initial business combination candidate.
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 legal 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 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 herein.
We
are not required to obtain an opinion from an independent investment banking firm or from an independent accounting 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 company from a financial
point of view.
Unless
we complete our initial business combination with an affiliated entity or our board cannot independently determine the fair market value
of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm that is a
member of FINRA or from an independent valuation or appraisal firm that the price we are paying is fair to our company 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.
The
warrants may become exercisable and redeemable for a security other than the shares of 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 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 commercially reasonable efforts to register the issuance of the
security underlying the warrants within fifteen business days of the closing of an initial business combination.
We
may issue additional 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 anti-dilution provisions
contained in our amended and restated certificate of incorporation. Any such issuances would dilute the interest of our stockholders
and likely present other risks.
Our
amended and restated certificate of incorporation authorizes the issuance of up to 100,000,000 shares of Class A common stock, par value
$0.0001 per share, 10,000,000 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. After the initial public offering, there were 56,745,576 and 1,599,623 authorized but unissued shares of Class
A common stock and Class B common stock, respectively, available for issuance, which amount takes into account the shares of Class A
common stock reserved for issuance upon exercise of outstanding warrants but not the shares of Class A common stock issuable upon conversion
of Class B common stock. Immediately after the consummation of the initial public offering, there were 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 Class A common stock or shares of 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 in connection with the redemption of our warrants or shares of Class A common stock 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 anti-dilution provisions
as set forth therein. However, our amended and restated certificate of incorporation provides, among other things, that prior to our
initial business combination, we may not issue additional shares that would entitle the holders thereof to (i) receive funds from the
trust account or (ii) vote as a class with our public shares (a) on any initial business combination or (b) to approve an amendment to
our amended and restated certificate of incorporation to (x) extend the time we have to consummate a business combination beyond 24 months
from the closing of the initial public offering or (y) amend the foregoing provisions. These provisions of our amended and restated certificate
of incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with a stockholder vote.
The
issuance of additional shares of common or preferred stock:
| ● | may
significantly dilute the equity interest of investors in the 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; |
| ● | may
subordinate the rights of holders of our common stock if preferred stock is issued with rights
senior to those afforded our common stock; |
| ● | 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; |
| ● | 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; and |
| ● | may
adversely affect prevailing market prices for our units, Class A common stock and/or warrants. |
Resources
could be wasted in researching business combinations 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, consultants 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 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 herein.
As
the number of special purpose acquisition companies evaluating targets increases, attractive targets may become scarcer and there may
be more competition for attractive targets. This could increase the cost of our initial business combination and could even result in
our inability to find a target or to consummate an initial business combination.
Recently,
the number of special purpose acquisition companies that have been formed has increased substantially. Many potential targets for special
purpose acquisition companies have already entered into an initial business combination, and there are still many special purpose acquisition
companies preparing for an initial public offering, as well as many such companies currently in registration. As a result, at times,
fewer attractive targets may be available to consummate an initial business combination. In addition, because there are more special
purpose acquisition companies seeking to enter into an initial business combination with available targets, the competition for available
targets with attractive fundamentals or business models may increase, which could cause targets companies to demand improved financial
terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions,
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.
We
may engage in an initial business combination with one or more target businesses that have relationships with entities that may be affiliated
with our Sponsor, officers, directors or existing holders which may raise potential conflicts of interest.
In
light of the involvement of our Sponsor, officers and directors with other entities, we may decide to acquire one or more businesses
affiliated with our Sponsor, officers or directors. Our directors also serve as officers and board members for other entities, including,
without limitation, those described under the section of the initial public offering prospectus entitled “Management — Conflicts
of Interest.” In addition, our Sponsor and our officers and directors may sponsor or form other special purpose acquisition companies
similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination.
Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination.
However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.
Such entities may compete with us for business combination opportunities. Our Sponsor, officers and directors are not currently aware
of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and
there have been no preliminary discussions concerning an initial business combination with any such entity or entities. Although we will
not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we
determined that such affiliated entity met our criteria and guidelines for an initial business combination as set forth in the section
of the initial public offering prospectus entitled “Proposed Business — Selection of a Target Business and Structuring of
our Initial Business Combination” and such transaction was approved by a majority of our disinterested directors. Despite our agreement
to obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an independent valuation or appraisal
firm, regarding the fairness to our stockholders from a financial point of view of an initial business combination with one or more domestic
or international businesses affiliated with our Sponsor, officers or directors, potential conflicts of interest still may exist and,
as a result, the terms of the initial business combination may not be as advantageous to our public stockholders as they would be absent
any conflicts of interest.
Since
our Sponsor, officers and directors will lose their entire investment in us if our initial business combination is not completed, a conflict
of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
On
January 28, 2021, our Sponsor purchased an aggregate of 8,625,000 founder shares for an aggregate purchase price of $25,000, or approximately
$0.003 per share. As a result of the underwriters’ election to partially exercise their over-allotment option on March 30, 2021,
a total of 224,623 founder shares were forfeited and 900,377 founder shares are no longer subject to forfeiture, resulting in an aggregate
of 8,400,377 founder shares issued and outstanding. Prior to the initial investment in the company of $25,000 by the Sponsor, the company
had no assets, tangible or intangible. The purchase price of the founder shares was determined by dividing the amount of cash contributed
to the company by the number of founder shares issued. The founder shares will be worthless if we do not complete an initial business
combination. In addition, our Sponsor and Jefferies LLC purchased an aggregate of 1,002,030 units at a price of $10.00 per unit, consisting
of 834,022 units by our Sponsor and 168,008 units by the Jefferies LLC for an aggregate purchase price of $10,020,300, or $10.00 per
unit, that will also worthless if we do not complete an initial business combination. Our Sponsor, officers and directors have agreed
(A) to vote any shares owned by them in favor of any proposed initial business combination and (B) not to redeem any founder shares or
private placement shares held by them in connection with a stockholder vote to approve a proposed initial business combination or in
connection with a tender offer. In addition, we may obtain loans from our Sponsor, affiliates of our Sponsor or an officer or director.
The personal and financial interests of our 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 the initial public offering nears,
which is the deadline for our completion of an initial business combination.
We
may issue notes or other debt securities, or otherwise incur substantial debt, to complete an initial 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 as of the date of this Annual Report on Form 10-K to issue any notes or other debt securities, or to otherwise
incur outstanding debt following the 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:
| ● | default
and foreclosure on our assets if our operating revenues after an initial business combination
are insufficient to repay our debt obligations; |
| ● | acceleration
of our obligations to repay the indebtedness even if we make all principal and interest payments
when due if we breach certain covenants that require the maintenance of certain financial
ratios or reserves without a waiver or renegotiation of that covenant; |
| ● | our
immediate payment of all principal and accrued interest, if any, if the debt is payable on
demand; |
| ● | our
inability to obtain necessary additional financing if the debt contains covenants restricting
our ability to obtain such financing while the debt is outstanding; |
| ● | our
inability to pay dividends on our common stock; |
| ● | 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; |
| ● | limitations
on our flexibility in planning for and reacting to changes in our business and in the industry
in which we operate; |
| ● | increased
vulnerability to adverse changes in general economic, industry and competitive conditions
and adverse changes in government regulation; |
| ● | limitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions,
debt service requirements, and execution of our strategy; |
| ● | and
other purposes and other disadvantages compared to our competitors who have less debt. |
We
may only be able to complete one business combination with the proceeds of the initial public offering and the sale of the private placement
units, which will cause us to be solely dependent on a single business which may have a limited number of services and limited operating
activities. This lack of diversification may negatively impact our operating results and profitability.
Of
the net proceeds from the initial public offering and the sale of the private placement units, $336,015,090 are available to complete
our initial business combination and pay related fees and expenses (which includes 11,760,528 for the payment of deferred underwriting
commissions).
We
may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within
a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business
because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma
financial statements with the SEC that present operating results and the financial condition of several target businesses as if they
had been operated on a combined basis. By completing our initial business combination with only a single entity, our lack of diversification
may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations
or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete
several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success
may be:
| ● | solely
dependent upon the performance of a single business, property or asset, or |
| ● | dependent
upon the development or market acceptance of a single or limited number of products, processes
or services. |
This
lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial
adverse impact upon the particular industry in which we may operate subsequent to our 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 attempt to complete our initial business combination with a private company about which little information is available, which may
result in an initial business combination with a company that is not as profitable as we suspected, if at all.
In
pursuing our initial business combination strategy, we may seek to effectuate our initial business combination with a privately held
company. Very little public information generally exists about private companies, and we could be required to make our decision on whether
to pursue a potential initial business combination on the basis of limited information, which may result in an initial business combination
with a company that is not as profitable as we suspected, if at all.
We
may seek acquisition opportunities with an early stage company, a financially unstable business or an entity lacking an established record
of revenue or earnings, which could subject us to volatile revenues or earnings, intense competition and difficulties in obtaining and
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 sales or earnings, we may be affected by numerous risks inherent in the operations of the business with which
we combine. These risks include investing in a business without a proven business model and with limited historical financial data, volatile
revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel. Although our officers and directors
will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all
of the significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be
outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target
business.
We
do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete
an initial business combination with which a substantial majority of our stockholders do not agree.
Our
amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except that in no event
will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of
our initial business combination and after payment of underwriters’ fees and commissions (so that we do not then become subject
to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the
agreement relating to our initial business combination. As a result, we may be able to complete our initial business combination even
though a substantial majority of our public stockholders or warrantholders 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
initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares
to our Sponsor, officers, directors, advisors or 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 initial business combination exceed the aggregate amount of cash available to us, we will not complete
the initial 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 effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their
charters and other governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our
amended and restated certificate of incorporation or governing instruments in a manner that will make it easier for us to complete our
initial business combination that our stockholders or warrantholders may not support.
In
order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their
charters and modified governing instruments, including their warrant agreements. For example, blank check companies have amended the
definition of business combination, increased redemption thresholds and 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.
Amending our amended and restated certificate of incorporation to extend the time we have to consummate a business combination beyond
24 months from the closing of the initial public offering requires the approval of holders of a majority of our common stock entitled
to vote thereon and amending other such provisions of our amended and restated certificate of incorporation requires the approval of
holders of at least 65% of our common stock, and amending our warrant agreement will require a vote of holders of at least 50% of the
public warrants and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant
agreement with respect to the private placement warrants, 50% of the number of the then outstanding private placement warrants. In addition,
our amended and restated certificate of incorporation requires us to provide our public stockholders with the opportunity to redeem their
public shares for cash if we propose an amendment to our amended and restated certificate of incorporation (A) to modify the substance
or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months
from the closing of the initial public offering or (B) with respect to any other material provisions relating to stockholders’
rights or pre-initial business combination activity. To the extent any such amendments would be deemed to fundamentally change the nature
of any securities offered through this registration statement, we would register, or seek an exemption from registration for, the affected
securities. We cannot assure you that we will not seek to amend our charter or governing instruments or extend the time to consummate
an initial business combination in order to effectuate our initial business combination.
We
may amend our amended and restated certificate of incorporation to extend the time we have to consummate our initial business combination
beyond 24 months from the closing of the initial public offering if such amendment is approved by a majority of the then outstanding
shares of common stock present and entitled to vote at the meeting to approve such amendment when a quorum is present. Our amended and
restated certificate of incorporation also provides that any of its other provisions related to pre-initial business combination activity
(and the corresponding provisions of the agreement governing the release of funds from our trust account), including an amendment to
permit us to withdraw funds from the trust account such that the per share amount investors will receive upon any redemption or liquidation
is substantially reduced or eliminated, may be amended with the approval of holders of at least 65% of our common stock, which are lower
amendment thresholds than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated
certificate of incorporation and the trust agreement to facilitate the completion of an initial business combination that some of our
stockholders may not support.
Our
amended and restated certificate of incorporation provides that we may amend our amended and restated certificate of incorporation to
extend the time we have to consummate our initial business combination beyond 24 months from the closing of the initial public offering
if such amendment is approved by a majority of the then outstanding shares of common stock present and entitled to vote at the meeting
to approve such amendment when a quorum is present. Our amended and restated certificate of incorporation also provides that any of its
other provisions related to pre-initial business combination activity (including the requirement to deposit proceeds of the initial public
offering and the sale of the private placement units into the trust account and not release such amounts except in specified circumstances,
and to provide redemption rights to public stockholders as described herein and including to permit us to withdraw funds from the trust
account such that the per share amount investors will receive upon any redemption or liquidation is substantially reduced or eliminated)
may be amended if approved by holders of at least 65% of our common stock entitled to vote thereon, and the 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 common stock entitled to vote thereon, subject to applicable provisions of the DGCL or applicable
stock exchange rules. We may not issue additional shares that would entitle the holders thereof to (i) receive funds from the trust account
or (ii) vote as a class with our public shares (a) on any initial business combination or (b) to approve an amendment to our amended
and restated certificate of incorporation to (x) extend the time we have to consummate a business combination beyond 24 months from the
closing of the initial public offering or (y) amend the foregoing provisions. Our initial stockholders, who will collectively beneficially
own 20% of our common stock upon the closing of the initial public offering (not including the shares of Class A common stock underlying
the private placement units and assuming they do not purchase any units in the initial public offering), may 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-initial business combination behavior more easily than some other blank check companies, and this may increase our ability to
complete an initial 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, 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 (i) to modify the substance or timing of our obligation to redeem 100% of our public
shares if we do not complete our initial business combination within 24 months from the closing of the initial public offering or (ii)
with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, unless
we provide our public stockholders with the opportunity to redeem their shares of 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 (which
interest will be net of taxes payable) divided by the number of then outstanding public shares. These agreements are contained in a letter
agreement that we have entered into with our Sponsor, officers and directors. 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, 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.
Certain
agreements related to the initial public offering may be amended without stockholder approval.
Each
of the agreements related to the initial public offering to which we are a party, other than the warrant agreement and the investment
management trust agreement, may be amended without stockholder approval. Such agreements are: the underwriting agreement; the letter
agreement among us and our initial stockholders, Sponsor, officers and directors; the registration rights agreement among us, our initial
stockholders and the underwriters; the private placement units purchase agreements among us, our Sponsor and Jefferies LLC; and the administrative
services agreement among us and an affiliate of our Sponsor. These agreements contain various provisions that our public stockholders
might deem to be material. For example, our letter agreement and the underwriting agreement contain certain lock-up provisions with respect
to the founder shares, private placement warrants and other securities held by our Sponsor, officers and directors. Amendments to such
agreements would require the consent of the applicable parties thereto and would need to be approved by our board of directors, which
may do so for a variety of reasons, including to facilitate our initial business combination. While we do not expect our board of directors
to approve any amendment to any of these agreements prior to our initial business combination, it may be possible that our board of directors,
in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to any such agreement.
Any amendment entered into in connection with the consummation of our initial business combination will be disclosed in our proxy solicitation
or tender offer materials, as applicable, related to such initial business combination, and any other material amendment to any of our
material agreements will be disclosed in a filing with the SEC. Any such amendments would not require approval from our stockholders,
may result in the completion of our initial business combination that may not otherwise have been possible, and may have an adverse effect
on the value of an investment in our securities. For example, amendments to the lock-up provision discussed above may result in our initial
stockholders selling their securities earlier than they would otherwise be permitted, which may have an adverse effect on the price of
our securities.
We
may be unable to obtain additional financing to complete our 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.
We
have not selected any specific business combination target, but intend to target businesses larger than we could acquire with the net
proceeds of the initial public offering and the sale of the private placement units. As a result, we may be required to seek additional
financing to complete such proposed initial business combination. We cannot assure you that such financing will be available on acceptable
terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete our 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. Further, the amount of additional financing we may be required to obtain could increase as a result of future growth
capital needs for any particular transaction, the depletion of the available net proceeds in search of a target business, the obligation
to repurchase for cash a significant number of shares from stockholders who elect redemption in connection with our initial business
combination and/or the terms of negotiated transactions to purchase shares in connection with our initial business combination. 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 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 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 herein.
Our
initial stockholders may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not
support.
Upon
the closing of the initial public offering, our initial stockholders owned shares representing 21.9% of our issued and outstanding shares
of common stock (including the shares of Class A common stock underlying the private placement units and assuming they do not purchase
any units in the initial public offering). 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 and approval
of major corporate transactions. If our initial stockholders purchase any units in the initial public offering or if our initial stockholders
purchase any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their
control. 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 initial stockholders, is and will
be divided into two classes, each of which will generally serve for a term of two 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 initial 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. 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.
Unlike
most blank check companies, if (i) we issue additional shares of common stock 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, (ii) the aggregate
gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding
of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (iii)
the Market Value is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent)to be equal
to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price will be adjusted
(to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption
trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price. This may
make it more difficult for us to consummate an initial business combination with a target business.
Because
we must furnish our 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 an initial business combination include historical and 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, GAAP, or IFRS, depending on the circumstances and the historical financial statements may be required to be
audited in accordance with the standards of the 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 statements
in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.
Exchange
rate fluctuations and currency policies may cause a target business’s ability to succeed in the international markets to be diminished.
In
the event we acquire a non-U.S. target, all revenues and income would likely be received in a foreign currency, and the dollar equivalent
of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency. The value
of the currencies in our target regions fluctuate and are affected by, among other things, changes in political and economic conditions.
Any change in the relative value of such currency against our reporting currency may affect the attractiveness of any target business
or, following consummation of our initial business combination, our financial condition and results of operations. Additionally, if a
currency appreciates in value against the dollar prior to the consummation of our initial business combination, the cost of a target
business as measured in dollars will increase, which may make it less likely that we are able to consummate such transaction.
After
our initial business combination, our results of operations and prospects could be subject, to a significant extent, to the economic,
political, social and government policies, developments and conditions in the country in which we operate.
The
economic, political and social conditions, as well as government policies, of the country in which our operations are located could affect
our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such growth may not be
sustained in the future. If in the future such country’s economy experiences a downturn or grows at a slower rate than expected,
there may be less demand for spending in certain industries. A decrease in demand for spending in certain industries could materially
and adversely affect our ability to find an attractive target business with which to consummate our initial business combination and
if we effect our initial business combination, the ability of that target business to become profitable.
Compliance
obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial
financial and management resources, and increase the time and costs of completing an initial business combination.
Section
404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report
on Form 10-K for the year ending December 31, 2022. Only in the event we are deemed to be a large accelerated filer or an accelerated
filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting
firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance
with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target
company 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 business combination.
Risks
Relating to the Post Business Combination Company
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 our stock price,
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 debt financing to partially finance the initial business combination or thereafter. Accordingly, any stockholders or
warrantholders who choose to remain stockholders or warrantholders following the initial business combination could suffer a reduction
in the value of their securities. Such stockholders or warrantholders are unlikely to have a remedy for such reduction in value.
Our
management may not be able to maintain control of a target business after our initial business combination.
We
may structure an initial business combination so that the post-transaction company in which our public stockholders own shares will own
less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if the post-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 us not to be required to register as an investment company under the Investment Company Act. We
will not consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting
securities of the target, our stockholders prior to the initial business combination may collectively own a minority interest in the
post business combination company, depending on valuations ascribed to the target and us in the initial business combination. For example,
we could pursue a transaction in which we issue a substantial number of new shares of Class A common stock in exchange for all of the
outstanding capital stock of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance
of a substantial number of new 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
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 have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial business
combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
When
evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess
the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the
capabilities of the target business’s management, therefore, may prove to be incorrect and such management may lack the
skills, qualifications or abilities we suspected. Should the target business’s management not possess the skills,
qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business
may be negatively impacted. Accordingly, any stockholders or warrantholders who choose to remain stockholders or warrantholders
following the initial business combination could suffer a reduction in the value of their securities. Such stockholders or
warrantholders 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.
Risks
Relating to Acquiring and Operating a Business in Foreign Countries
If
we effect our initial business combination with a company with operations or opportunities outside of the United States, we would be
subject to a variety of additional risks that may negatively impact our operations.
If
we effect our initial business combination with a company with operations or opportunities outside of the United States, we would be
subject to any special considerations or risks associated with companies operating in an international setting, including any of the
following:
| ● | higher
costs and difficulties inherent in managing cross-border business operations and complying
with different commercial and legal requirements of overseas markets; |
| ● | rules
and regulations regarding currency redemption; |
| ● | complex
corporate withholding taxes on individuals; |
| ● | laws
governing the manner in which future business combinations may be effected; |
| ● | tariffs
and trade barriers; |
| ● | regulations
related to customs and import/export matters; |
| ● | longer
payment cycles and challenges in collecting accounts receivable; |
| ● | tax
issues, including but not limited to tax law changes and variations in tax laws as compared
to the United States; |
| ● | currency
fluctuations and exchange controls; |
| ● | cultural
and language differences; |
| ● | crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters
and wars, including the conflict in Ukraine and the surrounding region; |
| ● | deterioration
of political relations with the United States; and |
| ● | government
appropriations of assets. |
We
may not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer, which may adversely
impact our results of operations and financial condition.
After
our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue
will be derived from our operations in such country. Accordingly, our results of operations and prospects will be subject, to a significant
extent, to the economic, political and legal policies, developments and conditions in the country in which we operate.
The economic, political and social conditions,
as well as government policies, of the country in which our operations are located could affect our business. Economic growth could be
uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future. If in the future
such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in
certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find
an attractive target business with which to consummate our initial business combination and if we effect our initial business combination,
the ability of that target business to become profitable.
We are currently operating in a period of
economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing
military conflict between Russia and Ukraine. Our business, financial condition and results of operations may be materially and adversely
affected by any negative impact on the global economy and capital markets resulting from the conflict in Ukraine or any other geopolitical
tensions.
Russian military actions and the resulting
sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets,
potentially making it more difficult for us to obtain additional funds.
Any of the above mentioned factors could
affect our business, prospects, financial condition, and operating results. The extent and duration of the military action, sanctions
and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions may also magnify the impact
of other risks described in this Form 10-K.
Risks
Relating to Our Sponsor and Management Team
We
are dependent upon our executive officers and directors and their departure could adversely affect our ability to operate.
Our
operations are dependent upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe
that our success depends on the continued service of our directors and officers, at least until we have completed our initial business
combination. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or officers. The
unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.
Our
ability to successfully effect our initial business combination and to be successful thereafter will be dependent upon the efforts of
our key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively impact
the operations and profitability of our post-combination business.
Our
ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key
personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target
business in senior management or advisory positions following our initial business combination, it is likely that some or all of the
management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial
business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be
unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources
helping them become familiar with such requirements. In addition, the officers and directors of an initial business combination candidate
may resign upon completion of our initial business combination. The departure of an initial business combination target’s key personnel
could negatively impact the operations and profitability of our post-combination business. The role of an initial business combination
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 initial business combination candidate’s management team will remain associated with
the initial business combination candidate following our initial business combination, it is possible that members of the management
of an initial business combination candidate will not wish to remain in place. The loss of key personnel could negatively impact the
operations and profitability of our post-combination business.
Our
key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination,
and a particular business combination may be conditioned on the retention or resignation of such key personnel. These agreements may
provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts
of interest in determining whether a particular business combination is the most advantageous.
Our
key personnel may be able to remain with 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 initial business combination. Such negotiations would take place
simultaneously with the negotiation of the initial 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 initial business
combination. Such negotiations also could make such key personnel’s retention or resignation a condition to any such agreement.
The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business,
subject to their fiduciary duties under Delaware law.
Our
officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to
how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial
business combination.
Our
officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest
in allocating their time between our operations and our search for an initial business combination and their other businesses. We do
not intend to have any full-time employees prior to the completion of our initial business combination. Each of our officers is engaged
in other business endeavors for which he may be entitled to substantial compensation, and our officers are not obligated to contribute
any specific number of hours per week to our affairs. Our independent directors may also serve as officers 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, accordingly, may have conflicts of interest in allocating their time and determining
to which entity a particular business opportunity should be presented.
Following
the completion of the initial public offering and until we consummate our initial business combination, we intend to engage in the business
of identifying and combining with one or more businesses. Our Sponsor and officers and directors are, and may in the future become, affiliated
with entities (such as operating companies or investment vehicles) that are engaged in a similar business.
Our
officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the other
entities to which they owe certain fiduciary or contractual duties. Accordingly, they may have conflicts of interest in determining to
which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential
target business may be presented to another entity prior to its presentation to us. Our amended and restated certificate of incorporation
provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly
offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally
and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer
is permitted to refer that opportunity to us without violating another legal obligation.
In
addition, our Sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours
or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such
companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination. However,
we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.
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 an initial business combination with a target business that is affiliated with our Sponsor,
directors or officers, although we do not intend to do so. 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.
Risks
Relating to our Securities
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 occurrence of each of the following: (i) our
completion of an initial business combination, and then only in connection with those shares of 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 submitted
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 redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the
closing of the initial public offering or (B) with respect to any other material provisions relating to stockholders’ rights or
pre-initial business combination activity and (iii) the redemption of our public shares if we are unable to complete an initial business
combination within 24 months from the closing of the initial public offering, subject to applicable law and as further described herein.
In addition, if we are unable to complete an initial business combination within 24 months from the closing of the initial public offering
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 24
months from the closing of the initial public offering 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
Nasdaq
may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities
and subject us to additional trading restrictions.
Our
units are listed on Nasdaq and the shares of our Class A common stock and warrants are separately listed on Nasdaq. Although we meet,
on a pro forma basis, the minimum initial listing standards set forth in the Nasdaq listing standards, we cannot assure you that our
securities will continue to be listed on Nasdaq in the future or prior to our initial business combination. In order to continue listing
our securities on Nasdaq prior to our initial business combination, we must maintain certain financial, distribution and stock price
levels. Generally, we must maintain a minimum amount in stockholders’ equity (generally $2,500,000) 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 Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing
requirements, in order to continue to maintain the listing of our securities on Nasdaq. For instance, our stock price would generally
be required to be at least $4.00 per share, our stockholders’ equity would generally be required to be at least $5.0 million and
we would be required to have a minimum of 300 round lot holders of our securities. We cannot assure you that we will be able to meet
those initial listing requirements at that time.
If
Nasdaq delists any of our securities from trading on its exchange and we are not able to list our securities on another national securities
exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material
adverse consequences, including:
| ● | a
limited availability of market quotations for our securities; |
| ● | reduced
liquidity for our securities; |
| ● | a
determination that our Class A common stock is a “penny stock” which will require
brokers trading 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; |
| ● | a
limited amount of news and analyst coverage; and |
| ● | a
decreased ability to issue additional securities or obtain additional financing in the future. |
The
National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the
sale of certain securities, which are referred to as “covered securities.” Because we expect that our units and eventually
our Class A common stock and warrants will be listed on Nasdaq, our units, Class A common stock and warrants will qualify as
covered securities under the statute. Although the states are preempted from regulating the sale of our securities, the federal statute
does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then
the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these
powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities
regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of
securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not qualify
as covered securities under the statute and we would be subject to regulation in each state in which we offer our securities.
If
we seek 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 amended and restated 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 seeking redemption rights with respect to more than an
aggregate of 15% of the shares sold in the initial public offering without our prior consent, which we refer to as the “Excess
Shares.” However, we would not be restricting 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.
Members
of our management team and board of directors have significant experience as founders, board members, officers or executives of other
companies. As a result, certain of those persons have been, may be, or may become, involved in proceedings, investigations and litigation
relating to the business affairs of the companies with which they were, are, or may in the future be, affiliated. This may have an adverse
effect on us, which may impede our ability to consummate an initial business combination.
During
the course of their careers, members of our management team and board of directors have had significant experience as founders, board
members, officers or executives of other companies. As a result of their involvement and positions in these companies, certain persons
were, are now, or may in the future become, involved in litigation, investigations or other proceedings relating to the business affairs
of such companies or transactions entered into by such companies. Any such litigation, investigations or other proceedings may divert
our management team’s and board’s attention and resources away from identifying and selecting a target business or businesses
for our initial business combination and may negatively affect our reputation, which may impede our ability to complete an initial business
combination.
Provisions
in our amended and restated 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
amended and restated 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.
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 warrants
could be converted into cash or stock, the exercise period could be shortened and the number of shares of Class A common stock purchasable
upon exercise of a warrant could be decreased, all without your approval.
Our
warrants are issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent,
and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose
of curing any ambiguity or to correct any defective provision or mistake, including to conform the provisions of the warrant agreement
to the description of the terms of the warrants and the warrant agreement set forth in the initial public offering prospectus, provided
that the approval by the holders of at least 50% of the then outstanding public warrants is required to make any change that adversely
affects the interests of the registered holders of the 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 Class A common stock purchasable upon exercise of
a warrant.
Our
warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District of New
York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which
could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.
Our
warrant agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating
in any way to the warrant agreement, including under the Securities Act of 1933, as amended (the “Securities Act”), will
be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York,
and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding
or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
Notwithstanding
the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by
the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive
forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and
to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope the
forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District
Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall
be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in
connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having
service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in
the foreign action as agent for such warrant holder.
This
choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for
disputes with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement
inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs
associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition
and results of operations and result in a diversion of the time and resources of our management and board of directors.
We
may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants of
no value to you.
We
have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of
$0.01 per warrant, provided that the closing price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for adjustments
to the number of shares issuable upon exercise or the exercise price of a warrant for any 20 trading days within a 30-trading day period
ending on the third trading day prior to the date on which we send notice of such 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
warrants as set forth above even if the holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants
could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to
do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the
nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than
the market value of your warrants.
In
addition, we have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their
expiration, at a price of $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that the closing
price of our Class A common stock equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon
exercise or the exercise price of a warrant) for any 20 trading days within a 30-trading day period ending on the third trading day prior
to proper notice of such redemption and provided that certain other conditions are met, including that holders will be able to exercise
their warrants prior to redemption for a number of shares of Class A common stock determined based on the redemption date and the fair
market value of our shares of Class A common stock. The value received upon exercise of the warrants (1) may be less than the value the
holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may
not compensate the holders for the value of the warrants, including because the number of shares of Class A common stock received is
capped at 0.361 shares of Class A common stock per warrant (subject to adjustment) irrespective of the remaining life of the warrants.
None
of the private placement warrants will be redeemable by us (except in limited circumstances) so long as they are held by our Sponsor
or the underwriters or their permitted transferees.
The
grant of registration rights to our initial stockholders and the underwriters 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 an agreement to be entered into concurrently with the issuance and sale of the securities in the initial public offering, our initial
stockholders and the underwriters and their permitted transferees can demand that we register the resale of the private placement units,
the private placement shares, the private placement warrants, the shares of Class A common stock issuable upon conversion of the founder
shares and exercise of the private placement warrants held, or to be held, by them and holders of securities 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 complete. 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 securities owned
by our initial stockholders, the underwriters or holders of working capital loans or their respective permitted transferees are registered
for resale.
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
effectuate our initial business combination.
We
issued warrants to purchase 8,400,377 shares of our Class A common stock as part of the units offered by the initial public offering
prospectus and, simultaneously with the closing of the initial public offering, we issued private placement units, which consist of (i)
an aggregate of 1,002,030 private placement shares and (ii) private placement warrants to purchase an aggregate of 250,507 shares of
Class A common stock at $11.50 per share, subject to adjustments as provided herein. 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 Sponsor or its affiliates,
or any of our officers or directors, makes any working capital loans, up to $1,200,000 of such loans may be converted into private placement-equivalent
units at a price of $10.00 per unit at the option of the lender. Such units would be identical to the private placement units, including
as to exercise price, exercisability and exercise period of the underlying warrants. We may also issue shares of Class A common stock
in connection with our redemption of warrants.
To
the extent we issue shares of Class A common stock to effectuate an initial 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 business combination 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 initial business
combination. Therefore, our warrants and founder shares may make it more difficult to effectuate an initial 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 the initial public offering except that, so long
as they are held by our Sponsor or the underwriters or their permitted transferees, the private placement warrants (i) will not be redeemable
by us (except in limited circumstances), (ii) may not (including the Class A common stock issuable upon exercise of these warrants),
subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days after the completion of our initial
business combination, (iii) may be exercised by the holders on a cashless basis, (iv) will be entitled to registration rights and (v)
for so long as they are held by the underwriters, will not be exercisable more than five years from the effective date of the registration
statement of which the initial public offering prospectus forms a part in accordance with FINRA Rule 5110(g)(8)(A).
Because
each unit contains one-fourth of one warrant and only a whole warrant may be exercised, the units may be worth less than units of other
special purpose acquisition companies.
Each
unit contains one-fourth 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 Class A common stock to be issued
to the warrant holder. This is different from other offerings similar to ours whose units include one share of common stock 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-fourth 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.
General
Risk Factors
Our independent registered public accounting firm's report contains an explanatory paragraph that expresses substantial doubt about our
ability to continue as a “going concern.”
In
connection with the Company's assessment of going concern considerations accordance with Financial Accounting Standard Board's Accounting
Standards Update 2014-15, we have determined that if the Company is unable to complete a business combination by March 22, 2023, then
the Company will cease all operations except for the purpose of liquidating. The date for mandatory liquidation and subsequent dissolution
raise substantial doubt about the Company's ability to continue as a going concern. The financial statements contained elsewhere in this
Form 10-K do not include any adjustments that might result from our inability to continue as a going concern.
Our
warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results.
Included on our balance sheet as of December 31, 2021 are derivative liabilities related to embedded features contained within
our warrants. Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging (“ASC 815”),
provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss
related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair
value measurement, our consolidated financial statements and results of operations may fluctuate quarterly, based on factors, which are
outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our
warrants each reporting period and that the amount of such gains or losses could be material.
We
have identified a material weakness in our internal control over financial reporting as of December 31, 2021. If we are unable to develop
and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial
results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and
operating results.
We
have identified a material weakness in our internal control over financial reporting related to the Company’s accounting and reporting
of complex financial instruments, including application of ASC 480-10-S99-3A to its accounting classification of public shares. As a
result of this material weakness, our management has concluded that our disclosure controls and procedures were not effective as of December
31, 2021. We have taken a number of measures to remediate the material weaknesses described herein. However, if we are unable to remediate
our material weaknesses in a timely manner or we identify additional material weaknesses, we may be unable to provide required financial
information in a timely and reliable manner and we may incorrectly report financial information. Likewise, if our financial statements
are not filed on a timely basis, we could be subject to sanctions or investigations by the stock exchange on which our shares of Class
A common stock are listed, the SEC or other regulatory authorities. The existence of material weaknesses in internal control over financial
reporting could adversely affect our reputation or investor perceptions of us, which could have a negative effect on the trading price
of our shares. We can give no assurance that the measures we have taken and plan to take in the future will remediate the material weakness
identified or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure
to implement and maintain adequate internal control over financial reporting or circumvention of these controls. Even if we are successful
in strengthening our controls and procedures, in the future those controls, and procedures may not be adequate to prevent or identify
irregularities or errors or to facilitate the fair presentation of our financial statements.
A
material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is
a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected
and corrected on a timely basis.
Effective
internal controls are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate
the material weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will
ultimately have the intended effects.
If
we identify any new material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent
or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial
statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic
reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our
share price may decline as a result. We cannot assure you that any measures we may take in the future, will be sufficient to avoid potential
future material weaknesses.
We
may face litigation and other risks as a result of the material weakness in our internal control over financial reporting.
As
a result of the material weakness in our internal control over financial reporting related to the Company’s accounting and reporting
of complex financial instruments, including application of ASC 480-10-S99-3A to its accounting classification of public shares, we face
potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual
claims or other claims arising from the restatement and material weaknesses in our internal control over financial reporting and the
preparation of our financial statements. As of the date of this Annual Report, we have no knowledge of any such litigation or dispute.
However, we can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether
successful or not, could have a material adverse effect on our business, results of operations and financial condition or our ability
to complete an initial business combination.
We
are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve
our business objective.
We
are a blank check company with no operating results, and we will not commence operations until obtaining funding through the initial
public 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. We have no plans, arrangements or understandings with
any prospective target business concerning an initial business combination and may be unable to complete our initial business combination.
If we fail to complete our initial business combination, we will never generate any operating revenues.
Past
performance by our management team and their affiliates may not be indicative of future performance of an investment in us.
Information
regarding performance by, or businesses associated with, our management team or businesses associated with them, including Forum I and
Forum II, is presented for informational purposes only. Past performance of our management team is not a guarantee either (i) that we
will be able to identify a suitable candidate for our initial business combination or (ii) of success with respect to any business combination
we may consummate. You should not rely on the historical record of the performance of our management team or businesses associated with
them, including Forum I and Forum II, as indicative of our future performance of an investment in us or the returns we will, or are likely
to, generate going forward.
Cyber
incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.
We
will 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 ability to consummate an initial business combination.
We
are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of
certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make
our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We
are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage
of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth
companies including, but not limited to, not being required to comply with the auditor internal controls 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 any June 30
before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether
investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less
attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would
be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial
accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective
or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such
extended transition period which means that when a standard is issued or revised and it has different application dates for public or
private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new
or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth
company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of
the potential differences in accounting standards used.
Additionally,
we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take
advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held
by non-affiliates equals or exceeds $250 million as of the end of that year’s second fiscal quarter, and (2) our annual revenues
equaled or exceeded $100 million during such completed fiscal year or the market value of our common stock held by non-affiliates equals
or 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.
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 requires, 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, 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 provides 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.
We
have agreed to use commercially reasonable efforts to file a post-effective amendment to the registration statement of which the initial
public offering prospectus forms a part or a new registration statement with the SEC and to have declared effective a registration statement
covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants, but 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 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 commercially reasonable efforts to file a post-effective amendment to the registration statement of which the initial public
offering prospectus forms a part or a new registration statement with the SEC, 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, and to maintain a current prospectus relating to the Class A common stock issuable upon exercise
of the warrants until the expiration of the warrants in accordance with the provisions of the warrant agreement. 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 Class A common stock issuable upon exercise of the warrants are not registered under the Securities Act, under the
terms of the warrant agreement, holders of warrants who seek to exercise their warrants will not be permitted to do so for cash and,
instead, will be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another exemption.
If holders exercise their warrants on a cashless basis, the number of shares of Class A common stock that you will receive upon
such cashless exercise will be based on a formula subject to a maximum amount of 0.361 shares of Class A common stock per warrant
(subject to adjustment).
In
no event will warrants 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 or qualification is available.
Notwithstanding
the above, if our shares of Class A common stock are at the time of any exercise of a warrant not listed on a national securities
exchange such that they do not satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities
Act, we may, at our option, not permit holders of warrants who seek to exercise their warrants to do so for cash and, instead, require
them to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act; in the event we so elect, we will not
be required to maintain in effect a registration statement or register or qualify the shares underlying the warrants under applicable
state securities laws, and in the event we do not so elect, we will use commercially reasonable efforts to register or qualify the shares
underlying the warrants under applicable state securities laws to the extent an exemption is not available. Exercising the warrants on
a cashless basis could 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 Class A common stock upon a cashless exercise of the warrants
they hold than they would have upon a cash exercise.
In
no event will we be required to net cash settle any warrant, or issue securities (other than upon a cashless exercise as described above)
or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants
under the Securities Act or applicable state securities laws. If the issuance of the shares upon exercise of the warrants is not so registered
or qualified or exempt from registration or qualification, the holder of such warrant 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 the initial public
offering. In such an instance, our initial stockholders and their permitted transferees (which may include our directors and executive
officers) would be able to exercise their warrants and sell the shares of Class A common stock underlying their warrants while holders
of our public warrants would not be able to exercise their warrants and sell the underlying shares of 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.