MACA Moringa Acquisition Corporation

Item 1. Business.

General

We are a blank check company formed on September 24, 2020 as a Cayman Islands exempted company and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this Annual Report as our initial business combination. We have generated no revenues to date and we do not expect that we will generate operating revenues at the earliest until we consummate our initial business combination. We completed our initial public offering in February 2021, and since that time, we have engaged in discussions with, and due diligence with respect to, potential business combination target companies. As described below, since the signing of the Holisto Business Combination Agreement in June 2022, we have been focusing exclusively on pursuing the Holisto Business Combination and related matters.

Recent Developments

Entry into Holisto Business Combination Agreement

On June 9, 2022, we entered into the Holisto Business Combination Agreement. The transactions set forth in the Holisto Business Combination Agreement will constitute a “Business Combination” as contemplated by our amended and restated memorandum and articles of association. Holisto is an Israeli company and a tech-powered online travel agency, which aims to make hotel booking affordable and personalized for consumers. The Holisto Business Combination Agreement and the transactions contemplated thereby have been unanimously approved by the boards of directors of Moringa and Holisto, and by the shareholders of Holisto.

The current terms of the Holisto Business Combination Agreement, as amended by Amendments No. 1 and No. 2 thereto, are described under “Item 1. Business— Holisto Business Combination Agreement” in this Annual Report.

Extension of Date to Consummate a Business Combination and Sponsor Contribution

On January 5, 2023 and in the period thereafter, we filed with the SEC and distributed to our shareholders a definitive proxy statement in which we notified our shareholders that we would be holding the Extension Meeting for the purpose of considering and voting on, among other proposals: (i) a proposal to approve, by way of special resolution, an amendment to our amended and restated memorandum and articles of association to provide for the Extension—i.e., to extend by six months, from February 19, 2023 to August 19, 2023 (or such earlier date as may be determined by our board of directors in its sole discretion), the deadline by which we would need to consummate an initial business combination (the “Articles Extension Proposal”), (ii) a proposal to amend the Investment Management Trust Agreement, dated as of February 19, 2021, to which we are party with Continental Stock Transfer & Trust Company, to extend the term of that agreement for a corresponding period of six months to reflect the Extension under our amended and restated memorandum and articles of association (the “Trust Extension Proposal”), and (iii) a proposal to approve, by way of ordinary resolution of the holders of the Class B ordinary shares, the re-appointment of each of Ilan Levin, Craig Marshak, Ruth Alon, Michael Basch, and Eric Brachfeld as directors serving on our board of directors until the second succeeding annual general meeting of our company and until their successors are elected and qualified (the “Director Election Proposal”). Each such proposal was described in more detail in the definitive proxy statement related to the Extension Meeting, which we filed with the SEC on January 5, 2023, and which is incorporated by reference herein.

On January 26, 2023, we announced that if the Articles Extension Proposal and the Trust Extension Proposal were to be approved at the Extraordinary Meeting and the Extension implemented, our sponsor or its designees would deposit into the trust account as a loan (a “Contribution”, and the sponsor or its designee making such Contribution, a “Contributor”) on February 19, 2023, and on the 19th day of each subsequent calendar month until the Extension Date, or such earlier date on which our board of directors determines to liquidate the Company or an initial business combination is completed, the lesser of (x) $80,000 and (y) $0.04 per public share multiplied by the number of public shares outstanding on such applicable date (each date on which a Contribution is to be deposited into the trust account, a “Contribution Date”). If we consummate an initial business combination or have announced our intention to commence winding up prior to any Contribution Date, the Contributor’s obligation to make Contributions will terminate.

On February 9, 2023, after an adjournment of two days following the originally-designated date for the Extension Meeting, we reconvened the Extension Meeting and our shareholders approved each of the Articles Extension Proposal, Trust Extension Proposal and Director Election Proposal.

Upon approval of the Extension, and based on the sponsor’s commitment to make the Contributions, we issued to the sponsor a non-interest bearing, unsecured promissory note in a principal amount of up to $480,000, representing the maximum potential amount of all Contributions. The note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of our initial business combination, or (b) the date of our liquidation. We have not requested that the sponsor reserve for, nor have we independently verified whether the sponsor will have sufficient funds to satisfy, any Contributions. If a Contributor fails to make a Contribution by an applicable Contribution Date, we will liquidate and dissolve as soon as practicable after such date and in accordance with our amended and restated memorandum and articles of association. If we do not consummate an initial business combination by the Extension Date, the promissory note will be repaid only from funds held outside of the trust account or will be forfeited.

In connection with the Extension Meeting, 8,910,433 Class A Ordinary Shares were redeemed, leaving 3,069,567 Class A Ordinary Shares— of which 2,589,567 are public shares— outstanding. As such, approximately 77.5% of the public shares were redeemed and approximately 22.5% of the public shares remain outstanding. After the satisfaction of such redemptions, the balance in our trust account was approximately $26.4 million (prior to any Contributions by the sponsor).

Amendments to Holisto Business Combination Agreement

On August 17, 2022 and January 1, 2023, we, Holisto and Holisto MergerSub, Inc. entered into Amendments No. 1 and No. 2, respectively, to the Holisto Business Combination Agreement.

Following these amendments, the Holisto Business Combination Agreement contains the following amended terms (which differ from the corresponding terms under the original agreement):

Under Section 7.1 of the Holisto Business Combination Agreement, as amended, either Moringa or Holisto may terminate the Agreement upon written notice to the other party, given that the Holisto Business Combination was not consummated on or prior to January 1, 2023. Amendment No. 2 to the Holisto Business Combination Agreement contemplates that, subject to certain conditions being timely satisfied, including our having obtained the approval of our shareholders to the Extension (which occurred on February 9, 2023), the parties to the Business Combination Agreement will make commercial efforts for the anticipated time of the closing of the Holisto Business Combination to occur by April 1, 2023 (assuming that the Holisto Business Combination Agreement is not terminated earlier). There can be no assurance that the closing of the Holisto Business Combination (if the Holisto Business Combination Agreement is not terminated earlier) will occur by April 1, 2023.

Holisto Registration Statement

On September 7, 2022, Holisto filed with the SEC the Holisto Registration Statement, as required under the Holisto Business Combination Agreement. On December 29, 2022 and February 7, 2023, Holisto filed with the SEC Amendments No. 1 and No. 2, respectively, to the Holisto Registration Statement. For the avoidance of doubt, such registration statement, and the amendments thereto, are not incorporated by reference herein.

Industry Opportunity

Israeli flourishing high-tech market

Having earned the title of “Start-Up Nation,” Israel has been known for quite some time as one of the most concentrated geographic centers for technological innovation. Although it has a population of just in excess of 9 million and had a GDP of approximately $395.1 billion for 2019 (as reported by the World Bank), Israel has been one of the most successful countries in developing technology. Under the OECD R&D Intensity Index (which measures investment in R&D as a ratio of GDP), Israel ranks first in the world, with its national spending on R&D being 4.9% of its GDP (as of 2018), according to the February 2020 publication of the OECD Directorate for Science, Technology and Innovation. According to the 2019 annual report of the Israel Innovation Authority, or IIA, which we refer to as the IIA 2019 annual report, over the last decade, Israel has yielded over 750 startup companies every year.

Israeli entrepreneurs continuously manage to position themselves as global leaders in a variety of fields, repeatedly being able to identify the emergence of new trends and segments early on, maintaining Israel’s position at the forefront of global innovation.

As indicated in the IIA 2019 annual report, there are more companies involved with AI than in any other high-tech sector. Israeli entrepreneurs’ ability to identify the potential in this field at an early stage and enter it quickly has made Israel a world leader in AI. Beyond AI, there has been a significant increase in the number of fintech, cyber and digital health companies, and in the capital raised by foodtech companies. These sectors are at the cutting edge of global innovation, and have been promoted by the Israeli government through various government initiatives.

Attributes of the Israeli high-tech ecosystem that have contributed to its enhanced position include:

Highly innovative - Currently, according to The State of Innovation report as published by PwC and Start-Up Nation Central, there are more than 6,600 start-up companies in Israel - 14 times the concentration of start-ups per capita in Europe. This community of entrepreneurs, from a country with one-tenth of 1% of the world’s population attracts the highest rate of venture capital funding per capita in the world ($674/per capita in 2018).

Educated and skilled workforce - Israel enjoys a very high percentage of engineers and scientists per capita and a very high ratio of university degrees and academic publications per capita. As of 2011, Israel had the highest number of scientists and technicians per capita in the world, with 140 scientists and technicians per 10,000 employees. By comparison, the rate was 85 per 10,000 in the United States and 83 per 10,000 in Japan (Eduard Shteinbuk “R&D and Innovation as a Growth Engine”, National Research University - Higher School of Economics, (published July 2011)). As of 2016, Israel ranked 25^th in the world regarding the publication of scientific and technical articles in the fields of physics, biology, chemistry, mathematics, clinical medicine, biomedical research, engineering and technology, and earth and space sciences in journals classified by the Institute for Scientific Information’s Science Citation Index (SCI) and Social Sciences Citation Index (SSCI). Israel has a high quality educational system and is among the most educated societies in the world, having been ranked 17^th overall in the 2015 Education Index included in the United Nations Development Programme’s Human Development Report issued in 2016.

Government support - The Israeli government founded the Technology Incubator program in the early 1990s. According to the IIA 2019 annual report, today there are over 25 technological and biotechnological incubators across the country, all of which have been privatized. The incubators offer government funding of up to 85% of early stage project costs for two years. They nurture companies from seed to early stage, thus minimizing the risk to the investor. More than 1100 projects have so far graduated from the incubators, with over 45% successfully attracting additional investments from different investors.

Moreover, the IIA provides a variety of support programs with an annual budget of about $400 million. The main program is the R&D Fund, which offers R&D grants of up to 40% of the approved R&D program cost.

Other programs operated by the IIA include bi-national funds (joint R&D programs with foreign counterparts such as China, Canada, USA, etc.), which are entitled to financial assistance of 50% of the Israeli company’s R&D costs.

Investment support - The Israeli Law for the Encouragement of Capital Investments, 5719-1959, or the Investment Law, enables foreign companies operating in Israel to benefit from a reduced company tax rate and investment grants. Another incentive program offered by the government provides employment grants for R&D centers and large enterprises operating in Israel. The program offers a 4-year grant scheme covering on average 25% of the employer’s cost of salaries for each new employee.

Strong VC industry - Israel’s thriving start-up industry is complemented by a flourishing venture capital market. According to a report issued by Deloitte’s Israeli affiliate, Israel’s venture capital industry has approximately 70 active venture capital funds, 14 of which are international with offices in Israel. By far outperforming any other country in venture capital volume per capita, Israel’s venture capital availability is a symbol of the breadth of its innovative industries and of the highly efficient financial sector underpinning them.

Flexible, creative economy - Flexibility and adaptability to change are widely considered primary factors affecting business performance. In fact, the world competitiveness index of IMD (a business school that purports to be a leader and pioneer in corporate leadership development) places this attribute among the leading indexes of economic competitiveness. Creativity and flexibility are the fuel of innovation, and a high degree of responsiveness to changing business environments is crucial to thriving enterprises in today’s dynamic global market. Israel’s ability to swiftly translate market demands into organizational action accounts for its consistently strong performance in the flexibility index and its broad acceptance as a global capital of innovation.

Maturing picture for financing of Israeli high-tech.

The advancements in technology sectors of the Israeli high-tech ecosystem has been matched by advances in its ability to finance those sectors. According to the IIA 2019 annual report, in 2019, the amount of capital raised in Israel for high-tech investments reached a new peak of $9 billion, a 15% increase compared to 2018. Since 2005, capital raised has increased by a factor of 4.5, growing at an average annual rate of approximately 13%. The number of overall funding rounds in 2019 held steady at 1,100 in 2019, similar to 2018.

As cited by the IIA 2019 annual report, data from 2019 indicates that the increase in capital that was raised was mainly due to higher amounts raised in each round, rather than more rounds. We believe that these higher amounts are a testimony to a wider trend that has been identified in the Israeli high-tech industry over the last decade: the scale-up of existing companies replacing the establishment of new start-up companies as the main driver of growth. This trend suggests that the Israeli high-tech industry is moving towards a new level of maturity.

The road to maturation includes an increasing number of growth companies in the Israeli high-tech industry, a development which holds many advantages to the Israeli economy. Fast-developing growth companies have potential to become “complete” companies that employ a large number of employees in a variety of positions other than R&D. Complete companies can significantly increase the number of high productivity employees that characterize the Israeli high-tech sector.

Advantages of SPAC business combination for mature Israeli high-tech companies.

Ensuring that growth companies continue to multiply and flourish is crucial for the Israeli high-tech sector and the Israeli economy. Accordingly, barriers to scale-up have been examined and appropriate solutions have been offered. One obstacle cited by the IIA report, notable in the Israeli industry, is the difficulty for growth companies to obtain debt-based finance, which presents a challenge for the further growth of Israeli growth companies. We believe that the growing pool of Israeli high-tech growth companies that face challenges such as the inability to obtain debt finance would benefit by being given access to the public capital markets.

While a significant number of mature, profitable Israeli technology growth companies would be ideal candidates to go public via the route of an initial public offering, they have yet to do so. That is often due to size barriers that generally restrict such offerings to larger companies. Israeli technology companies that have less than $100 million of annual revenues are often considered too small to be taken public by large, “bulge bracket” US underwriters. Given the growth in the market for special purpose acquisition companies (in terms of number of companies and the amount of funds raised by them) in recent years, we believe that this market can be utilized to meet an unmet need and enable worthwhile, growth Israeli technology companies to scale up.

Acquisition Strategy

Our acquisition strategy is to identify an untapped opportunity within our target Israeli high-tech industry and offer a public-ready business, a facility through which to enter the public sphere, access capital markets and advance its priorities. We are focusing on mid-size Israel-related technology companies that have a proven track record in generating revenues and profits, but that have been too small to be brought public until now. We believe many technology-based companies in Israel could benefit from access to the public markets but have been hesitant or unable to do so due to a number of factors, including the time it takes to conduct a traditional IPO, market volatility and pricing uncertainty. We hope to serve as an attractive partner for those types of companies, enabling them to go public in an alternate, more easily accessible manner- a business combination transaction- and to thereby benefit from the ongoing capital-raising options that are available for a publicly traded company on the U.S. capital markets and leverage public share currency to consolidate and acquire businesses.

Investment Criteria

Consistent with our acquisition strategy, we identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses within the Israeli high-tech industry. We used these criteria in evaluating the prospective Holisto Business Combination; however, no individual criterion was entirely determinative of our decision to pursue the prospective Holisto Business Combination: 

These criteria were not intended to be exhaustive. Our evaluation relating to the merits of a particular initial business combination have been based on these general guidelines as well as other considerations, factors and criteria that our management deems relevant.

In evaluating a prospective target business, we have conducted a thorough due diligence review that has encompassed, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as reviewing financial and other information which was made available to us. We have also utilized our operational and capital allocation experience.

Sourcing of Potential Business Combination Targets

We believe that the operational and transactional experience of our management team and members of our sponsor (and the investors in the sponsor) and the relationships they have developed as a result of such experience, have provided us with a substantial number of potential business combination targets. Our management team and other members of our sponsor have operated and invested in leading Israeli, global technology companies across their corporate life cycles and have developed deep relationships with organizations and investors operating around the world, and in our target region, Israel, in particular. This network has grown through sourcing, acquiring and financing businesses and maintaining relationships with sellers, financing sources and target management teams. Our management team members have significant experience in executing transactions under varying economic and financial market conditions. We believe that these networks of contacts and relationships and this experience help us to identify attractive Israel related technology-based businesses that can benefit from access to the public markets, and execute complex business combination transactions, thereby enhancing shareholder value. In addition, target business candidates may be brought to our attention from various unaffiliated sources, including investment market participants, private equity funds and large business enterprises seeking to divest noncore assets or divisions.

We believe that we are uniquely positioned to leverage our sponsor’s, affiliates’ and management team’s successful track record growing Israeli technology companies into large, successful publicly-traded entities, and their deep network of relationships in Israel, as strong competitive advantages. We believe that we are utilizing our management’s and sponsor’s expertise and their respective proven deal-sourcing capabilities to provide us with a strong pipeline of potential targets.

We believe that our management team’s and directors’ experiences in evaluating assets through investing and company building have enabled us to source the highest quality targets. Our selection process has leveraged the relationships of our management team with industry captains, leading venture capitalists, private equity and hedge fund managers, respected peers, and a network of investment banking executives, attorneys, and accountants. Together with this network of trusted partners, we intend to capitalize the target business and create purposeful strategic initiatives in order to achieve attractive growth and performance targets.

Our management team consists of professionals and senior operating executives of various companies with decades of experience and industry exposure in various Israeli high-tech industries. Based on our management team’s extensive experience and industry exposure, we believe we will be able to identify, evaluate the risk and reward of and execute on attractive acquisition opportunities.

In addition to our experienced management team, the partners of our sponsor have a strong track record in both the technology sector and in Israeli investments in particular, and are characterized by their investment expertise, deep technology company relationships and benevolent activism. One such limited partner is Stanley Hutton Rumbough, a private investor and descendant of Edward Francis Hutton, the founder of EF Hutton. Mr. Rumbough was most recently a founding investor in the Israel based INX platform for digital tokens and trading.

Initial Significant Activities Following Inception

On February 19, 2021 and March 3, 2021, we consummated our initial public offering of 10,000,000 units and 1,500,000 units, respectively (representing the units for the base offering and additional units sold upon the exercise in full by the underwriters of their over-allotment option, respectively). Each unit consists of one Class A ordinary share and one-half of a redeemable warrant of the Company, each warrant entitling the holder thereof to purchase one Class A ordinary share for $11.50 per share. The units were sold at a price of $10.00 per unit, generating gross proceeds to the Company of $100,000,000 and $15,000,000 at the respective closings.

Substantially concurrently with the two closings of the initial public offering, we completed the private sale of 350,000 and 30,000 private units, in the aggregate, respectively, to our sponsor and EarlyBirdCapital at a purchase price of $10.00 per private unit, generating gross proceeds to us of $3,500,000 and $300,000, respectively.

Following the respective closings, a total of $100,000,000 and $15,000,000 were placed in U.S.-based trust accounts at Goldman Sachs & Co. and at JP Morgan Chase, respectively, which are maintained by Continental Stock Transfer & Trust Company acting as trustee.

Our units began trading on February 17, 2021 on the Nasdaq Capital Market, or Nasdaq, under the symbol “MACAU.” On April 7, 2021, the ordinary shares and warrants comprising the units began separate trading on the Nasdaq under the symbols “MACA” and “MACAW,” respectively.

Competitive Strengths

Status as a Public Company

We believe that our structure has made us an attractive business combination partner to target businesses. As an existing public company, we have offered a target business an alternative to a traditional initial public offering through a merger or other business combination. In this situation, the owners of the target business would exchange their shares of stock or other equity interests in the target business for our ordinary shares or for a combination of our ordinary shares and cash, allowing us to tailor the consideration used in the transaction to the specific needs of the sellers. In the alternative, as is the case with the potential Holisto Business Combination, the target company could issue to our shareholders its shares as consideration for acquiring our company and its cash from the trust. We believe that target businesses might find the avenue of a merger with a SPAC a more certain and cost-effective method to becoming a public company than a typical initial public offering. In a typical initial public offering, there are additional expenses incurred in marketing, roadshow and public reporting efforts that will likely not be present to the same extent in connection with a business combination with us.

Furthermore, once the business combination is consummated, the target business will have effectively become a public company, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions that could prevent the offering from occurring. Once public, we believe the target business would then have greater access to capital and an additional means of providing management incentives consistent with shareholders’ interests than it would have as a privately-held company. Public company status can offer further benefits by enhancing a company’s profile among potential new customers and vendors and attracting talented employees.

While we believe that our status as a public company will make us an attractive business partner, some potential target businesses may view the inherent limitations in our status as a blank check company as a deterrent and may prefer to effect a business combination with a more established entity or with a private company. These limitations include constraints on our available financial resources, which may be inferior to those of other entities pursuing the acquisition of similar target businesses; the requirement that we seek shareholder approval of a business combination or conduct a tender offer in relation thereto, which may delay the consummation of a transaction; and the existence of our outstanding warrants, which may represent a source of future dilution.

Financial Position

Immediately following the closing of the IPO, we had $115.0 million, and, upon approval of the Extension, approximately $26.4 million (prior to any Contributions by the sponsor), of funds available in our trust fund, assuming no further redemptions. Of those funds, $4,025,000 will be paid as an advisory fee to EarlyBirdCapital in connection with our initial business combination. Consequently, we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, given the possibility that there may be a further significant percentage of our public shareholders that may elect to redeem their shares in connection with our initial business combination (whether the Holisto Business Combination or any other business combination), thereby further reducing our cash resources, we may need to secure third party financing in order to successfully effect a business combination, and there can be no assurance that it will be available to us.

Effecting a Business Combination

General

We are not presently engaged in, and we will not engage in, any substantive commercial business for an indefinite period of time following our initial public offering. We are utilizing cash derived from the proceeds of our initial public offering and the private placement of units in effecting a business combination (presently, the Holisto Business Combination). Investors in our initial public offering invested without first having an opportunity to evaluate the specific merits or risks of any one or more business combinations. In the case of the Holisto Business Combination, we are seeking to consummate a business combination with a company that is in its relatively early stages of development. As a result of our limited resources, we expect to effect only a single business combination with the proceeds from our initial public offering and concurrent private placement.

Selection of a Target Business and Structuring of a Business Combination

Subject to our management team’s pre-existing fiduciary obligations and the fair market value requirement described below, we have had virtually unrestricted flexibility in identifying and selecting a prospective acquisition candidate. We have not established any specific attributes or criteria (financial or otherwise) for prospective target businesses other than as described under “Investment Criteria” above. Now that we are party to the Holisto Business Combination Agreement, investors will need to evaluate the possible merits or risks of Holisto as a target business with which we may complete the Holisto Business Combination by reviewing the Holisto Registration Statement filed by Holisto with respect to that transaction. Although our management has endeavored to evaluate the risks inherent in the Holisto Business Combination, we cannot assure you that we have properly ascertained or assessed all significant risk factors.

Sources of Target Businesses

As the principal means of identifying potential target businesses, we have relied on the extensive contacts and relationships of our initial shareholders, officers and directors. While our officers and directors are not required to commit any specific amount of time in identifying or performing due diligence on potential target businesses, the relationships that they have developed over their careers and their access to our sponsor’s members’ and affiliates’ contacts and resources have been generating a number of potential business combination opportunities that have been warranting, and may continue to warrant, further investigation. We also have had target business candidates brought to our attention from various unaffiliated sources, including investment bankers, venture capital funds, private equity funds, leveraged buyout funds, management buyout funds and other members of the financial community. Target businesses have been brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources have also introduced us to target businesses they think we may be interested in on an unsolicited basis, since many of these sources have read our public disclosures and know what types of businesses we are targeting.

Our officers and directors must present to us all target business opportunities that have a fair market value of at least 80% of the assets held in the trust account (excluding taxes payable on the income accrued in the trust account) at the time of the agreement to enter into the initial business combination, subject to any pre-existing fiduciary or contractual obligations. We may also engage the services of professional firms or other individuals that specialize in business acquisitions on a formal basis (including EarlyBirdCapital, Inc. as described elsewhere in this Annual Report), to which we may pay a finder’s fee, consulting fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. In no event, however, will our sponsor, initial shareholders, officers, directors or their respective affiliates be paid any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the consummation of an initial business combination (regardless of the type of transaction that it is) other than:

Our audit committee will review and approve all reimbursements and payments made to our sponsor, officers, directors or our or their respective affiliates, with any interested director abstaining from such review and approval. We are not restricted from entering into any such transactions and may do so if (i) such transaction is approved by a majority of our disinterested independent directors and (ii) we obtain an opinion from an independent investment banking firm, or another independent entity that commonly renders valuation opinions, that the business combination is fair to our unaffiliated shareholders from a financial point of view. Holisto is not affiliated with any of our officers, directors or sponsor, and we have therefore not obtained any such opinion in connection with the Holisto Business Combination.

Subject to our management team’s pre-existing fiduciary obligations and the limitations that a target business have a fair market value of at least 80% of the balance in the trust account (excluding taxes payable on the income earned on the trust account) at the time of the execution of a definitive agreement for our initial business combination, as described below in more detail, and that we must acquire a controlling interest in the target business, our management has virtually unrestricted flexibility in identifying and selecting a prospective target business. We have not established any specific attributes or criteria (financial or otherwise) for prospective target businesses, except as described above under “Investment Criteria”.

An evaluation relating to the merits of a particular business combination has been based, to the extent relevant, on such factors, as well as other considerations deemed relevant by our management in effecting a business combination consistent with our business objective. In evaluating a prospective target business, we have conducted an extensive due diligence review which has encompassed, among other things, meetings with incumbent management and inspection of facilities, as well as review of financial and other information which has been made available to us. This due diligence review has been conducted by our management.

Fair Market Value of Target Business

Nasdaq listing rules require that the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (excluding taxes payable on the income earned on the trust account) at the time of the execution of a definitive agreement for our initial business combination. Notwithstanding the foregoing, if we are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% fair market value test.

Our Holisto Business Combination is structured whereby Holisto will acquire, via a reverse triangular merger, 100% of the equity interests of our company and all of the cash in our trust account, while our shareholders will receive, in return, shares in Holisto, and consequently, an indirect interest in the assets of its business. We may, however, structure our initial business combination in an alternate manner, but we will only complete any such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we could acquire a 100% controlling interest in the target; however, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our 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 valued for purposes of the 80% of trust account balance test.

The fair market value of the target will be determined by our board of directors based upon one or more standards generally accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). The proxy solicitation materials or tender offer documents used by us in connection with any proposed transaction (as is the case with the proxy solicitation materials for the Holisto Business Combination) will provide public shareholders with our analysis of the fair market value of the target business, as well as the basis for our determinations. If our board is not able to independently determine that the target business has a sufficient fair market value, we will obtain an opinion from an unaffiliated, independent investment banking firm, or another independent entity that commonly renders valuation opinions, with respect to the satisfaction of such criteria. We will not be required to obtain an opinion from an investment banking firm as to the fair market value if our board of directors independently determines that the target business complies with the 80% threshold. We have not obtained such an opinion in the case of the Holisto Business Combination, given that our board of directors has independently made that determination.

Lack of Business Diversification

We are currently seeking the Holisto Business Combination with just one business— that of Holisto. Therefore, at least initially, the prospects for our success will be entirely dependent upon the future performance of Holisto’s single business operation. Unlike other entities which may have the resources to complete several business combinations of entities operating in multiple industries or multiple areas of a single industry, it is probable that we will not have the resources to diversify our operations or benefit from the possible spreading of risks or offsetting of losses. By consummating a business combination with only a single entity, our lack of diversification may:

Limited Ability to Evaluate the Target Business’ Management

Although we have scrutinized the management of Holisto (and would do likewise with any other potential target business) when evaluating the desirability of effecting a business combination with it, we cannot assure you that our assessment of the target business’ management will prove to be correct. In addition, we cannot assure you that the future management of the combined company will have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of our officers and directors, if any, in Holisto or any other business following a business combination cannot presently be stated with any certainty. While it is possible that some of our key personnel will remain associated in senior management or advisory positions with us following a business combination, it is unlikely that they will devote their full time efforts to our affairs subsequent to a business combination. Moreover, they would only be able to remain with the company after the consummation of a business combination if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for them to receive compensation in the form of cash payments and/or our securities for services they would render to the company after the consummation of the business combination. While the personal and financial interests of our key personnel may influence their motivation in identifying and selecting a target business, their ability to remain with the company after the consummation of a business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. Additionally, our officers and directors do not have significant experience or knowledge relating to the operations of Holisto, and may not have such experience or knowledge with respect to any other particular target business.

Following a business combination, the combined company may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that the combined company will have the ability to recruit additional managers, or that any such additional managers it does recruit will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.

Shareholders May Not Have the Ability to Approve an Initial Business Combination

In connection with any proposed business combination, we will either (1) as we plan to do in the case of the Holisto Business Combination, seek shareholder approval of our initial business combination at a general meeting called for such purpose at which shareholders may seek to convert their shares, regardless of whether they vote for or against the proposed business combination or do not vote at all, into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), or (2) provide our shareholders with the opportunity to sell their shares to us by means of a tender offer (and thereby avoid the need for a shareholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), in each case subject to the limitations described herein. The decision as to whether we will seek shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. In the case of the Holisto Business Combination, the terms of the Holisto Business Combination Agreement require us to obtain that shareholder approval. If we determine to engage in a tender offer, such tender offer will be structured so that each shareholder may tender all of his, her or its shares rather than some pro rata portion of his, her or its shares. In that case, we will file tender offer documents with the U.S. Securities and Exchange Commission, or SEC, which will contain substantially the same financial and other information about the initial business combination as is required under the SEC’s proxy rules.

Our current amended and restated memorandum and articles of association provide that we will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation and, if we seek shareholder approval, a majority of the outstanding ordinary shares voted are voted in favor of the business combination. We intend, however, to seek shareholder approval in connection with the shareholder approval of the Holisto Business Combination to amend our amended and restated memorandum and articles of association to eliminate that $5,000,001 net tangible assets requirement. The proposals for approval by our shareholders at the extraordinary general meeting at which we will present the Holisto Business Combination to our shareholders, which are contained in the proxy statement/prospectus forming a part of Holisto’s Registration Statement on Form F-4, will include a proposal to amend our amended and restated memorandum and articles of association to eliminate that net tangible assets requirement.

We had chosen our net tangible asset threshold of $5,000,001 to ensure that we would avoid being subject to Rule 419 promulgated under the Securities Act of 1933, as amended. However, we do not currently anticipate that the combined company resulting from the Holisto Business Combination will meet that net tangible asset threshold, and meeting that threshold is furthermore not needed for qualification for listing on the Nasdaq Stock Market. Consequently, we will seek shareholder approval to eliminate that requirement from our amended and restated memorandum and articles of association in connection with our shareholders’ approval of the Holisto Business Combination. If our shareholders do not approve that amendment, and we cannot complete the Holisto Business Combination, our public shareholders may need to wait until the Extension Date in order to be able to receive a pro rata share of the trust account upon our liquidation.

In connection with the extraordinary general meeting to approve the Holisto Business Combination (or any other potential business combination), our sponsor, initial shareholders, officers and directors have agreed (1) to vote any ordinary shares owned by them in favor of the proposed business combination, (2) not to convert any ordinary shares in connection with the shareholder vote to approve the proposed initial business combination and (3) in the case of a tender offer (not applicable to the Holisto Business Combination), not sell any ordinary shares in any tender in connection with a proposed initial business combination.

None of our officers, directors, sponsor, initial shareholders or their affiliates has indicated any intention to purchase units or Class A ordinary shares from persons in the open market or in private transactions. However, if a significant number of shareholders vote, or indicate an intention to vote, against a proposed business combination or indicate that they wish to have their shares redeemed, our officers, directors, sponsor, initial shareholders or their affiliates could make such purchases in the open market or in private transactions in order to influence the vote and reduce the number of redemptions. Notwithstanding the foregoing, our officers, directors, sponsor, initial shareholders and their affiliates will not make purchases of Class A ordinary shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act, which are rules designed to stop potential manipulation of a company’s stock.

Redemption Rights

At any general meeting called to approve an initial business combination— including the Holisto Business Combination— public shareholders may seek to redeem their shares, regardless of whether they vote for or against the proposed business combination or do not vote at all, into their pro rata share of the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination, less any taxes then due but not yet paid. Alternatively (although not applicable in the case of the Holisto Business Combination), we may provide our public shareholders with the opportunity to sell their Class A ordinary shares to us through a tender offer (and thereby avoid the need for a shareholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account, less any taxes then due but not yet paid.

Our sponsor, initial shareholders and our officers and directors will not have redemption rights with respect to any ordinary shares owned by them, directly or indirectly, whether acquired prior to our initial public offering or purchased by them in our initial public offering or in the after-market. Additionally, the holders of the representative shares will not have redemption rights with respect to the representative shares.

We may require public shareholders, whether they are a record holder or hold their shares in “street name,” to either (i) tender their certificates to our transfer agent or (ii) deliver their shares to the transfer agent electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, in each case prior to a date set forth in the proxy materials sent in connection with the proposal to approve the business combination. There is a nominal cost associated with the above-referenced delivery process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker $45.00 and it would be up to the broker whether or not to pass this cost on to the holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated. However, in the event we require shareholders seeking to exercise redemption rights prior to the consummation of the proposed business combination and the proposed business combination is not consummated this may result in an increased cost to shareholders.

Any proxy solicitation materials we furnish to shareholders in connection with a vote for any proposed business combination will indicate whether we are requiring shareholders to satisfy such certification and delivery requirements. Accordingly, a shareholder would have from the time the shareholder received our proxy statement up until two business days prior to the scheduled vote on the proposal to approve the business combination to deliver his, her or its shares if he, she or it wishes to seek to exercise his redemption rights. This time period varies depending on the specific facts of each transaction. However, as the delivery process can be accomplished by the shareholder, whether or not he, she or it is a record holder or his, her or its shares are held in “street name,” in a matter of hours by simply contacting the transfer agent or his broker and requesting delivery of his, her or its shares through the DWAC System, we believe this time period is sufficient for an average investor. However, we cannot assure you of this fact. Please see the risk factor titled “In connection with any general meeting called to approve a proposed initial business combination, we may require shareholders who wish to redeem their shares in connection with a proposed business combination to comply with specific requirements for conversion that may make it more difficult for them to exercise their redemption rights prior to the deadline for exercising their rights” for further information on the risks of failing to comply with these requirements.

Any request to redeem such shares once made, may be withdrawn at any time up to the vote on the proposed business combination or the expiration of the tender offer. Furthermore, if a holder of Class A ordinary shares delivered his certificate in connection with an election to redeem and subsequently decides prior to the applicable date not to elect to redeem, he or she may simply request that the transfer agent return the certificate (physically or electronically).

If the initial business combination is not approved or completed for any reason, then our public shareholders who elected to exercise their redemption rights would not be entitled at that time to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any shares delivered by public holders.

If the proposed Holisto Business Combination is not completed, we may continue to try to complete a business combination with a different target until the Extension Date (which is the 30 month anniversary of the closing of our initial public offering).

Redemption of Public Shares and Liquidation if No Initial Business Combination

Our sponsor, officers and directors agreed originally that we had only 24 months from the closing of our initial public offering to complete our initial business combination. That 24 month period has been extended to a 30-month period as a result of the approval by our shareholders of the Extension at the Extension Meeting. If we are unable to complete our initial business combination within such 30-month 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 (less up to $100,000 of interest to pay dissolution expenses (which interest shall be net of taxes payable) divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the 30-month time period. Our initial shareholders have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to their founders shares if we fail to complete our initial business combination within 30 months from the closing of our initial public offering. However, if our initial shareholders acquire public shares, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted 30-month time frame.

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 memorandum and articles of association (A) that would affect our public shareholders’ ability to redeem or sell their shares to us in connection with a business combination as described herein or to modify the substance or timing the redemption rights provided to shareholders as described in this Annual Report or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 either immediately prior to or upon completion of our initial business combination (unless our shareholders approve an amendment to our amended and restated memorandum and articles of association to eliminate that requirement, as we intend to propose in connection with the extraordinary general meeting to approve the Holisto Business Combination).

We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.

If we were to expend all of the net proceeds of our initial public offering and the sale of the private units, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by shareholders upon our dissolution would be approximately $10.00. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public shareholders. We cannot assure you that the actual per-share redemption amount received by shareholders will not be substantially less than $10.00. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.

Although we have requested that all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management performs an analysis of the alternatives available to it and will enter into an agreement with a third party that has not executed a waiver only if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where we are unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to complete our initial business combination within the prescribed time frame, 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. Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. Because we are a blank check company, rather than an operating company, and our operations are limited to searching for prospective target businesses to acquire, the only third parties we currently engage are vendors such as lawyers, investment bankers, computer or information and technical services providers or prospective target businesses. In the event that an executed waiver is deemed to be unenforceable against a third party, then our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations. None of our other officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

In the event that the proceeds in the trust account are reduced below (1) $10.00 per public share or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be substantially less than $10.00 per share.

Our sponsor will not be liable as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. We have access to the proceeds of our initial public offering and the sale of the private units, with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, shareholders who received funds from our trust account could be liable for claims made by creditors.

If we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable insolvency laws, and may be included in our insolvency estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any insolvency claims deplete the trust account, we cannot assure you we will be able to return $10.00 per share to our public shareholders. Additionally, if we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or insolvency laws as a voidable preference. As a result, a bankruptcy court could seek to recover some or all amounts received by our shareholders. Furthermore, our board may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

Following the redemptions in connection with the Extension Meeting, our remaining public shareholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (1) the completion of our initial business combination, and then only in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein, (2) the redemption of any public shares properly submitted in connection with a shareholder vote to further amend our amended and restated memorandum and articles of association (A) that would affect our public shareholders’ ability to redeem or sell their shares to us in connection with a business combination as described herein or to modify the substance or timing of the redemption rights provided to shareholders as described in this Annual Report, or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity and (3) the redemption of our public shares if we are unable to complete our initial business combination within 30 months from the closing of our initial public offering, subject to applicable law and as further described herein. In no other circumstances will an existing shareholder have any right or interest of any kind to or in the trust account. In connection with the expected extraordinary general meeting to seek shareholder approval for the Holisto Business Combination (or any other initial business combination), a shareholder’s casting a vote will not, in and of itself, be deemed to be a redemption request for an applicable pro rata share of the trust account. Such shareholder must have also exercised its redemption rights described above.

Amended and restated memorandum and articles of association

Our amended and restated memorandum and articles of association, as amended by the Extension, contain certain requirements that will apply to us until the completion of our initial business combination, including the following:

These provisions cannot be amended without the approval of holders of at least two-thirds of our ordinary shares present and voting at a general meeting. In the event we seek shareholder approval in connection with our initial business combination, our Amended and restated memorandum and articles of association provide that we may consummate our initial business combination only if approved by an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at a general meeting in favor of the business combination.

Additionally, our amended and restated memorandum and articles of association provide that, prior to our initial business combination, holders of our founders shares are the only shareholders that will have the right to vote on the appointment of directors and the right to remove a member of the board of directors for any reason. These provisions of our amended and restated memorandum and articles of association may only be amended by a special resolution passed by at least 90% of our ordinary shares voting in a general meeting. With respect to any other matter submitted to a vote of our shareholders, including any vote in connection with our initial business combination, except as required by law, holders of our founders shares and holders of our public shares will vote together as a single class, with each share entitling the holder to one vote.

Competition

We face intense competition from other entities having a business objective similar to ours, including private investors (either individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. In the event that we are unsuccessful in consummating the Holisto Business Combination, we believe that while there are numerous target businesses that we could potentially acquire with the net proceeds of our initial public offering and the sale of the private warrants (as reduced due to redemptions of public shares effected in connection with the Extension), our ability to compete with respect to the acquisition of certain target businesses that are sizable is limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, in the event we seek shareholder approval of our initial business combination and we are obligated to pay cash for our Class A ordinary shares, it would further reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. We furthermore face competition from other newly-formed entities that may target a business combination transaction with similar focus areas as ours, which intensify the competition that we face in achieving our objective.

Conflicts of Interest

Certain of our executive officers and directors have or may have fiduciary and contractual duties to certain companies in which they have invested. These entities may compete with us for acquisition opportunities. If these entities decide to pursue any such opportunity, we may be precluded from pursuing it. However, we do not expect these duties to present a significant conflict of interest with our search for an initial business combination.

Certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities 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 that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such business combination opportunity to such entity, subject to their fiduciary duties under Cayman Islands law. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination. Our Amended and restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.

Indemnity

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 discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations.

Holisto Business Combination Agreement

Transactions, Consideration and Holisto Capital Restructuring

Pursuant to the Holisto Business Combination Agreement, at the closing (the “Closing”) of the transactions contemplated thereunder (collectively, the “Transactions”), and following the Capital Restructuring (as defined and described below), (i) Merger Sub will merge with and into Moringa, with Moringa continuing as the surviving entity and a wholly-owned subsidiary of Holisto (the “Merger”); (ii) units (both public units and private units), to the extent not previously separated, will be separated into Class A ordinary shares and warrants; (iii) the Class B ordinary shares will be converted into Class A ordinary shares; (iv) the Class A ordinary shares will be exchanged for ordinary shares of Holisto (“Holisto Ordinary Shares”) in accordance with the ratio described below; (v) each Moringa warrant will be converted into one Holisto warrant (on the same terms contained in the Moringa warrants, except that each Holisto warrant will represent the right to acquire Holisto ordinary shares in lieu of Moringa Class A ordinary shares); (vi) Moringa will become a wholly-owned subsidiary of Holisto; and (vii) Moringa, as a wholly-owned subsidiary of Holisto, will change its corporate name to Holisto Inc. and will amend and restate its amended and restated memorandum and articles of association so as to be appropriate for a private company.

The number of Holisto Ordinary Shares to be received in exchange for each Moringa Class A ordinary share in the Merger will depend on whether the share was a public share or a private share:

Because more than 75% of the public shares were redeemed in connection with the Extension Meeting, each remaining public share that is not redeemed in connection with the Holisto Business Combination will be entitled to receive 1.6 Holisto Ordinary Shares.

Prior to the Closing, but subject to the completion of the Closing, Holisto will effect a capital restructuring of its outstanding equity securities (the “Capital Restructuring”) so that the only class of outstanding equity of Holisto will be Holisto Ordinary Shares (along with certain options and warrants to be rolled over in connection with the Transactions). To effect the Capital Restructuring, (i) warrants to purchase Holisto Ordinary Shares, Ordinary A Shares and Preferred Shares (with certain exceptions) will be automatically exercised in accordance with their terms; (ii) each existing Simple Agreement for Future Equity (“SAFE”) that is outstanding for Holisto securities as of the date of the Business Combination Agreement (excluding any New SAFE Agreement) will be converted automatically into Holisto Ordinary Shares in accordance with the terms of the SAFE agreements; (iii) the preferred shares and ordinary A shares of Holisto (including preferred shares and ordinary A shares issuable upon exercise of warrants that are exercised as part of the Capital Restructuring) will be converted into Holisto Ordinary Shares in accordance with their terms with the result that only Holisto Ordinary Shares will be outstanding. Holisto will then effect a share split, to become effective immediately prior to the Closing, and subject to the effectiveness of the Merger, pursuant to which each Holisto Ordinary Share outstanding as of immediately prior to the effective time of the Merger (but after the exercises and conversions described above, and excluding and prior to the issuance of any shares pursuant to a New SAFE Agreement) will be converted into the number of Holisto Ordinary Shares computed by (A) multiplying each such Holisto Ordinary Share by (B) the conversion ratio described below (the “Conversion Ratio”); and (iv) with respect to outstanding options and warrants to purchase Holisto Ordinary Shares that are not exercised as part of the Capital Restructuring, the number of Holisto Ordinary Shares issuable upon exercise of those securities, as well as the exercise price of those securities, will be adjusted in accordance with the Conversion Ratio. The Conversion Ratio is based on a certain valuation for Holisto plus the amount actually invested pursuant to the New SAFE Agreements, and an assumed share price of $10.00 per Holisto Ordinary Share.

The Business Combination Agreement does not provide for any purchase price adjustments to the Conversion Ratio as part of the pre-Closing Capital Restructuring.

Representations and Warranties

The Holisto Business Combination Agreement contains a number of representations and warranties made by each of Moringa and Holisto as of the date of the Holisto Business Combination Agreement or other specified dates. Certain of the representations and warranties are qualified by materiality or Material Adverse Effect (as defined below), as well as information provided in the disclosure schedules to the Holisto Business Combination Agreement. As used in the Holisto Business Combination Agreement, “Material Adverse Effect” means, with respect to any specified person or entity, an event or change that has a material adverse effect upon (a) the business, assets, liabilities, results of operations, prospects or condition (financial or otherwise) of such entity and its subsidiaries, taken as a whole, or (b) the ability of such entity or any of its subsidiaries to consummate the Transactions contemplated by the Holisto Business Combination Agreement or the ancillary agreements to which it is a party or bound, or to perform its related obligations, on a timely basis, in each case, subject to certain conditions and exceptions.

No Survival

The representations and warranties of the parties contained in the Holisto Business Combination Agreement terminate as of, and do not survive, the Closing, and there are no indemnification rights for another party’s breach, subject to any party’s right to claim fraud by another party. The covenants and agreements of the parties contained in the Holisto Business Combination Agreement do not survive the Closing, except for (i) those covenants and agreements to be performed after the Closing, which covenants and agreement will survive until fully performed, and (ii) the case of a claim of fraud by another party.

Covenants of the Parties

Each party has agreed in the Holisto Business Combination Agreement to use its commercially reasonable efforts to effect the Closing. The Holisto Business Combination Agreement also contains certain customary covenants by each of the parties during the period between the signing of the Holisto Business Combination Agreement and the earlier of the Closing or the termination of the Holisto Business Combination Agreement in accordance with its terms (the “Interim Period”), including those relating to: (1) providing each other access to their properties, books and personnel; (ii) the operation of their respective businesses in the ordinary course of business; (iii) Holisto providing financial statements to Moringa; (iv) Moringa’s public filings; (v) no insider trading; (vi) notifications of certain breaches, consent requirements or other matters; (vii) efforts to consummate the Closing; (viii) further assurances; (ix) public announcements; (x) the filing of registration statements by Holisto; and (xi) confidentiality. Each party also agreed during the Interim Period not to solicit or enter into any inquiry, proposal or offer, or any indication of interest in making an offer or proposal for an alternative competing transaction, to notify the other party as promptly as practicable in writing of the receipt of any inquiries, proposals or offers, requests for information or requests relating to an alternative competing transaction or any requests for non-public information relating to such transaction, and to keep the other party informed of the status of any such inquiries, proposals, offers or requests for information. The Holisto Business Combination Agreement also contains certain customary post-Closing covenants regarding, among other matters, (a) maintenance of books and records; (b) indemnification of directors and officers and the purchase of tail directors’ and officers’ liability insurance; and (c) use of trust account proceeds.

In addition, Holisto has agreed to obtain, and, prior to its execution of the Holisto Business Combination Agreement, obtained its required shareholder approval for, among other things: (i) the adoption and approval of the Holisto Business Combination Agreement and the Transactions (including, to the extent required, the Capital Restructuring and the issuance of Holisto Ordinary Shares and warrants to the Moringa shareholders and warrant holders pursuant to the Holisto Business Combination Agreement (including in connection with the Financing)); (ii) the approval of the restated Holisto organizational documents, which had been approved by Holisto’s directors; (iii) the composition of Holisto’s post-Closing board of directors as described below (the “Post-Closing Board”), and agreed to enforce the Voting Agreements (as defined and described below) in connection therewith; (iv) the adoption and approval of certain incentive equity plan modifications, as well as a new equity incentive plan for Holisto in a form to be mutually agreed by Moringa and Holisto prior to the filing of the Holisto Registration Statement, which will provide for a new pool for awards; (v) the new employment agreements for post-Closing executives; (vi) the issuance of Holisto Ordinary Shares upon conversion of the new SAFE Agreements in accordance with their terms; and (vii) indemnification of directors and officers and the purchase of tail directors’ and officers’ liability insurance.

The parties made customary covenants regarding the filing by Holisto of the Registration Statement to register the issuance of (a) the Holisto Ordinary Shares and warrants to purchase Holisto Ordinary Shares to be issued to the holders of Moringa ordinary shares and warrants pursuant to the Holisto Business Combination Agreement, and (b) Holisto Ordinary Shares that are issuable upon exercise of those warrants. The Registration Statement also will contain Moringa’s proxy statement to seek the approval of its shareholders to: (i) the adoption and approval of the Holisto Business Combination Agreement, the ancillary documents related to the Transactions to which Moringa is a party, the Merger, the Plan of Merger, and the other related transactions; (ii) the approval of the change of name of Moringa as the surviving company of the Merger to “Holisto Inc.”; (iii) the approval and adoption of the restated articles of association of Moringa (as a subsidiary of Holisto) upon the Merger; (iv) such other matters as Holisto and Moringa shall mutually determine to be necessary or appropriate in order to effect the Transactions; and (v) the adjournment of the Moringa shareholders meeting, if necessary.

Holisto agreed to file with the SEC, within 30 days of the Closing, an additional registration statement, on Form F-1 under the Securities Act (the “Form F-1 Registration Statement”), covering the (i) sale of Holisto Ordinary Shares which are held by certain existing shareholders of Holisto and that are issuable to certain shareholders of Moringa pursuant to the Transactions, who are parties to an amended shareholder rights agreement to be entered into (the “Amended SRA”) and the registration rights agreement that will replace the registration rights agreement of Moringa, dated February 19, 2021 (such replacement agreement, the “Amended and Restated Registration Rights Agreement”), respectively, (ii) sale of Holisto Ordinary Shares issuable upon exercise of warrants held by certain current shareholders of Holisto who have registration rights, and (iii) sale of Holisto warrants and Holisto Ordinary Shares issuable upon exercise of Holisto warrants which are to be held by certain shareholders of Moringa who are parties to the Amended and Restated Registration Rights Agreement.

The agreement provides that the Post-Closing Board will consist of seven directors, consisting of four directors designated prior to the Closing by Holisto, at least two of whom will be considered independent under the requirements of Nasdaq, one director designated prior to the Closing by Moringa, and two independent directors (under the Nasdaq definition) to be designated by Holisto, subject to Moringa’s consent (not to be unreasonably withheld, delayed or conditioned). Following the closing, Holisto’s chief executive officer and chief financial officer will be the same individuals (in the same office) as that of Holisto immediately prior to the Closing.

In connection with the execution of the Holisto Business Combination Agreement, Holisto intends to enter into employment agreements with certain of its senior employees, which will include non-competition and non-solicitation undertakings by those employees, in each case effective as of the Closing, each of which will be in a form to be agreed upon by Holisto and Moringa. Pursuant to the employment agreements, Holisto intends to grant options to its three founders.

Conditions to Closing

The Holisto Business Combination Agreement contains customary conditions to Closing, including the following mutual conditions of the parties (unless waived): (i) approval of the shareholders of Moringa and Holisto; (ii) approvals of any required governmental authorities; (iii) no law or order preventing the Transactions; (iv) the Holisto Registration Statement having been declared effective by the SEC and no stop order having been issued by the SEC; (v) upon the Closing, Holisto is in compliance with any set of Nasdaq Stock Market listing requirements; and (vi) approval of Holisto’s Nasdaq listing application.

In addition, unless waived by Holisto, the obligations of Holisto and Merger Sub to consummate the Transactions are subject to the satisfaction of the following additional Closing conditions, in addition to the delivery by Moringa of customary certificates and other Closing deliverables: (i) the representations and warranties of Moringa being true and correct as of the date of the Holisto Business Combination Agreement and as of the Closing (subject to certain materiality qualifiers); (ii) Moringa having performed in all material respects its obligations and complied in all material respects with its covenants and agreements under the Holisto Business Combination Agreement required to be performed or complied with by it on or prior to the date of the Closing; and (iii) the execution of the Founder Lock-Up Agreement (as defined and described below) by the sponsor.

Unless waived by Moringa, the obligations of Moringa to consummate the Transactions are subject to, among other matters, the satisfaction of the following additional Closing conditions, in addition to the delivery by Holisto and Merger Sub of customary certificates and other Closing deliverables: (i) the representations and warranties of Holisto and Merger Sub being true and correct as of the date of the Holisto Business Combination Agreement and as of the Closing (subject to certain materiality qualifiers); (ii) Holisto and Merger Sub having performed in all material respects their respective obligations and complied in all material respects with their respective covenants and agreements under the Holisto Business Combination Agreement required to be performed or complied with by them on or prior to the date of the Closing; (iii) absence of any Material Adverse Effect with respect to Holisto and its subsidiaries on a consolidated basis since the date of the Holisto Business Combination Agreement which is continuing and uncured; (iv) each of certain lock-up agreements, certain new employment agreements, the Amended SRA, the Amended and Restated Registration Rights Agreement, and the director and officer indemnification agreements shall be in full force and effect in accordance with the terms thereof as of the Closing and the existing investor rights agreements shall have been terminated; (v) certain new financing agreements from existing investors in Hoolisto (the “New SAFE Agreements”) shall have been converted into Holisto Ordinary Shares in accordance with their terms; (vi) Holisto shall have consummated the Capital Restructuring; (vii) the amended and restated articles of association of Moringa shall have been duly adopted effective as of the effective time of the Merger; and (viii) the members of the Post-Closing Board shall have been elected or appointed as of the Closing in accordance with the composition required by the Holisto Business Combination Agreement.

Termination

Following Amendments No. 1 and No. 2 to the Holisto Business Combination Agreement, either Moringa or Holisto may terminate the agreement upon written notice to the other party, given that the Holisto Business Combination was not consummated on or prior to January 1, 2023.

If the Holisto Business Combination Agreement is terminated, all further obligations of the parties under the Holisto Business Combination Agreement (except for certain obligations related to publicity, confidentiality, fees and expenses, trust fund waiver, no recourse, termination and general provisions) will terminate, and no party to the Holisto Business Combination Agreement will have any further liability to any other party thereto except for liability for fraud or for willful breach of the Holisto Business Combination Agreement prior to termination.

Trust Account Waiver

Holisto and Merger Sub each agreed that they and their affiliates will not have any right, title, interest or claim of any kind in or to any money in the trust account held for Moringa’s public shareholders, and agreed not to, and waived any right to, make any claim against the trust account (including any distributions therefrom) other than in connection with the Closing.

Governing Law

The Holisto Business Combination Agreement is governed by the laws of the State of New York and the parties are subject to exclusive jurisdiction of federal and state courts located in the State of New York (and any appellate courts thereof).

A copy of the Holisto Business Combination Agreement serves as Exhibit 2.1 to this Annual Report and is incorporated herein by reference, and the foregoing description of the Holisto Business Combination Agreement is qualified in its entirety by reference thereto.

Related Agreements 

Shareholder Voting and Support Agreement

Simultaneously with the execution and delivery of the Holisto Business Combination Agreement, certain shareholders of Holisto (as listed in the agreement), Holisto, and Moringa entered into a shareholder voting and support agreement (the “Shareholder Voting and Support Agreement”). Pursuant to such agreement, each shareholder irrevocably and unconditionally agreed that, at any meeting of the shareholders of Holisto (whether annual or special and whether or not an adjourned or postponed meeting), including any class meetings, class votes or class consents, and in connection with any written consent of shareholders of Holisto, such shareholder shall, and shall cause any other holder of record of any of the such shareholder’s covered shares to: (a) if and when such meeting is held, appear at such meeting (in person or by proxy), and if a quorum is not present, to vote (in person or by proxy) in favor of adjournment of such meeting of the shareholders to a later date, as in accordance with Holisto’s Articles of Association as in effect at such time; (b) vote, in person or by proxy, or validly execute and deliver any written consent with respect to all of the shareholder’s Covered Shares (as defined therein) in favor of the resolutions in the form attached to the agreement and any other resolutions in favor of (i) the Merger and the adoption of the Holisto Business Combination Agreement and any other matters necessary or reasonably requested by Holisto for consummation of the Merger and the other transactions contemplated by the Holisto Business Combination Agreement; (c) vote, in person or by proxy, or validly execute and deliver any written consent with respect to all of the shareholder’s Covered Shares against (A) any transaction, action or agreement of any kind (other than the Merger pursuant to the Holisto Business Combination Agreement) concerning the sale or transfer of (x) all or any material part of the business or assets of Holisto or (y) any of the shares or other equity interests or profits of Holisto, that would reasonably be expected to (i) frustrate the purposes of, impede, interfere with, delay, postpone or adversely affect the Busiess Combination with Moringa (including the consummation thereof), (ii) result in a breach of any covenant, representation or warranty or other obligation or agreement of Holisto under the Holisto Business Combination Agreement, or cause any of the conditions to Closing set forth in the Holisto Business Combination Agreement not to be fulfilled or satisfied, or (iii) result in a breach of any covenant, representation or warranty or other obligation or agreement of the shareholder contained in the Shareholder Voting and Support Agreement and (B) any merger agreement or merger (other than the Holisto Business Combination Agreement and the Merger), consolidation, combination, sale of all or substantially all assets, scheme of arrangement, reorganization, recapitalization, dissolution, liquidation or winding up of or by Holisto. Each shareholder of Holisto party to the Shareholder Voting and Support Agreement granted a proxy in furtherance of its voting undertakings pursuant to the agreement.

A copy of the form of Shareholder Voting and Support Agreement serves as Exhibit 10.9 to this Annual Report and is incorporated herein by reference, and the foregoing description of the form of Lock-Up Agreement is qualified in its entirety by reference thereto.

The Business Combination is expected to be consummated after obtaining the required approval by the shareholders of Moringa and the satisfaction of certain other customary closing conditions.

As noted above, in connection with the Business Combination, on September 7, 2022, Holisto filed the Holisto Registration Statement, which includes a proxy statement/prospectus. Holisto amended such documents on December 29, 2022 and February 7, 2023. Promptly after the Form F-4 is declared effective by the SEC, we will mail the proxy statement/prospectus and a proxy card to each shareholder entitled to vote at the extraordinary general meeting relating to the Business Combination. For the avoidance of doubt, this Annual Report does not give effect to the prospective Business Combination and does not contain a full description of the risks associated with the prospective Business Combination. Such risks and effects relating to the prospective Business Combination are described in the Holisto Registration Statement. The Holisto Registration Statement also contains a description of the business, operations, financial condition, management, governance, capitalization and other materials terms related to the combined company following the Holisto Business Combination, as well as information regarding the redemption process and the shareholders’ meeting of Moringa at which the Holisto Business Combination and the associated transactions thereto will be brought for approval. INVESTORS AND SECURITY HOLDERS OF MORINGA ARE URGED TO READ SUCH MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE HOLISTO BUSINESS COMBINATION THAT MORINGA AND/OR HOLISTO LTD FILE WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT MORINGA, HOLISTO LTD AND THE HOLISTO BUSINESS COMBINATION. The Holisto Registration Statement and other relevant materials in connection with the Holisto Business Combination, and any other documents filed by us with the SEC, may be obtained free of charge at the SEC’s website (www.sec.gov) or you should contact us via phone or in writing to Moringa at 250 Park Avenue, 7th Floor, New York, NY, 10017, and telephone (212) 572-6395 or to Holisto at Sderot Nim 2, Rishon Le’Zion, Israel, telephone +972 (72-233-6381). For the avoidance of doubt, the Holisto Registration Statement and any amendments or supplements thereto, are not incorporated by reference herein, unless specifically stated otherwise.

Facilities

We currently maintain our executive offices at 250 Park Avenue, 7th Floor, New York, NY 10177. Our executive offices are provided to us by our sponsor at a minimal payment per month (included in the fee of up to $10,000 per month that we pay to our sponsor for administrative and support services). We consider our current office space adequate for our current operations.

Employees

As of the date of this Annual Report, we do not have any employees. We have three officers, none of whom receives compensation for serving in such capacity. Members of our management team are not obligated to devote any specific number of hours to our matters but they 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 that our officers or any other members of our management team devote in any time period varies based on the status of our pursuit of a target business for our initial business combination and the current stage of the business combination process.

Periodic Reporting and Financial Information

We have registered our units, Class A ordinary shares and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports contain financial statements audited and reported on by our independent registered public auditors.

We will provide shareholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to shareholders to assist them in assessing the target business. These financial statements may be required to be prepared in accordance with, or be reconciled to, U.S. GAAP or IFRS, depending on the circumstances and the historical financial statements will be required to be audited in accordance with PCAOB standards. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. While this may limit the pool of potential business combination candidates, we do not believe that this limitation will be material.

We are required to evaluate our internal control procedures for the fiscal year ending December 31, 2022, as required by the Sarbanes-Oxley Act; however, as we are not deemed to be a large accelerated filer or an accelerated filer, and still qualify as an emerging growth company, will are not required to have our internal control procedures audited. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We take advantage of the benefits of this extended transition period.

We will remain an emerging growth company until the earliest of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter, and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.

Additionally, we are a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues exceed $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter.