Item 1. Business.
General
We are a blank check company formed on April 19, 2021 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 November 2021, and since that time, we have engaged in discussions
with potential business combination target companies; we have not, however, as of yet, reached a definitive agreement with a specific
target company with respect to an initial business combination with us.
While we may pursue a business combination target in any business or
industry and across any geographical region, we are focusing our search on technology-based healthcare businesses that are domiciled in
Israel, that carry out all or a substantial portion of their activities in Israel, or that have some other significant Israeli connection.
Industry Opportunity
Israel’s thriving healthcare ecosystem — With a
population of just over nine million, Israel ranks first among OECD member countries in gross domestic expenditure on R&D as a percentage
of GDP: 4.9% compared to 2.03% in the European Union, according to the February 2020 publication of the OECD Directorate for Science,
Technology, and Innovation. According to the 2021 Israel Innovation Authority annual report on Israel’s Life Sciences Industry,
which we refer to as the IIA 2021 annual report, as of the date of that report, approximately 1,750 life sciences companies were active
in Israel, employing more than 84,000 people. This figure reflects a near-doubling of the number of life sciences companies in Israel
over the last decade. Israel’s life sciences industry focuses primarily on medical devices (39% of companies), followed by digital
health (27%), biotechnology (26%), and pharmaceuticals (8%). According to the Israel Export and International Cooperation Institute, pharmaceutical
and medical equipment product exports from Israel reached $5.2 billion in 2019, constituting approximately 5% of the total exports of
goods and services from Israel.
Academic excellence leading to commercial successes —
As reviewed in the prestigious medical journal The Lancet in 2017, many factors have contributed to the emergence of Israel as
a “start-up healthcare nation”, including the wide availability of well-trained scientists and engineers, numerous incubator
programs, governmental support and- importantly-academic excellence in healthcare. Although Israel’s population is only about 0.1%
of the world’s population, in 2018 Israeli publications represented close to 1% of the worldwide publications in medicine and related
biological sciences(IIA’s 2019 annual report). This academic activity resulted in notable successes, for example:
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Doxil, a chemotherapy for ovarian cancer, developed at the Hadassah Medical Center/Hebrew University and acquired by Johnson & Johnson; |
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Azilect, a Parkinson’s disease drug, developed by Teva Pharmaceutical Industries based on research at the Technion, Israel’s Institute of Technology; |
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Exelon, a drug for the treatment of Alzheimer’s disease, discovered at the Hebrew University and developed and marketed by Novartis; |
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Copaxone, for multiple sclerosis, or MS, originated from the Weizmann Institute of Science, or the Weizmann Institute, and developed and commercialized by Teva Pharmaceutical Industries; and |
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Rebif, another MS treatment, developed by the Weizmann Institute in collaboration with Serono’s subsidiary InterPharm. |
Israeli companies reaching global markets — Israeli successes,
however, have not been limited to academic innovations acquired by large pharmaceutical companies. In recent years, several Israeli biotech
firms that developed innovative products from bench to bedside have gained United States Food and Drug Administration (FDA) and other
regulatory approvals and started marketing their products in the United States and other regions. Notable examples are:
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UroGen Pharma’s JELMYTO® (mitomycin) for urothelial cancer; |
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Protalix BioTherapeutics’ Elelyso®, a recombinant glucocerebrosidase enzyme for Gaucher’s disease produced from innovative transgenic plant-based cell cultures; |
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Kamada Ltd.’s GLASSIA® (alpha-1 proteinase inhibitor) for emphysema due to congenital deficiency of alpha-1-proteinase inhibitor; |
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RedHill Biopharma’s Talicia® for Treatment of H. pylori infection; and |
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MediWound’s NexoBrid®, a drug for the debridement of severe burns. |
Bio-convergence successes — Israel’s strengths in
engineering, IT and life sciences, make the emerging arena of bio-convergence another potential significant growth engine for the Israeli
high-tech industry. Israeli multidisciplinary research combining engineering and biology has produced to-date multiple success stories,
such as:
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Pillcam, the first ingestible diminutive camera for gastrointestinal imaging developed by Given Imaging and sold to Covidien; |
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Medinol’s pioneering flexible closed cell coronary stent; |
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InSightec’s groundbreaking MRI-guided Focused Ultrasound Surgery (MRgFUS), FDA- approved for Parkinson’s disease; |
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NeuroDerm’s first ever liquid levodopa formulation combined with a pump for continuous sub-cutaneous administration in Parkinson’s disease (acquired by Mitsubishi Tanabe for $1.1 billion); |
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BiosenseWebster’s CARTO® 3 3D cardiac electrophysiological mapping system for arrhythmia treatment, acquired by Johnson & Johnson; |
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MediGuide’s Medical Positioning System, that uses proprietary sub-millimeter sensors for minimally-invasive, intra-body navigation (sold to St. Jude Medical); |
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Nanox’s innovative “Cold-Cathode” x-ray source for more efficient radiological imaging; |
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Medi-Tate’s iTind, a minimally-invasive device to treat benign prostate hyperplasia, recently acquired by Olympus for $250 million; |
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InMode’s novel radio-frequency-based technology that enables minimally-invasive procedures and improves existing surgical procedures across several surgical specialties, such as plastic surgery and dermatology; |
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Mazor Robotics’ X STEALTH Edition guidance system for spinal surgery, a technology that originated at the Technion, Israel’s Institute of Technology, and acquired by Medtronic for $1.6 billion; and |
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NovoCure’s Optune, an electric field generator to treat gioblastoma multiforme (a type of brain cancer). |
Looking ahead — While the Israeli life sciences industry
is dominated by medical device companies, which represented as of 2020, approximately 39% of all Israeli life sciences companies, the
healthcare IT/digital health sector has been growing in recent years. Accordingly, Israel’s life sciences industry’s role
in the global healthcare IT and digital health ecosystem is increasing, from 1.5% of global investments in digital health in 2014 to 4.5%
in 2019, whereas the country’s population represents only about 0.1% of the world’s population (IIA 2021 annual report). Of
the 92 life science companies established In Israel in 2020, 43% were in the digital health subsector, which corresponds with the overall
boost in this subsector in the past five years (IIA 2021 annual report). Recent Israeli successes in the field of health-related information
technology include Zebra Medical Vision’s FDA-approved radiological analytics platform, and MDClone’s ADAMS big data platform
for synthesizing, analyzing, and sharing anonymized clinical data.
Catalysts of the Israeli healthcare industry:
In addition to its academic excellence and a track record of commercial
successes, several additional factors enhance the Israeli healthcare ecosystem:
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Educated and skilled workforce — Israel enjoys a very high percentage of engineers and scientists per capita 140 scientists and technicians per 10,000 employees, highest in the world as of 2011 (Eduard Shteinbuk “R&D and Innovation as a Growth Engine”, National Research University — Higher School of Economics (published July 2011)) and a very high ratio of academic publications per capita (25th in the world in 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) as of 2016). |
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Government support — The Israeli government founded the Technology Incubator program in the early 1990s. According to the IIA 2021 annual report, as of the date of the report, there were over 22 technological, biotechnological and peripheral entrepreneurship incubators across the country, all of which have been privatized and are owned by seasoned and experienced groups, such as venture capital funds and multinational corporations, as well as private investors. 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 1,100 projects (as of the date of the IIA 2019 annual report) have so far graduated from the incubators, with over 45% successfully attracting additional investments from different investors. Moreover, the Israeli government (through the IIA) has been investing more than $100 million in the life sciences sector every year for more than a decade via its different programs (IIA 2021 annual report). The main program is the R&D Fund, which offers R&D grants of up to 40% of the approved R&D program cost. |
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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 in Israel, with a four-year grant scheme covering on average 25% of the employer’s cost of salaries for each new employee. |
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Strong VC industry — The total investments in life science companies in Israel in 2020 and in Q1 2021 were $2.5 billion and $900 million, respectively, a significant increase of approximately 55% in 2020 compared to 2019 and a record high in the last decade. Of the total investments in 2020, more than $200 million was invested by Israeli venture capital funds; in the first quarter of 2021, Israeli venture capital funds already invested $100 million, almost 50% of their investment in the full year of 2020 (IIA 2021 annual report). |
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Flexible, creative economy — Flexibility and adaptability to change are widely considered primary factors affecting business performance. 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. 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. |
Advantages of SPAC business combination for mature Israeli healthcare
companies — For several years, Nasdaq has been the Israeli life sciences companies’ main source for public funding. Over
40 of the 80+ Israeli companies listed on Nasdaq are life sciences companies. Approximately $4.7 billion was raised on Nasdaq by Israeli
life sciences companies in the last decade. In 2020 alone, $751 million was raised on Nasdaq by 22 Israeli life science companies, and
in the first quarter on 2021, $203 million was raised by five such companies (IIA 2021 annual report). However, while a significant number
of mature, potentially profitable, Israeli healthcare companies would be ideal candidates to go public via the route of an initial public
offering on Nasdaq, they often have difficulties doing so because of size barriers that generally restrict such offerings to larger companies.
Additionally, Israeli companies’ attempts at public offerings on Nasdaq are hindered by the limited local expertise needed for such
a process and are particularly sensitive to its inherent uncertainty. 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 approach can be utilized
to address this unmet need and enable worthwhile, growth Israeli healthcare companies to scale up and expand.
As mentioned above, the Israeli healthcare industry has had many success
stories and has developed to-date a thorough knowhow that harbors great potential for future successes. As a SPAC that is focused solely
on the Israeli healthcare industry and is led by our management and sponsor, which have substantive Israeli business knowledge, experience
and relationships, we believe that we will enjoy the privilege of selecting a promising company out of a large variety of available companies.
Acquisition Strategy and Criteria
Our acquisition strategy is to identify an untapped opportunity within
our target Israeli healthcare 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 small to mid-size Israeli-related healthcare companies that have a solid
novel technological foundation and promising market opportunities which have so far refrained from becoming public for a variety of reasons.
We hope to serve as an attractive partner for those companies, enabling them to go public in an alternate, more easily accessible manner
— a business combination transaction — and to thereby benefit from the capital-raising options available for a publicly traded
company in the U.S.
Our sponsor’s participants and their affiliates have extensive
experience and expertise in strategic investments in public and private companies where they have a strong investment conviction driven
by clearly identifiable growth opportunities. We will apply a similar investment philosophy and approach to analyze prospective targets
and identify an attractive business combination.
We have identified the following general, non-exclusive criteria
and guidelines that we believe are important in evaluating prospective targets for our initial business combination. We have been using
these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination
with a target that does not meet one or more of these criteria and guidelines. We intend to focus on target businesses or assets with
the following attributes:
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Small-to Middle-Market Businesses We believe that the small-to middle-market segment provides the greatest number of opportunities for investment and is consistent with our sponsor’s participants’ investment history across the various healthcare segments. These segments are where our management team has the strongest capability to identify attractive opportunities. We are seeking to acquire potential target businesses which can use the funding we bring to achieve value-creating milestones. |
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Benefit from Being a Public Company. We are seeking potential target businesses with scientific or other competitive advantages in the markets in which they operate that can benefit from a broader access to capital, and the heightened public profile associated with being a publicly traded company. |
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Technology-Driven Business Model. We are
seeking to acquire potential target businesses with a pioneering scientific and technology platform, including in the life sciences/biotech,
medical technology, healthcare information technology and technology-enabled services sector. |
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Experienced Management Team. We are seeking to acquire business with a strong, experienced managerial, financial, and technology/scientific experience as well as mature policies on corporate governance and reporting in place. |
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Significant Growth Prospects. We are looking to select a target business expected to have significant embedded and/or underexploited growth opportunities; with near- and longer-term valuation inflection points that will allow them to reap the advantages and acceleration of having access to public capital markets. |
We may use other criteria and guidelines as well. Any evaluation relating
to the merits of a particular initial business combination may be based on these general criteria and guidelines as well as other considerations,
factors, and criteria that our management may deem relevant. If we decide to enter an initial business combination with a target business
that does not meet the above criteria and guidelines, we will disclose that fact in our shareholder communications related to the acquisition.
As discussed elsewhere in this Annual Report, this would be in the form of proxy solicitation materials or tender offer documents that
we would file with the Securities and Exchange Commission, or SEC.
In evaluating a prospective target business, we conduct a comprehensive
due diligence review. That due diligence review may include, among other things, financial statement analysis, initial public offering
readiness assessment, business practices integration analysis, document reviews, meetings with the target’s management and other
employees, inspection of facilities, consultations with relevant industry experts, competitors, customers, and suppliers, as well as a
review of additional information (operational, financial, legal and otherwise) that we obtain as part of our analysis of a target company.
We are not prohibited from pursuing an initial business combination
with a company that is affiliated with our sponsor, officers, or directors. In the event we seek to complete our initial business combination
with a company that is affiliated with our sponsor, officers, or directors, we, or a committee of independent directors, will obtain an
opinion from an independent investment banking firm which is a member of FINRA or an independent accounting firm that our initial business
combination is fair to our company from a financial point of view.
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 because of such
experience, provides 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 and global healthcare 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 will help us to identify
attractive Israeli-related healthcare 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 healthcare technology companies into large, successful
publicly traded entities, and their deep network of relationships in Israel and elsewhere, as strong competitive advantages. We utilize
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 the experience of our management team and directors
in evaluating assets through investing and company building enables us to source the highest quality targets. Our selection process leverages
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 can capitalize the target business and create purposeful strategic initiatives to achieve attractive growth and performance targets.
Our management team consists of professionals and senior operating
executives of various companies and entities with decades of experience and industry exposure in various Israeli healthcare industries.
Based on our management team’s extensive experience and industry exposure, we believe that we may be able to identify, evaluate
the risk and reward of, and execute on attractive acquisition opportunities.
Significant Activities since Inception
On November 2, 2021, the Company consummated the closing of its initial
public offering, selling 12,650,000 units to the public and generating aggregate gross proceeds of $126,500,000 for the Company. Each
unit consists of one Class A ordinary share of the Company, par value $0.0001 per share and one-half redeemable warrant of the Company,
each warrant entitling the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share.
Substantially concurrent with the closing of the initial public offering,
the Company completed the private sale of 4,866,667 warrants (the “Private Placement Warrants”) to Cactus Healthcare Management
LP at a purchase price of $1.50 per Private Placement Warrant, generating aggregate gross proceeds of $7,300,000 for the Company.
Following the respective closings, a total of $129,030,000 was placed
in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A. maintained by Continental Stock Transfer & Trust Company, acting as
trustee.
Our units commenced trading on the Nasdaq Global Market on November
2, 2021 under the symbol “CCTSU”. As of December 30, 2021, holders of the units sold in the Company’s initial public
offering could begin to elect to separately trade the Class A ordinary shares and warrants included in the units. The Class A ordinary
shares and warrants that are separated may be traded on the Nasdaq Global Market under the symbols “CCTS” and “CCTSW,”
respectively. Units that are not separated continue to trade on the Nasdaq Global Market under the symbol “CCTSU.”
Competitive Strengths
Status as a Public Company
We believe that our structure makes us an attractive business combination
partner to target businesses. As an existing public company, we offer 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. We believe that target businesses
might find this avenue 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
With funds available in our trust fund in an amount of $124,602,500
assuming no redemptions and after payment of up to $4,427,500 as a deferred underwriting fee to Oppenheimer and Moelis in connection with
the business combination if the underwriters’ over-allotment option is exercised in full), in each case before additional fees
and expenses associated with our initial business combination, 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 significant percentage
of our public shareholders that may elect to redeem their shares in connection with a business combination, thereby reducing our cash
resources, we may need to secure third party financing in order to successfully effect such 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. We intend to utilize cash derived from the proceeds of our initial public offering
and the private placement of private warrants, our shares, debt or a combination of these in effecting a business combination which has
not yet been identified. Accordingly, investors are investing without first having an opportunity to evaluate the specific merits or risks
of any one or more business combinations. A business combination may involve the acquisition of, or merger with, a company which does
not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding what it
may deem to be adverse consequences of undertaking a public offering itself. These include time delays, significant expense, loss of voting
control and compliance with various federal and state securities laws. In the alternative, we may seek to consummate a business combination
with a company that may be financially unstable or in its early stages of development or growth. While we may seek to effect simultaneous
business combinations with more than one target business, we will probably have the ability, as a result of our limited resources, to
effect only a single business combination.
We Have Not Identified a Target Business
To date, we have not selected a specific target business on which to
concentrate our search for a business combination. Additionally, we have not engaged or retained any agent or other representative to
identify or locate a company with which we may effect a potential merger, capital stock or share exchange, asset acquisition or other
similar business combination. As a result, we cannot assure you that we will be able to locate a target business or that we will be able
to engage in a business combination with a target business on favorable terms or at all.
Subject to our management team’s pre-existing fiduciary obligations
and the fair market value requirement described below, we have 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 above. Accordingly, there is no basis for investors to evaluate the possible merits or risks of the target business
with which we may ultimately complete a business combination. Although our management will endeavor to evaluate the risks inherent in
a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
Sources of Target Businesses
While we have not yet selected a target business with which to consummate
our initial business combination, we believe based on our management’s business knowledge and past experience that there are numerous
potential candidates. Our principal means of identifying potential target businesses is by leveraging 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 able to generate
a number of potential business combination opportunities that warrant further investigation. Target business candidates are also 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, because many of these sources will 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 engage the services of professional firms or other individuals that specialize in business acquisitions
on a formal basis, in which event we may pay a finder’s fee, consulting fee or other compensation to be determined in an arm’s
length negotiation based on the terms of the transaction. In 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: the $10,000 monthly administrative services fee; the payment of consulting, success or finder fees to our sponsor, officers,
directors, initial shareholders or their affiliates in connection with the consummation of our initial business combination; the repayment
of $300,000 of loans that we incurred to our sponsor prior to our IPO and which we repaid upon the consummation of our IPO; and the repayment
of additional loans that our sponsor or its affiliates may extend to us for working capital purposes, up to $450,000 of which are currently
represented by a promissory note that we issued to our sponsor, and up to $1,500,000 of which (including the foregoing $450,000 amount)
may be converted into warrants to purchase Class A ordinary shares, at a price of $1.50 per warrant, at the option of the lenders. . Our
audit committee reviews and approves 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 have no present intention to enter into a business
combination with a target business that is affiliated with any of our officers, directors or sponsor. However, 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.
Selection of a Target Business and Structuring of a 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 “Selection of a Target
Business and Structuring of a Business Combination”.
An evaluation relating to the merits of a particular business combination
is 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 conduct an extensive due diligence
review which encompasses, among other things, meetings with incumbent management and inspection of facilities, as well as review of financial
and other information which is made available to us. This due diligence review is conducted either by our management or by unaffiliated
third parties we may engage, although we have no current intention to engage any such third parties.
The time and costs required to select and evaluate a target business
and to structure and complete the business combination cannot presently be ascertained with certainty. Any costs incurred with respect
to the identification and evaluation of a prospective target business with which a business combination is not ultimately completed results
in a loss to us and reduces the amount of capital available to otherwise complete a business combination.
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.
We currently anticipate structuring a business combination to acquire
100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination
where we merge directly with the target business or where we acquire less than 100% of such interests or assets of the target business
in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such
business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or
otherwise acquires a controlling interest in the target 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
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.
Lack of Business Diversification
We may seek to effect a business combination with more than one target
business, although we expect to complete our business combination with just one business. Therefore, at least initially, the prospects
for our success may be entirely dependent upon the future performance of a 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:
| ● | subject us to numerous economic, competitive and regulatory
developments, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent
to a business combination, and |
| ● | result in our dependency upon the performance of a single
operating business or the development or market acceptance of a single or limited number of products, processes or services. |
If we determine to simultaneously acquire several businesses and such
businesses are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent
on the simultaneous closings of the other acquisitions, which may make it more difficult for us, and delay our ability, to complete the
business combination. With multiple acquisitions, we could also face additional risks, including additional burdens and costs with respect
to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated
with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business.
Limited Ability to Evaluate the Target Business’ Management
Although we scrutinize the management of a prospective target business
when evaluating the desirability of effecting a business combination, 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 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 the target 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,
we cannot assure you that our officers and directors will have significant experience or knowledge relating to the operations of the particular
target business.
Following a business combination, we may seek to recruit additional
managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit
additional managers, or that any such additional managers we do 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) 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. 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 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. Whether we seek shareholder approval or engage in a tender offer, 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 chose 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, if we seek to consummate
an initial business combination with a target business that imposes any type of working capital closing condition or requires us to have
a minimum amount of funds available from the trust account upon consummation of such initial business combination, we may need to have
more than $5,000,001 in net tangible assets either immediately prior to or upon consummation and this may force us to seek third party
financing which may not be available on terms acceptable to us or at all. As a result, we may not be able to consummate such initial business
combination and we may not be able to locate another suitable target within the applicable time period, if at all. Public shareholders
may therefore have to wait 18 months from the closing date of our initial public offering in order to be able to receive a pro rata share
of the trust account. Our sponsor, initial shareholders, officers and directors have agreed (1) to vote any ordinary shares owned
by them in favor of any proposed business combination, (2) not to convert any ordinary shares in connection with a shareholder vote
to approve a proposed initial business combination and (3) 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 had indicated any intention to purchase units or Class A ordinary shares as part of our initial public offering or from
persons in the open market or in private transactions. However, if we hold a meeting to approve a proposed business combination and a
significant number of shareholders vote, or indicate an intention to vote, against such proposed business combination or 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.
Conversion Rights
At any general meeting called to approve an initial business combination,
public 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 as of two business days
prior to the consummation of the initial business combination, less any taxes then due but not yet paid. Alternatively, 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 conversion 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 the initial public offering or in the aftermarket.
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 conversion rights. The need to deliver shares is a requirement of exercising conversion rights
regardless of the timing of when such delivery must be effectuated. However, in the event we require shareholders seeking to exercise
conversion 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 conversion 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 convert 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 conversion 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 convert 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 of their conversion and subsequently decides prior to the applicable
date not to elect to exercise such rights, 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 conversion rights would not be entitled to convert 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 our initial proposed business combination is not completed, we may
continue to try to complete a business combination with a different target until 18 months from the closing date of our initial public
offering.
Redemption of Public Shares and Liquidation if No Initial Business
Combination
Our sponsor, officers and directors have agreed that we will have only
18 months from the closing date of our initial public offering to complete our initial business combination. If we are unable to
complete our initial business combination within such 18-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 18-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 18 months from the closing date 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 18-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 convert 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, 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 (so that we do not then become subject to the SEC’s “penny stock” rules).
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 the $975,000 of proceeds held outside the trust account
as of December 31, 2021, 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. We could also request additional funding from our sponsor and/or its partners
under those circumstances.
If we were to expend all of the net proceeds from our initial public
offering and the sale of the private warrants, other than the proceeds deposited in the trust account, and without taking into account
interest, if any, earned on the trust account, the per-share redemption amount received by shareholders upon our dissolution would
be approximately $10.20. 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 $10.20. 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 seek to have 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) $10.20 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 as part 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) $10.20 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 $10.20 per share.
We will seek to reduce the possibility that our sponsor will have to
indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (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 monies held in the trust account. Our sponsor will also not be liable as to any claims under our
indemnity of the underwriters as part of our initial public offering against certain liabilities, including liabilities under the Securities
Act. We will have access to up to approximately $1,112,000 from the proceeds of our initial public offering and the sale of the private
warrants, with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently
estimated to be no more than approximately $100,000). In the event that we liquidate, and it is subsequently determined that the reserve
for claims and liabilities is insufficient, shareholders who received funds from our trust account could be liable for claims made by
creditors. The foregoing $975,000 amount held outside of the trust as of December 31, 2021 was the amount that remained from the proceeds
of our initial public offering and accompanying private placement, after payment of $1,128,000 in offering expenses, and $137,000 in operating
expenses.
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 $10.20
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.
Our 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 amend our amended and restated
memorandum and articles of association (A) that would affect our public shareholders’ ability to convert 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 18 months from the closing date of our initial public offering, subject to applicable law and as further described
herein. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. In the event we
seek shareholder approval in connection with our initial business combination, a shareholder’s voting in connection with our initial
business combination alone will not result in a shareholder’s redeeming its shares to us for an applicable pro rata share of the
trust account. Such shareholder must have also exercised its redemption rights described above.
Amended and Restated Memorandum and Articles of Association
|
● |
Our amended and restated memorandum and articles of association contain
certain requirements and restrictions that apply to us until the completion of our initial business combination. Our amended and restated
memorandum and articles of association contain a provision which provides that, if we seek to amend our amended and restated memorandum
and articles of association (A) that would affect our public shareholders’ ability to convert or sell their shares to us in
connection with a business combination as described herein or to modify the substance or timing of our obligation to redeem our public
shares if we do not complete our initial business combination within 18 months from the closing date of our initial public offering or
(B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, we will
provide public shareholders with the opportunity to redeem their public shares in connection with any such amendment. Specifically, our
amended and restated memorandum and articles of association provide, among other things, that: prior to the completion of our initial
business combination, we shall either (1) seek shareholder approval of our initial business combination at a general meeting called
for such purpose at which public shareholders may elect to redeem their public shares without voting, and if they do vote, irrespective
of whether they vote for or against the proposed business combination, or (2) provide our public shareholders with the opportunity
to redeem all or a portion of their public shares upon the completion of our initial business combination by means of a tender offer (and
thereby avoid the need for a shareholder vote), in each in cash, for an amount payable in cash equal to the aggregate amount then on deposit
in the trust account as of two business days prior to the completion of our initial business combination, including interest (which interest
shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to the limitations described
herein; |
|
● |
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 completion of our initial business combination and, solely if we seek shareholder approval, a majority of the issued and outstanding ordinary shares voted are voted in favor of the business combination; |
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if our initial business combination is not consummated within 18 months from the closing date of our initial public offering, then our existence will terminate, and we will distribute all amounts in the trust account; and |
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● |
prior to our initial business combination, we may not issue additional shares that would entitle the holders thereof to (1) receive funds from the trust account or (2) vote as a class with our public shares (a) on any initial business combination or (b) to approve an amendment to our amended and restated memorandum and articles of association to (x) extend the time we have to consummate a business combination beyond 18 months from the closing date of our initial public offering or (y) amend the foregoing provisions. |
These provisions cannot be amended without the approval of holders
of at least two-thirds of our Class A 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 simple 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.
Comparison of redemption or purchase prices in connection with our
initial business combination and if we fail to complete our initial business combination.
The following table compares the redemptions and other permitted purchases
of public shares that may take place in connection with the completion of our initial business combination and if we are unable to complete
our initial business combination within 18 months from the closing of our IPO.
|
|
Redemptions in Connection
with our Initial Business
Combination |
|
Other Permitted Purchases
of Public Shares by our
Affiliates |
|
Redemptions if we fail to
Complete an Initial Business
Combination |
Calculation of
redemption
price |
|
Redemptions at the time of our initial business combination may be made pursuant to a tender offer or in connection with a shareholder vote. The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a shareholder vote. In either case, our public shareholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination (which is initially anticipated to be $10.20 per share), including interest (which interest shall be net of taxes payable) divided by the number of then issued and outstanding public shares, subject to the limitation that no redemptions will take place if all of the redemptions would cause our net tangible assets to be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of a proposed business combination. |
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If we seek shareholder approval of our initial business combination, our sponsor, directors, officers, or their respective affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following completion of our initial business combination. Such purchases will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. None of the funds in the trust account will be used to purchase shares in such transactions. |
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If we are unable to complete our initial business combination within 18 months from the closing of our IPO, we will redeem all public shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account (which is initially anticipated to be $10.20 per share), 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. |
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|
|
|
|
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Impact to remaining shareholders |
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The redemptions in connection with our initial business combination will reduce the book value per share for our remaining shareholders, who will bear the burden of the deferred underwriting fee and interest withdrawn in order to pay taxes (to the extent not paid from amounts accrued as interest on the funds held in the trust account). |
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If the permitted purchases described above are made, there will be no impact to our remaining shareholders because the purchase price would not be paid by us. |
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The redemption of our public shares if we fail to complete our initial business combination will reduce the book value per share for the shares held by our sponsor, who will be our only remaining shareholder after such redemptions. |
Competition
We face intense competition from other entities having a business objective
similar to experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services
to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge
than we do, and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe
there are numerous target businesses that we could potentially acquire with the net proceeds from our initial public offering and the
sale of the private warrants, 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 will potentially 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 may furthermore
face competition from other newly-formed entities that may target a business combination transaction with similar focus areas as
ours, which may 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 (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
(1) $10.20 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 as part 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.
Employees
As of the date of this Annual Report, we have two (2) officers.
Members of our management team are not obligated to devote any specific number of hours to our matters but they intend to devote as much
of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time 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 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, each of our annual reports will 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 may 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 will be required to evaluate our internal control procedures for
the fiscal year ending December 31, 2022, as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated
filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to have our internal control procedures
audited as of the 2022 year-end. 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 closing date 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 our statements of operations, changes in equity and cash flows in our audited financial
statements, and presenting a comparison of our most recent annual results only against one prior year period. We will remain a smaller
reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates
equals or exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues equal or exceed
$100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates equals or exceeds $700
million as of the end of that year’s second fiscal quarter.
Item 1A. Risk Factors
Summary of Risk Factors
An investment in our securities involves a high degree of risk.
We have provided the following summary of the material risks involved:
Risks Related to our Search for, and Consummation of, Business
Combination Transaction
| ● | If a large number of our shares request to be redeemed for
cash in a proposed business combination, that could increase the probability that our initial business combination would be unsuccessful
and that you would have to wait for liquidation in order to redeem your shares. |
| ● | We may issue notes or other debt securities, or otherwise
incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition. |
| ● | As the number of special purpose acquisition companies evaluating
targets increases, attractive targets may become scarcer and there may be more competition for attractive targets. |
| ● | If we do not complete our initial business combination within
the prescribed time frame, our public shareholders may receive only $10.20 per share, or less, and our warrants will expire worthless. |
| ● | We may seek to amend our amended and restated memorandum
and articles of association or governing instruments, in a manner that will make it easier for us to complete our initial business combination
that some of our shareholders may not support. |
| ● | We may be unable to obtain additional financing to complete
our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon
a particular business combination. |
| ● | Because our sponsor, officers and directors can purchase
additional shares in anticipation of the vote on our initial business combination transaction, they may disproportionately influence
the outcome. |
Risks Relating to the Post-Business Combination Company
| ● | Subsequent to the completion of our initial business combination,
we may be required to take write-downs or write-offs, restructuring and impairment or other charges. |
Risks Relating to our Management Team
| ● | Our key personnel may negotiate employment or consulting
agreements with a target business in connection with a particular business combination, which may cause them to have conflicts of interest
in determining whether a particular business combination is the most advantageous. |
| ● | Since our initial shareholders will lose their entire investment
in us if our initial business combination is not completed, a conflict of interest may arise in determining whether a particular business
combination target is appropriate. |
Risks Relating to our Securities
| ● | Our amended and restated articles of association provide
that unless we consent otherwise, the courts of the Cayman Islands shall have the sole and exclusive jurisdiction for all disputes between
our company and our shareholders under the Companies Act. |
| ● | Provisions in our amended and restated memorandum and articles
of association may inhibit a takeover of us. |
| ● | An investment in our securities may result in uncertain or
adverse U.S. federal income tax consequences. |
An investment in our securities involves a high degree of risk.
You should consider carefully all of the risks described below, together with the other information contained in this Annual Report, before
making a decision to invest in our units, Class A ordinary shares or warrants. If any of the following events occurs, our business, financial
condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline,
and you could lose all or part of your investment.
Risks Relating to our Search for, and Consummation of or Inability
to Consummate, a Business Combination
The ability of our public shareholders to redeem their shares
for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to
enter into a business combination with a target.
We may seek to enter into a business combination transaction agreement
with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many
public shareholders exercise their redemption rights, we would not be able to meet that closing condition and, as a result, would not
be able to proceed with the business combination. In recent months, the rate of redemption of their shares by public shareholders of special
purpose acquisition companies, or SPACs, such as ours at the time of the initial business combination of the SPAC has increased significantly,
thereby increasing the likelihood that we, too, will face a high level of redemptions that will jeopardize our ability to successfully
consummate a business combination. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible
assets to be less than $5,000,001 upon completion of our initial business combination (so that we do not then become subject to the SEC’s
“penny stock” rules), or any greater net tangible asset or cash requirement that may be contained in the agreement relating
to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible
assets to be less than $5,000,001 upon completion of our initial business combination or less than such greater amount necessary to satisfy
a closing condition as described above, we would not proceed with such redemption of our public shares and the related business combination,
and we instead may search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant
to enter into a business combination transaction with us.
The ability of our public shareholders to exercise redemption
rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our
capital structure.
At the time we enter into an agreement for our initial business combination,
we will not know how many shareholders may exercise their redemption rights, and we will therefore need to structure the transaction based
on our expectations as to the number of shares that will be submitted for redemption. If our initial business combination agreement requires
us to use a portion of the cash in the trust account to pay the purchase price or requires us to have a minimum amount of cash at closing,
we will need to reserve a portion of the cash in the trust account to meet such requirements or arrange for third party financing. In
addition, if a larger number of shares are submitted for redemption than we initially expected, we may need to restructure the transaction
to reserve a greater portion of the cash in the trust account or arrange for third party financing. As noted above, the high rates of
redemption of shares of public shareholders of SPACs in recent times increases the likelihood that we, too, will have less cash from our
trust at the time of our initial business combination, thereby forcing us to rely upon outside financing to supplement our cash reserves.
Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable
levels. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize
our capital structure.
The ability of our public shareholders to exercise redemption
rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful
and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination agreement requires us to use a
portion of the cash in the trust account to pay the purchase price or requires us to have a minimum amount of cash at closing, the probability
that our initial business combination would be unsuccessful increases. If our initial business combination is unsuccessful, you would
not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity,
you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to the pro rata amount
per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected
in connection with our redemption until we liquidate or you are able to sell your shares in the open market.
We may be unable to obtain— on reasonable terms or at all—
additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could
compel us to restructure or abandon a particular business combination.
Although we believe that the net proceeds of our initial public offering
and the sale of the private units will be sufficient to allow us to complete our initial business combination, we will need to ascertain
the capital requirements for a particular transaction to determine whether that is the case. If the net proceeds of our initial public
offering and the sale of the private units prove to be insufficient, either because of the size of our initial business combination, the
depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares
from shareholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to
purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the
proposed business combination. We cannot assure you that such financing will be available on acceptable terms, if at all. To the extent
that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to
either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate.
In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to
fund the operations or growth of the target business. The market for financings of initial business combinations of SPACs in recent months
has become very difficult, with financings often available only on terms that are onerous to the surviving company of the business combination.
The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business.
None of our officers, directors or shareholders is required to provide any financing to us in connection with or after our initial business
combination. If we are unable to complete our initial business combination, our public shareholders may only receive approximately $10.20
per share on the liquidation of our trust account, and our warrants will expire worthless. In certain circumstances, our public shareholders
may receive less than $10.20 per share on the redemption of their shares. See “— If third parties bring claims against us,
the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less
than $10.20 per share” and other risk factors below.
We may issue notes or other debt securities, or otherwise incur
substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively
impact the value of our shareholders’ investment in us.
Although we have not committed as of the date of this Annual Report
to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to complete
our initial business combination. We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver
of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect
the per-share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of
negative effects, including:
| ● | default and foreclosure on our assets if our operating revenues
after an initial business combination are insufficient to repay our debt obligations; |
| ● | acceleration of our obligations to repay the indebtedness
even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial
ratios or reserves without a waiver or renegotiation of that covenant; |
| ● | our immediate payment of all principal and accrued interest,
if any, if the debt security is payable on demand; |
| ● | our inability to obtain necessary additional financing if
the debt security contains covenants restricting our ability to obtain such financing while the debt security is issued and outstanding; |
| ● | our inability to pay dividends on our Class A ordinary
shares; |
| ● | using a substantial portion of our cash flow to pay principal
and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses,
capital expenditures, acquisitions and other general corporate purposes; |
| ● | limitations on our flexibility in planning for and reacting
to changes in our business and in the industry in which we operate; |
| ● | increased vulnerability to adverse changes in general economic,
industry and competitive conditions and adverse changes in government regulation; and |
| ● | limitations on our ability to borrow additional amounts for
expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages
compared to our competitors who have less debt. |
The requirement that we complete our initial business combination
within the prescribed time frame may give potential target businesses leverage over us in negotiating a business combination and may limit
the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution
deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders.
Any potential target business with which we enter into negotiations
concerning a business combination is aware that we must complete our initial business combination within 18 months from the closing
date of our initial public offering. Consequently, any such target business may obtain leverage over us in negotiating a business combination,
knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete
our initial business combination with any target business. This risk will increase as we get closer to the end of the 18-month period.
Depending upon when we identify a particular potential target business, we may have limited time to conduct due diligence and may enter
into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
Because the number of special purpose acquisition companies evaluating
targets has increased, attractive targets may become scarcer and there is more competition for attractive targets. This could increase
the cost of our initial business combination and could even result in our inability to find a target or to consummate an initial business
combination.
In recent years and in particular during the last year, the number
of special purpose acquisition companies that have been formed has increased substantially. Many potential targets for special purpose
acquisition companies have already entered into an initial business combination, and there are still many special purpose acquisition
companies seeking targets for their initial business combination, as well as many such companies currently conducting their initial public
offering. As a result, at times, fewer attractive targets may be available, and it may require more time, more effort and more resources
to identify a suitable target and to consummate an initial business combination.
In addition, because there are more special purpose acquisition companies
seeking to enter into an initial business combination with available targets, the competition for available targets with attractive fundamentals
or business models has increased, which could cause targets companies to demand improved financial terms. Attractive deals could also
become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions, or increases in the cost of additional
capital needed to close business combinations or operate targets post-business combination. This could increase the cost of, delay
or otherwise complicate or frustrate our ability to find and consummate an initial business combination, and may result in our inability
to consummate an initial business combination on terms favorable to our investors altogether.
We may not be able to complete our initial business combination
within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem
our public shares and liquidate, in which case our public shareholders may receive only $10.20 per share, or less than such amount in
certain circumstances, and our warrants will expire worthless.
Our sponsor, officers and directors have agreed that we must complete
our initial business combination within 18 months from the closing date of our initial public offering. We may not be able to find
a suitable target business and complete our initial business combination within such time period. Our ability to complete our initial
business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other
risks described herein.
If we are unable to complete our initial business combination within
such 18 month period, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably
possible but not more than 10 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
and 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 liquidating distributions,
if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders
and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide for claims
of creditors and the requirements of other applicable law. In such case, our public shareholders may receive only $10.20 per share, or
less than $10.20 per share, on the redemption of their shares, and our warrants will expire worthless. See “— If third parties
bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by
shareholders may be less than $10.20 per share” and other risk factors herein.
Our public shareholders may not be afforded an opportunity to
vote on our proposed business combination, which means we may complete our initial business combination even though a majority of our
public shareholders do not support such a combination.
We will either (1) seek shareholder approval of our initial business
combination at a general meeting called for such purpose at which public shareholders may elect to redeem their public shares without
voting, and if they do vote, irrespective of whether they vote for or against the proposed business combination, or (2) provide our
public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business
combination by means of a tender offer (and thereby avoid the need for a shareholder vote), in each in cash, for an amount payable in
cash equal to the aggregate amount then on deposit in the trust account as of two business days prior to the completion of our initial
business combination, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding
public shares, subject to the limitations described herein. Accordingly, it is possible that we will consummate our initial business combination
even if holders of a majority of our public shares do not approve of the business combination we consummate. 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. For instance, Nasdaq rules currently allow
us to engage in a tender offer in lieu of a shareholder meeting but would still require us to obtain shareholder approval if we were seeking
to issue more than 20% of our outstanding shares to a target business as consideration in any business combination. Therefore, if we were
structuring a business combination that required us to issue more than 20% of our outstanding shares, we would seek shareholder approval
of such business combination instead of conducting a tender offer.
Your only opportunity to affect the investment decision regarding
a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek
shareholder approval of the business combination.
At the time of your investment in us, you will not be provided with
an opportunity to evaluate the specific merits or risks of one or more target businesses. Since our board of directors may complete a
business combination without seeking shareholder approval, public shareholders may not have the right or opportunity to vote on the business
combination, unless we seek such shareholder approval. Accordingly, if we do not seek shareholder approval, your only opportunity to affect
the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period
of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public shareholders in which we
describe our initial business combination.
We need to comply with the rules of Nasdaq that require our initial
business combination to occur with one or more target businesses having an aggregate fair market value equal to at least 80% of the assets
held in the trust account at the time of the agreement to enter into the initial business combination.
The rules of Nasdaq require that our initial business combination occur
with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the trust account
(excluding taxes payable on the income earned on the trust account) at the time of the agreement to enter into the initial business combination.
This restriction may limit the type and number of companies with which we may complete a business combination. If we are unable to locate
a target business or businesses that satisfy this fair market value test, our public shareholders may receive only approximately $10.20
per share, or less in certain circumstances, on the liquidation of our trust account, and our warrants will expire worthless. If we are
not then listed on Nasdaq for whatever reason, we would not be required to satisfy the foregoing 80% fair market value test and could
complete a business combination with a target business having a fair market value substantially below 80% of the balance in the trust
account.
Our search for a business combination, and any target business
with which we ultimately consummate a business combination, may be materially adversely affected by the coronavirus (COVID-19) pandemic
or by the recent invasion of the Ukraine by Russia.
The coronavirus (COVID-19) pandemic has adversely affected the economies
and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could
be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating
to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel,
vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts
our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including
new information which may emerge concerning the severity of COVID-19, the actions to contain COVID-19 or treat its impact, and
the degree of success, nature and timing of the recovery from it, among others.
In a similar manner, Russia’s recent invasion of the Ukraine
could also have an adverse effect on our ability to consummate a business combination transaction or on the operations of the target business
with which we combine. That invasion may result in increased costs of compliance, restrictions on our target business’ ability to
sell into specific regions, higher volatility in foreign currency exchange rates, increased use of less cost-efficient resources and negative
impacts to our target business. The invasion may also cause a deterioration in general economic conditions, which may adversely impact
our access to financing for the combined company upon the consummation of a business combination, thereby frustrating our ability to effect
that combination.
If the disruptions posed by COVID-19, Russia’s invasion of the
Ukraine, or other matters of global concern continue for a further extensive period of time, our ability to consummate a business
combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely
affected.
If we seek shareholder approval of our initial business combination,
our sponsor, directors, officers, advisors or any of their affiliates may elect to purchase shares or warrants from public shareholders,
which may influence a vote on a proposed business combination and reduce the public “float” of our securities.
If we seek shareholder approval of our initial business combination
and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our initial
shareholders, directors, officers, advisors or any of their affiliates may purchase public shares or public warrants or a combination
thereof in privately negotiated transactions or in the open market either prior to or following the completion of our initial business
combination, although they are under no obligation or duty to do so. Such a purchase may include a contractual acknowledgement that such
shareholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise
its redemption rights. In the event that our sponsor, directors, officers, advisors or any of their affiliates purchase shares in privately
negotiated transactions from public shareholders who have already elected to exercise their redemption rights or submitted a proxy to
vote against our initial business combination, such selling shareholders would be required to revoke their prior elections to redeem their
shares and any proxy to vote against our initial business combination. The price per share paid in any such transaction may be different
than the amount per share a public shareholder would receive if it elected to redeem its shares in connection with our initial business
combination. The purpose of such purchases could be to vote such shares in favor of our initial business combination and thereby increase
the likelihood of obtaining shareholder approval of our initial business combination or to satisfy a closing condition in an agreement
with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,
where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce
the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection
with our initial business combination. This may result in the completion of our initial business combination when it may not otherwise
have been possible. In addition, if such purchases are made, the public “float” of our Class A ordinary shares or public
warrants and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the
quotation, listing or trading of our securities on a national securities exchange.
The securities in which we invest the funds held in the trust
account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption
amount received by public shareholders may be less than $10.20 per share.
The proceeds held in the trust account are invested only in U.S. government
treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under
the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury
obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks
in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled
out the possibility that it may in the future adopt similar policies in the United States. In the event that we are unable to complete
our initial business combination or make certain amendments to our amended and restated articles of association, our public shareholders
are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income, net of taxes paid
or payable (less, in the case we are unable to complete our initial business combination, $100,000 of interest). Negative interest rates
could reduce the value of the assets held in trust such that the per-share redemption amount received by public shareholders may
be less than $10.20 per share.
You will not be entitled to protections normally afforded to
investors of many other blank check companies.
Since the net proceeds of our initial public offering and the sale
of the private warrants are intended to be used to complete an initial business combination with a target business that has not been identified,
we may be deemed to be a “blank check” company under the United States securities laws. However, because we have net
tangible assets in excess of $5,000,000 upon the completion of our initial public offering and the sale of the private warrants and have
filed a Current Report on Form 8-K that provided an audited balance sheet demonstrating this fact, we are exempt from rules
promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors are not be afforded
the benefits or protections of those rules. Among other things, this means our units are immediately tradable and we have a longer period
of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if our initial public offering
were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless
and until the funds in the trust account were released to us in connection with our completion of an initial business combination.
If we seek shareholder approval of our initial business combination
and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders are deemed to
hold in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 15% of our
Class A ordinary shares.
If we seek shareholder approval of our initial business combination
and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended
and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder
or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the
Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in our initial
public offering, which we refer to as the “Excess Shares,” without our prior consent. However, we would not be restricting
our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and
you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will
not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as a result,
you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your
shares in open market transactions, potentially at a loss.
Because of our limited resources and the significant competition
for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are unable
to complete our initial business combination, our public shareholders may receive only approximately $10.20 per share, or less in certain
circumstances, on our redemption of their shares, and our warrants will expire worthless.
We expect to encounter intense competition from other entities having
a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check
companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals
and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions
of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and
other resources or more local industry knowledge than we do, and our financial resources will be relatively limited when contrasted with
those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds
from our initial public offering and the sale of the private warrants, our ability to compete with respect to the acquisition of certain
target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others
an advantage in pursuing the acquisition of certain target businesses. Furthermore, if we are obligated to pay cash for the Class A
ordinary shares redeemed and, in the event we seek shareholder approval of our initial business combination, we make purchases of our
Class A ordinary shares, potentially reducing the resources available to us for our initial business combination. Any of these obligations
may place us at a competitive disadvantage in successfully negotiating a business combination. If we are unable to complete our initial
business combination, our public shareholders may receive only approximately $10.20 per share (or less in certain circumstances) on the
liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public shareholders may receive
less than $10.20 per share on the redemption of their shares. See “— If third parties bring claims against us, the proceeds
held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.20 per
share” and other risk factors herein.
Because the net proceeds from our initial public offering being
held in the trust account may be insufficient to allow us to operate for a full period of 18 months, that could limit the amount
available to fund our search for a target business or businesses and complete our initial business combination, and we may depend on loans
from our sponsor or management team to fund those activities.
The funds available to us outside of the trust account may be insufficient
to allow us to operate for the full 18 months following our initial public offering. Of the net proceeds from our initial public
offering and the sale of the private warrants, as of December 31, 2021, only approximately $975,000 was available to us outside of the
trust account to fund our working capital requirements, after payment of approximately $1,128,000 of offering expenses and $137,000 of
operating expenses.
We are incurring significant costs in pursuit of our acquisition plans.
Management’s plans to address this need for capital through the capital raised by our initial public offering and potential loans
from certain of our affiliates are discussed in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results
of Operations” of this Annual Report. In particular, our sponsor and its three primary limited partners have committed to funding
up to $450,000 in working capital prior to our initial business combination by way of loans that may be converted by them (at their election)
into warrants to purchase Class A ordinary shares. However, if that funding does not suffice for our working capital purposes, we would
need to raise additional financing from unaffiliated parties in order to fund our expenses. Any such external financing could be repaid
only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. We may
not be able to obtain such external financing. Any lack of financing may negatively impact our ability to consummate our initial business
combination transaction.
Of the funds available to us, we may use a portion of the funds available
to us to pay fees to consultants to assist us with our search for a target business. We may also use a portion of the funds as a down
payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses from “shopping”
around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed
business combination, although we do not have any current intention to do so. If we enter into a letter of intent where we paid for the
right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach
or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.
If we are unable to complete our initial business combination because
we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In that case,
our public shareholders may receive only approximately $10.20 per share on the liquidation of our trust account, and our warrants will
expire worthless. In certain circumstances, our public shareholders may receive less than $10.20 per share on the redemption of their
shares. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption
amount received by shareholders may be less than $10.20 per share” and other risk factors herein.
If third parties bring claims against us, the proceeds held in
the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.20 per share.
Our placing of funds in the trust account may not protect those funds
from third-party claims against us. Although we seek to have all vendors, service providers (other than our independent auditors),
prospective target businesses or other entities with which we do business execute agreements with us waive any right, title, interest
or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, such parties may not execute
such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including,
but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the
enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds
held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account,
our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that
has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us
than any alternative.
Examples of possible instances where we may engage a third party that
refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed
by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management
is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to
waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and
will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to complete our
initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our initial
business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against
us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public shareholders could
be less than the $10.20 per share initially held in the trust account, due to claims of such creditors.
Our sponsor has agreed that it will be liable to us if and to the extent
any claims by a vendor (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) $10.20
per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust
account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except
as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any
claims under our indemnity of the underwriters as part 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. Accordingly, our sponsor may not have sufficient funds available to satisfy those obligations. We have not asked our sponsor
to reserve for such obligations, and therefore, no funds are currently set aside to cover any such obligations. As a result, if any such
claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could
be reduced to less than $10.20 per public share. In such event, we may not be able to complete our initial business combination, and you
would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers or directors
will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
If our sponsor fulfills its foregoing indemnity obligations, but then
seeks indemnity for those obligations from us or from the surviving entity in a business combination transaction, that could reduce the
consideration payable to you in any such business combination transaction.
Our directors may decide not to enforce the indemnification obligations
of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public shareholders.
In the event that the proceeds in the trust account are reduced below
the lesser of (i) $10.20 per public share or (ii) such lesser amount per 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, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a
particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification
obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce
its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose
not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount
of funds in the trust account available for distribution to our public shareholders may be reduced below $10.20 per share.
If, before distributing the proceeds in the trust account to
our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against
us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per-share
amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust account to our public
shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against
us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or insolvency laws, and may
be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To
the extent any bankruptcy or insolvency claims deplete the trust account, the per-share amount that would otherwise be received by
our shareholders in connection with our liquidation may be reduced.
If, after we distribute the proceeds in the trust account to
our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against
us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our board of directors
may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us
to claims of punitive damages.
If, after we distribute the proceeds in the trust account to our public
shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against
us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy
or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy
or insolvency court could seek to recover all amounts received by our shareholders. In addition, our board of directors may be viewed
as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive
damages, by paying public shareholders from the trust account prior to addressing the claims of creditors.
If we are deemed to be an investment company under the Investment
Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it
difficult for us to complete our initial business combination.
If we are deemed to be an investment company under the Investment Company
Act of 1940, as amended, (or the Investment Company Act), our activities may be restricted, including:
| ● | restrictions on the nature of our investments; and |
| ● | restrictions on the issuance of securities; |
each of which may make it difficult for us to complete our initial
business combination.
In addition, we may have imposed upon us burdensome requirements, including:
| ● | registration as an investment company; |
| ● | adoption of a specific form of corporate structure; and |
| ● | reporting, record keeping, voting, proxy and disclosure requirements
and other rules and regulations that we are currently not subject to. |
We do not believe that our anticipated principal activities will subject
us to the Investment Company Act. The proceeds held in the trust account may be invested by the trustee only in United States government
treasury bills with a maturity of 185 days or less or in money market funds investing solely in United States Treasuries and
meeting certain conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the proceeds will be
restricted to these instruments, we believe we will meet the requirements for the exemption provided in Rule 3a-1 promulgated
under the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory
burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination.
If we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.20 per share,
or less in certain circumstances, on the liquidation of our trust account, and our warrants will expire worthless.
Changes in laws or regulations, or a failure to comply with any
laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination,
and results of operations.
We are subject to laws and regulations enacted by national, regional
and local governments. In particular, we are required to comply with certain SEC and other legal requirements. Compliance with, and monitoring
of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and
application may also change from time to time and those changes could have a material adverse effect on our business, investments and
results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a
material adverse effect on our business, including our ability to negotiate and complete our initial business combination, and results
of operations.
Our shareholders may be held liable for claims by third parties
against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an insolvent liquidation, any distributions
received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution
was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to
recover some or all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary
duties to us or our creditors and/or may have acted in bad faith, and thereby exposing themselves and our company to claims, 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. We and our directors and officers who knowingly and willfully authorized or permitted any distribution to
be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business would
be guilty of an offence and may be liable to a fine of up to $18,292 and to imprisonment for five years in the Cayman Islands.
We may not hold an annual general meeting until after the completion
of our initial business combination. Our public shareholders do not have the right to appoint directors prior to the consummation of our
business combination and do not have the right to call a general meeting.
In accordance with Nasdaq corporate governance requirements, we are
not required to hold an annual general meeting until one year after our first fiscal year end following our listing on Nasdaq. There is
no requirement under the Companies Act for us to hold annual or extraordinary general meetings to appoint directors. Until we hold an
annual general meeting, public shareholders may not be afforded the opportunity to discuss company affairs with management. As holders
of our Class A ordinary shares, our public shareholders also do not have the right to vote on the appointment of directors prior
to completion of our initial business combination. In addition, during that time period, holders of a majority of our founders shares
may remove a member of the board of directors for any reason. Under our amended and restated articles of association, our shareholders
furthermore do not have the right to call a general meeting.
Because we are not limited to any specific target businesses
with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’
operations.
While we are focused upon a combination with technology-based healthcare
businesses that are domiciled in Israel, that carry out all or a substantial portion of their activities in Israel, or that have some
other significant Israeli connection, we nevertheless may pursue acquisition opportunities in any one of numerous industries or geographic
locations. We are not, however, under our amended and restated memorandum and articles of association, permitted to effectuate our business
combination with another blank check company or similar company with nominal operations. To the extent we complete our business combination,
we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially
unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business
and operations of a financially unstable or an early-stage entity. Although our officers and directors will endeavor to evaluate
the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant
risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control
and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot
assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity
were available, in a business combination target. Accordingly, any shareholders who choose to remain shareholders following the business
combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction
in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of
care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the tender
offer materials or proxy statement relating to the business combination contained an actionable material misstatement or material omission.
Although we have identified general criteria and guidelines that
we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target
that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination
may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria and guidelines for evaluating
prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not
have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of
these guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria
and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and
guidelines, a greater number of shareholders may exercise their redemption rights, which may make it difficult for us to meet any closing
condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if shareholder
approval of the transaction is required by law, or we decide to obtain shareholder approval for business or other legal reasons, it may
be more difficult for us to attain shareholder approval of our initial business combination if the target business does not meet our general
criteria and guidelines. If we are unable to complete our initial business combination, our public shareholders may receive only approximately
$10.20 per share on the liquidation of our trust account and our warrants will expire worthless.
We are not required to obtain an opinion from an independent
investment banking firm or from another independent entity that commonly renders valuation opinions, and consequently, you may have no
assurance from an independent source that the price we are paying for the business is fair to our company from a financial point of view.
Unless we complete our initial business combination with an affiliated
entity, we are not required to obtain an opinion from an independent investment banking firm, or from another independent entity that
commonly renders valuation opinions, that the price we are paying is fair to our company from a financial point of view. If no opinion
is obtained, our shareholders will be relying on the judgment of our board of directors, who will determine fair market value based on
standards generally accepted by the financial community. Such standards used will be disclosed in our tender offer documents or proxy
solicitation materials, as applicable, related to our initial business combination.
We may only be able to complete one business combination with
the proceeds from our initial public offering and the sale of the private warrants, which will cause us to be solely dependent on a single
business which may have a limited number of products or services. This lack of diversification may negatively impact our operations and
profitability.
Of the net proceeds from our initial public offering and the sale of
the private warrants, initially $130,142,000, along with up to $450,000 from loans that our sponsor and its three primary limited partners
have committed to providing to us, as may be reduced significantly due to redemptions by our public shareholders, is available to complete
our business combination and pay related fees and expenses (which fees will include approximately $4,427,500 for the payment of a deferred
underwriting fee to Oppenheimer and Moelis). As of December 31, 2021, the portion of the foregoing funds that is available to us outside
of our trust account, and which may be used for working capital and towards our pursuit of a business combination, was approximately $975,000.
We may effectuate our initial business combination with a single target
business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our
initial business combination with more than one target business because of various factors, including the existence of complex accounting
issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the
financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business
combination with only a single entity our lack of diversification may subject us to numerous economic, competitive and regulatory risks.
Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike
other entities which may have the resources to complete several business combinations in different industries or different areas of a
single industry.
Accordingly, the prospects for our success may be:
| ● | solely dependent upon the performance of a single business,
property or asset; or |
| ● | dependent upon the development or market acceptance of a
single or limited number of products, processes or services. |
This lack of diversification may subject us to numerous economic, competitive
and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent
to our initial business combination.
We may attempt to simultaneously complete business combinations
with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased
costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several businesses that are
owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous
closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business
combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect
to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated
with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business.
If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may seek acquisition opportunities with an early-stage company,
a financially unstable business or an entity lacking an established record of revenue or earnings.
To the extent we complete our initial business combination with an
early-stage company, a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected
by numerous risks inherent in the operations of the business with which we combine. These risks include investing in a business without
a proven business model and with limited historical financial data, volatile revenues or earnings, intense competition and difficulties
in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent in a particular
target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not have adequate time
to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce
the chances that those risks will adversely impact a target business.
We may attempt to complete our initial business combination with
a private company about which little information is available, which may result in a business combination with a company that is not as
profitable as we suspected, if at all.
In pursuing our acquisition strategy, we may seek to effectuate our
initial business combination with a privately held company. Very little public information generally exists about private companies, and
we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information,
which may result in a business combination with a company that is not as profitable as we suspected, if at all.
We do not have a specified maximum redemption threshold. The
absence of such a redemption threshold may make it possible for us to complete a business combination with which a substantial majority
of our shareholders do not agree.
Our amended and restated memorandum and articles of association do
not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would
cause our net tangible assets to be less than $5,000,001 either immediately prior to or upon completion of our initial business combination
(such that we do not then become subject to the SEC’s “penny stock” rules), or any greater net tangible asset or cash
requirement that may be contained in the agreement relating to our initial business combination. As a result, we may be able to complete
our initial business combination even though a substantial majority of our public shareholders do not agree with the transaction and have
redeemed their shares or, if we seek shareholder approval of our initial business combination and do not conduct redemptions in connection
with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their
shares to our sponsor, officers, directors, advisors, any of their affiliates. We or our sponsor may also engage a third-party purchaser
to make such purchases from shareholders who would otherwise redeem their shares, in order to maintain our public float and qualify for
listing our shares on Nasdaq upon consummation of our initial business combination. In the event the aggregate cash consideration we would
be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy
cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will
not complete the business combination or redeem any shares, all Class A ordinary shares submitted for redemption will be returned
to the holders thereof, and we instead may search for an alternate business combination.
In
order to effectuate an initial business combination, blank check companies have, in the past, amended various provisions of their charters
and modified governing instruments. We cannot assure you that we will not seek to amend our amended and restated memorandum and articles
of association or governing instruments, in a manner that will make it easier for us to complete our initial business combination that
some of our shareholders may not support.
In
order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their
charters and modified governing instruments. For example, blank check companies have amended the definition of business combination,
increased redemption thresholds and extended the time to consummate an initial business combination. Amending our amended and restated
memorandum and articles of association requires at least a special resolution of our shareholders as a matter of Cayman Islands law.
A resolution is deemed to be a special resolution as a matter of Cayman Islands law where it has been approved by either (1) at
least two-thirds (or any higher threshold specified in a company’s articles of association) of a company’s shareholders
at a general meeting for which notice specifying the intention to propose the resolution as a special resolution has been given or (2) if
so authorized by a company’s articles of association, by a unanimous written resolution of all of the company’s shareholders.
Our amended and restated memorandum and articles of association provide that special resolutions must be approved either by at least
two-thirds of our shareholders who attend and vote at a shareholders meeting (i.e., the lowest threshold permissible under Cayman
Islands law) (other than amendments relating to the appointment or removal of directors prior to our initial business combination, which
require the approval of the holders of at least 90% of our ordinary shares as, being entitled to do so, vote in a general meeting), or
by a unanimous written resolution of all of our shareholders. We cannot assure you that we will not seek to amend our amended and restated
memorandum and articles of association or governing instruments or extend the time to consummate an initial business combination in order
to effectuate our initial business combination.
The
provisions of our amended and restated memorandum and articles of association that relate to our pre-business combination activity may
be amended with the approval of holders of at least two-thirds of our ordinary shares that, being entitled to do so, attend and vote
at a general meeting, and corresponding provisions of the agreement governing the release of funds from our trust account may be amended
with the approval of holders of at least 65% of our then outstanding ordinary shares who attend and vote at a general meeting, which
is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended
and restated memorandum and articles of association and the trust agreement to facilitate the completion of an initial business combination
that some of our shareholders may not support.
Some
other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those
which relate to a company’s pre-business combination activity, without approval by holders of a certain percentage of the
company’s shares. In those companies, amendment of these provisions typically requires approval by holders holding between 90%
and 100% of the company’s public shares. Our amended and restated memorandum and articles of association provide that any of their
provisions, including those related to pre-business combination activity (including the requirement to deposit proceeds of our initial
public offering and the private placement of units into the trust account and not release such amounts except in specified circumstances),
may be amended if approved by holders of at least two-thirds of our ordinary shares who, being entitled to do so, attend and vote
in a general meeting (amendments relating to the appointment or removal of directors prior to our initial business combination instead
require the approval of at least 90% of our shares voting in a general meeting). Corresponding provisions of the trust agreement governing
the release of funds from our trust account may be amended if approved by holders of 65% of our then outstanding ordinary shares. Our
initial shareholders, who collectively beneficially own 20% of our shares, may participate in any vote to amend our amended and restated
memorandum and articles of association (other than any amendment materially adversely impacting our public shares) and/or trust agreement
and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and
restated memorandum and articles of association which govern our pre-business combination behavior more easily than some other blank
check companies, and this may increase our ability to complete our initial business combination with which you do not agree. However,
our amended and restated memorandum and articles of association prohibit any amendment of their provisions (A) that would affect
our public shareholders’ ability to convert 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 if we do not
complete our initial business combination within 18 months from the closing date of our initial public offering or (B) with
respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless we provide
public shareholders with the opportunity to redeem their public shares. Furthermore, our sponsor, officers and directors have agreed,
pursuant to a written agreement with us, that they will not propose such an amendment unless we provide our public shareholders with
the opportunity to redeem their public shares. In certain circumstances, our shareholders may pursue remedies against us for any breach
of our amended and restated memorandum and articles of association.
We
may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of
at least a majority of the then outstanding public warrants.
Our
warrants have been issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as
warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder
to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least a majority of the then
outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly,
we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least a majority of the then outstanding
public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least
a majority of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things,
increase the exercise price of the warrants, shorten the exercise period or decrease the number of Class A ordinary shares purchasable
upon exercise of a warrant.
Certain
agreements related to our initial public offering may be amended without shareholder approval.
Certain
agreements, including the underwriting agreement relating to our initial public offering, the investment management trust agreement between
us and Continental Stock Transfer & Trust Company (other than provisions contained therein governing the release of funds from
our trust account), the letter agreement among us and our sponsor, officers and directors, the registration rights agreement between
us and our sponsor, and the administrative and support services agreement between us and our sponsor, may be amended without shareholder
approval. These agreements contain various provisions that our public shareholders might deem to be material. For example, the underwriting
agreement related to our initial public offering contained a covenant that the target company that we acquire must have a fair market
value equal to at least 80% of the balance in the trust account at the time of signing the definitive agreement for the transaction with
such target business (excluding (i) the deferred underwriting compensation to be paid to Oppenheimer and Moelis upon the consummation
of that transaction and (ii) taxes payable on the income earned on the trust account) so long as we maintain a listing for our securities
on the Nasdaq. While we do not expect our board to approve any amendment to any of these agreements prior to our initial business combination,
it may be possible that our board, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or
more amendments to any such agreement in connection with the consummation of our initial business combination. Any such amendment may
have an adverse effect on the value of an investment in our securities.
Because
we must furnish our shareholders with target business financial statements, we may lose the ability to complete an otherwise advantageous
initial business combination with some prospective target businesses.
The
federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance
tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement
disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial
statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States
of America, or U.S. GAAP, or international financing reporting standards as issued by the International Accounting Standards Board, or
IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards
of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit the
pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for
us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination within
the prescribed time frame.
Compliance
obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial
financial and management resources, and increase the time and costs of completing an acquisition.
Section 404
of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report
on Form 10-K for the year ending December 31, 2022. Only in the event we are deemed to be a large accelerated filer or
an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered
public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an
emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation requirement
on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of
the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target company with which we
seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding
adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act
may increase the time and costs necessary to complete any such acquisition.
Resources
could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate
and acquire or merge with another business. If we are unable to complete our initial business combination, our public shareholders may
receive only approximately $10.20 per share, or less than such amount in certain circumstances, on the liquidation of our trust account
and our warrants will expire worthless.
The
investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents
and other instruments requires substantial management time and attention and substantial costs for accountants, attorneys and others.
If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction
likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete
our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to
us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another
business. If we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.20
per share on the liquidation of our trust account and our warrants will expire worthless. See “— If third parties bring claims
against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders
may be less than $10.20 per share” and other risk factors.
Risks
Relating to the Post-Business Combination Company
If
we effect a business combination with a company located in Israel or another foreign jurisdiction, we would be subject to a variety of
additional risks that may negatively impact our operations.
If
we pursue a target company with operations or opportunities in Israel or elsewhere outside of the United States for our initial
business combination, we may face additional burdens in connection with investigating, agreeing to and completing such initial business
combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively
impact our operations.
If
we pursue a target a company with operations or opportunities in Israel or elsewhere outside of the United States for our initial
business combination, we would be subject to risks associated with cross-border business combinations, including in connection with
investigating, agreeing to and completing our initial business combination, conducting due diligence in a foreign jurisdiction, having
such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in
foreign exchange rates. If we effect our initial business combination with such a company, we would be subject to any special considerations
or risks associated with companies operating in an international setting, including any of the following:
| ● | costs
and difficulties inherent in managing cross-border business operations; |
| ● | rules
and regulations regarding currency redemption; |
| ● | complex
corporate withholding taxes on individuals; |
| ● | laws
governing the manner in which future business combinations may be effected; |
| ● | exchange
listing and/or delisting requirements; |
| ● | tariffs
and trade barriers; |
| ● | regulations
related to customs and import/export matters; |
| ● | local
or regional economic policies and market conditions; |
| ● | transparency
issues in general and, more specifically, the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and other anti-corruption compliance
laws and issues; |
| ● | unexpected
changes in regulatory requirements; |
| ● | challenges
in managing and staffing international operations; |
| ● | tax
issues, such as tax law changes and variations in tax laws as compared to the United States; |
| ● | currency
fluctuations and exchange controls; |
| ● | challenges
in collecting accounts receivable; |
| ● | cultural
and language differences; |
| ● | underdeveloped
or unpredictable legal or regulatory systems; |
| ● | protection
of intellectual property; |
| ● | social
unrest, crime, strikes, riots and civil disturbances; |
| ● | regime
changes and political upheaval; |
| ● | terrorist
attacks and wars; |
| ● | adverse
impacts from Russia’s invasion of Ukraine, including increased use of less cost-efficient resources and exacerbation of existing
international supply chain back-ups; and |
| ● | deterioration
of political relations with the United States. |
We
may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such initial business
combination, or, if we complete such initial business combination, our operations might suffer, either of which may adversely impact
our business, financial condition and results of operations.
If
our management following our initial business combination is unfamiliar with United States securities laws, they may have to expend
time and resources becoming familiar with such laws, which could lead to various regulatory issues.
Following
our initial business combination, any or all of our management could resign from their positions as officers of the Company, and the
management of the target business at the time of the business combination will remain in place. Management of the target business may
not be familiar with United States securities laws. If new management is unfamiliar with United States securities laws, they
may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead
to various regulatory issues which may adversely affect our operations.
After
our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue
will be derived from our operations in such country. Accordingly, our results of operations and prospects will be subject, to a significant
extent, to the economic, political and legal policies, developments and conditions in the country in which we operate.
The
economic, political and social conditions, as well as government policies, of the country in which our operations are located could affect
our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such growth may not be
sustained in the future. If in the future such country’s economy experiences a downturn or grows at a slower rate than expected,
there may be less demand for spending in certain industries. A decrease in demand for spending in certain industries could materially
and adversely affect our ability to find an attractive target business with which to consummate our initial business combination and
if we effect our initial business combination, the ability of that target business to become profitable.
Exchange
rate fluctuations and currency policies may diminish a target business’ ability to succeed in the international markets.
In
the event we acquire a non-U.S. target, such as an Israel-centered entity, as we are planning to do, a substantial portion of revenues
and income of the target business may be received in a foreign currency, as well as a substantial portion of its expenses paid in a foreign
currency, whereas its financial results will likely be recorded in U.S. dollars. As a result, the target business’ financial results
could be adversely affected by fluctuations in the value of local currencies relative to the U.S. dollar. The value of the currency in
our target region — Israel — fluctuates relative to the U.S. dollar and is affected by, among other things, changes in political
and economic conditions. Any change in the relative value of that currency against our reporting currency may affect the attractiveness
of any target business or, following consummation of our initial business combination, our financial condition and results of operations.
Additionally, if a currency such as the Israeli currency (the New Israeli Shekel) appreciates in value against the U.S. dollar prior
to the consummation of our initial business combination, the cost of a target business as measured in dollars will increase, which may
make it less likely that we are able to consummate a transaction with that business.
Subsequent
to the completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment
or other charges that could have a significant negative effect on our financial condition, results of operations and our share price,
which could cause you to lose some or all of your investment.
Even
though we conduct extensive due diligence on a potential target business with which we may combine, we cannot assure you that this diligence
will identify all material issues that may be present with a particular target business, that it would be possible to uncover all material
issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not
later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations,
or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain
risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis.
Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges
of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause
us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target
business or by virtue of our obtaining post-combination debt financing. Accordingly, any shareholder or warrant holder who chooses
to remain a shareholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities.
Such shareholders and warrant holders are unlikely to have a remedy for such reduction in value.
We
may have limited ability to assess the management of a prospective target business and, as a result, may effect our initial business
combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
When
evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the
target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities
we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company,
the operations and profitability of the post-combination business may be negatively impacted. Accordingly, shareholders or warrant
holders who choose to remain shareholders or warrant holders following our initial business combination could suffer a reduction in the
value of their securities. Such shareholders or warrant holders are unlikely to have a remedy for such reduction in value.
The
officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The departure of a
business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained
at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated
with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition
candidate will not wish to remain in place.
Our
management may not be able to maintain control of a target business after our initial business combination. We cannot provide assurance
that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably
operate such business.
We
may structure a business combination so that the post-transaction company in which our public shareholders own shares will own less
than 100% of the equity interests or assets of a target business, but we will only complete such business combination if the post-transaction company
owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest
in the target sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not
consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities
of the target, our shareholders prior to the business combination may collectively own a minority interest in the post business combination
company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue
a transaction in which we issue a substantial number of new Class A ordinary shares in exchange for all of the issued and outstanding
capital stock, shares and/or other equity interests of a target. In this case, we would acquire a 100% interest in the target. However,
as a result of the issuance of a substantial number of new ordinary shares, our shareholders immediately prior to such transaction could
own less than a majority of our issued and outstanding ordinary shares subsequent to such transaction. In addition, other minority shareholders
may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s shares
than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain our control of
the target business.
Risks
Relating to our Management Team
Our
ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon the efforts
of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively
impact the operations and profitability of our post-combination business.
Our
ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel, including Nachum
(Homi) Shamir, our Chairman of the Board, Ofer Gonen, our CEO, and Stephen T. Wills, our CFO. The role of our key personnel in
the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business
in senior management, board member or advisory positions following our initial business combination, it is likely that some or all of
the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our
initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals
may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and
resources helping them become familiar with such requirements.
In
addition, the officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The
departure of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained
at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated
with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition
candidate will not wish to remain in place. The loss of key personnel could negatively impact the operations and profitability of our
post-combination business.
Our
key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination.
These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them
to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Our
key personnel may be able to remain with the company after the completion of our initial business combination only if they are able to
negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously
with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments
and/or our securities for services they would render to us after the completion of the business combination. The personal and financial
interests of such individuals may influence their motivation in identifying and selecting a target business, subject to their fiduciary
duties under Cayman Islands law. However, we believe the ability of such individuals to remain with us after the completion of our initial
business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business
combination. There is no certainty, however, that any of our key personnel will remain with us after the completion of our initial business
combination. We cannot assure you that any of our key personnel will remain in senior management or advisory positions with us. The determination
as to whether any of our key personnel will remain with us will be made at the time of our initial business combination.
We
may seek acquisition opportunities in industries or sectors that may be outside of our management’s areas of expertise.
We
will consider a business combination outside of our management’s areas of expertise if a business combination candidate is presented
to us and we determine that such candidate offers an attractive acquisition opportunity for our company. In the event we elect to pursue
an acquisition outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable
to its evaluation or operation, and the information contained in this Annual Report regarding the areas of our management’s expertise
would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately
ascertain or assess all of the significant risk factors. Accordingly, any shareholders who choose to remain shareholders following our
initial business combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for
such reduction in value.
Past
performance by the companies in which our management team and our sponsor’s members and affiliates have been involved may not be
indicative of future performance of an investment in us.
Information
regarding performance by, or businesses associated with, our management team and sponsor’s members and affiliates is presented
for informational purposes only. Past performance by our management team and sponsor’s members and affiliates is not a guarantee
either (i) of success with respect to any business combination we may consummate or (ii) that we will be able to locate a suitable
candidate for our initial business combination. You should not rely on the historical record of our management team and sponsor’s
members and affiliates as indicative of our future performance and you may lose all or part of your invested capital. Additionally, in
the course of their respective careers, members of our management team and our sponsor’s members and affiliates have been involved
in businesses and deals that were unsuccessful. None of our officers, directors or the partners or affiliates of our sponsor have had
management experience with blank check companies or special purpose acquisition corporations in the past.
Certain
of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities
similar to those conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business
opportunity should be presented.
Until
we consummate our initial business combination, we engage in the business of identifying and combining with one or more businesses. Our
sponsor and officers and directors are, or may in the future become, affiliated with entities such as operating companies or investment
vehicles that are engaged in making and managing investments in similar businesses.
Our
officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the other
entities to which they owe certain fiduciary or contractual duties. Accordingly, they may have conflicts of interest in determining to
which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential
target business may be presented to other entities prior to its presentation to us, subject to his or her fiduciary duties under Cayman
Islands law.
For
a complete discussion of our officers’ and directors’ business affiliations and the potential conflicts of interest that
you should be aware of, please see “Item 10. Directors, Executive Officers and Corporate Governance,” and “Item 13.
Certain Relationships and Related Transactions, and Director Independence.”
We
may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated
with our sponsor, officers, directors or initial shareholders which may raise potential conflicts of interest.
In
light of the involvement of our sponsor, officers and directors with other entities, we may decide to acquire one or more businesses
affiliated with our sponsor, officers and directors. Our officers and directors also serve as officers and board members for other entities,
including, without limitation, those described under “Item 13. Certain Relationships and Related Transactions, and Director Independence.”
Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination
with any entities with which they are affiliated, and there have been no preliminary discussions concerning a business combination with
any such entity or entities.
Although
we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction
if we determined that such affiliated entity met our criteria for a business combination as set forth in “Item 1. Business —
Effecting a Business Combination — Selection of a Target Business and Structuring of a Business Combination” and such transaction
was approved by a majority of our independent and disinterested directors
Since
our initial shareholders will lose their entire investment in us if our initial business combination is not completed (other than with
respect to any public shares they may acquire), a conflict of interest may arise in determining whether a particular business combination
target is appropriate for our initial business combination.
Prior
to our initial public offering, our sponsor purchased an aggregate of 2,875,000 founders shares for an aggregate purchase price of $25,000.
Prior to the initial investment in the company of $25,000 by our sponsor, the company had no assets, tangible or intangible. In October
2021, we effected a share dividend of 0.1 shares for each share then outstanding, thereby resulting in 3,162,500 Class B ordinary
shares outstanding and held by our sponsor. Simultaneously with the closing of our initial public offering, our sponsor purchased warrants
to purchase an additional 4,866,667 Class A ordinary shares. Disregarding the additional Class A ordinary shares underlying
those warrants (and the shares underlying warrants sold in our initial public offering as part of the units), our sponsor owns 20.0%
of our issued and outstanding shares. The founders shares will be worthless if we do not complete an initial business combination. The
founders shares — which are Class B ordinary shares — are identical to the Class A ordinary shares included in
the units as part of our initial public offering except that until the consummation of our initial business combination transaction,
only the founders shares have the right to vote on the appointment of directors. In addition, both the founders (Class B ordinary)
shares and the private (Class A ordinary) warrants (and shares underlying those warrants) purchased by the sponsor concurrently
with the offering are subject to certain transfer restrictions (unlike public shares). Furthermore, our sponsor, officers and directors
have entered into a letter agreement with us, pursuant to which they have agreed (A) to waive their redemption rights with respect
to their shares in connection with the completion of our initial business combination and (B) to waive their rights to liquidating
distributions from the trust account with respect to their founders and private shares if we fail to complete our initial business combination
within 18 months from the closing date of our initial public offering (although they will be entitled to liquidating distributions
from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the
prescribed time frame), as described herein and in our amended and restated memorandum and articles of association.
The
personal and financial interests of our sponsor, officers and directors may influence their motivation in identifying and selecting a
target business combination, completing an initial business combination and influencing the operation of the business following the initial
business combination. This risk may become more acute as the 18-month deadline following the closing date of our initial public
offering nears, which is the deadline for the completion of our initial business combination.
Since
our sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any bona-fide, documented out-of-pocket
expenses if our initial business combination is not completed, a conflict of interest may arise in determining whether a particular business
combination target is appropriate for our initial business combination.
At
the closing of our initial business combination, our sponsor, officers and directors, or any of their respective affiliates, will be
reimbursed for any bona-fide, documented out-of-pocket expenses incurred in connection with activities on our behalf such as identifying
potential target businesses and performing due diligence on suitable business combinations. There is no cap or ceiling on the reimbursement
of out-of-pocket expenses incurred in connection with activities on our behalf. In addition, our sponsor may seek certain indemnities
from us or from the surviving entity in our initial business combination. These financial interests of our sponsor, officers and directors
may influence their motivation in identifying and selecting a target business combination and completing an initial business combination,
even if it is not in the best interests of our other shareholders.
Changes
in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and
complete an initial business combination.
In
the recent period of time, the market for directors and officers liability insurance for special purpose acquisition companies has changed.
The premiums charged for such policies have generally increased and the terms of such policies have generally become less favorable.
There can be no assurance that these trends will not continue.
The
increased cost and decreased availability of directors and officers liability insurance could make it more difficult and more expensive
for us to negotiate an initial business combination. In order to obtain directors and officers liability insurance or modify its coverage
as a result of becoming a public company, the post-business combination entity might need to incur greater expense, accept less
favorable terms or both. However, any failure to obtain adequate directors and officers liability insurance could have an adverse impact
on the post-business combination’s ability to attract and retain qualified officers and directors.
In
addition, even after we were to complete an initial business combination, our directors and officers could still be subject to potential
liability from claims arising from conduct alleged to have occurred prior to the initial business combination. As a result, in order
to protect our directors and officers, the post-business combination entity will likely need to purchase additional insurance with
respect to any such claims (“run-off insurance”). The need for run-off insurance would be an added expense for
the post-business combination entity and could interfere with or frustrate our ability to consummate an initial business combination
on terms favorable to our investors.
Risks
Relating to our Securities
You
will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your
investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss.
Our
public 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 amend our amended and restated memorandum and articles of association (A) 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 18 months from the closing date of our initial public offering,
subject to applicable law and as further described herein. In no other circumstances will a shareholder have any right or interest of
any kind in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to
the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
Nasdaq
may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities
and subject us to additional trading restrictions.
Our
units are listed on Nasdaq. Our Class A ordinary shares and warrants have also been listed separately on Nasdaq. Although we expected
to meet on a pro forma basis Nasdaq’s minimum initial listing standards after our initial public offering, which generally only
require that we meet certain requirements relating to market capitalization, aggregate market value of publicly held shares and distribution
requirements, we cannot assure you that our securities will continue to be listed on Nasdaq in the future or prior to our initial business
combination. In order to continue listing our securities on Nasdaq prior to our initial business combination, we must maintain certain
financial, distribution and share price levels. Additionally, in connection with our initial business combination, it is likely that
Nasdaq will require us to file a new initial listing application and meet its initial listing requirements as well as certain qualitative
requirements, as opposed to its more lenient continued listing requirements. We cannot assure you that we will be able to meet those
initial listing requirements at that time.
If
Nasdaq delists any of our securities from trading on its exchange and we are not able to list such securities on another national securities
exchange, we expect such securities could be quoted on an over-the-counter market. If this were to occur, we could face significant
material adverse consequences, including:
| ● | a
limited availability of market quotations for our securities; |
| ● | reduced
liquidity with respect to such securities; |
| ● | a
determination that our Class A ordinary shares are a “penny stock” which will require brokers trading in our Class A
ordinary shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading
market for our securities; |
| ● | a
limited amount of news and analyst coverage for our company; and |
| ● | a
decreased ability to issue additional securities or obtain additional financing in the future. |
The
National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the
sale of certain securities, which are referred to as “covered securities.” Because our units and eventually our Class A
ordinary shares and warrants are listed on Nasdaq, our units, Class A ordinary shares and warrants qualify as covered securities
under such statute. Although the states are preempted from regulating the sale of covered securities, the federal statute does allow
the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states
can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to
prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities
regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of
securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not qualify
as covered securities under such statute, and we would be subject to regulation in each state in which we offer our securities.
Our
initial shareholders control the appointment of our board of directors until completion of our initial business combination and hold
a substantial interest in us. As a result, they appoint all of our directors prior to our initial business combination and may exert
a substantial influence on actions requiring shareholder vote, potentially in a manner that you do not support.
Our
initial shareholders own 20% of our issued and outstanding ordinary shares. In addition, prior to our initial business combination, only
the founders shares, all of which are held by our initial shareholders, have the right to vote on the appointment of directors, and holders
of a majority of our founders shares may remove a member of the board of directors for any reason. Neither our initial shareholders nor,
to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed
in this Annual Report. Factors that would be considered in making such additional purchases would include consideration of the current
trading price of our Class A ordinary shares. In addition, as a result of their substantial ownership in our company, our initial
shareholders may exert a substantial influence on other actions requiring a shareholder vote, potentially in a manner that you do not
support, including amendments to our amended and restated memorandum and articles of association and approval of major corporate transactions.
The purchase by our initial shareholders of any Class A ordinary shares, including in the aftermarket or in privately negotiated
transactions, would increase their influence over these actions. Accordingly, our initial shareholders exert significant influence over
actions requiring a shareholder vote at least until the completion of our initial business combination.
A
provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.
If:
(i)
we issue additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the
closing of our initial business combination at a Newly Issued Price of less than $9.20 per Class A ordinary share;
(ii) the
aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for
the funding of our initial business combination on the date of the completion of our initial business combination (net of redemptions),
and
(iii) the
Market Value is below $9.20 per share,
then
the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price,
and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market
Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business combination with a target
business.
We
may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We
have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of
$0.01 per warrant; provided that the last reported sales price of our Class A ordinary shares equals or exceeds $18.00 per share
(as adjusted for share sub-divisions, share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the
like or as indicated above) for any 20 trading days within a 30 trading-day period commencing on the date they become exercisable
and ending on the third trading day prior to the date we send the notice of redemption to the warrant holders. If and when the warrants
become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities
for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you to: (1) exercise your
warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so; (2) sell your warrants at
the then-current market price when you might otherwise wish to hold your warrants; or (3) accept the nominal redemption price
which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your
warrants. None of the private warrants will be redeemable by us so long as they are held by our sponsor or its permitted transferees.
Our
warrants contained in our units, together with our founders shares, may have an adverse effect on the market price of our Class A
ordinary shares and make it more difficult to effectuate our initial business combination.
We
issued, as part of the 12,650,000 units that we offered, warrants to purchase 6,325,000 Class A ordinary shares with an exercise price
of $11.50 per warrant (subject to adjustment as provided herein), and, simultaneously with the closing of our initial public offering,
we sold in a private placement an aggregate of 4,866,667 private warrants, each exercisable to purchase one Class A ordinary share
at a price of $11.50 per share, subject to adjustment as provided herein. Our sponsor currently holds 3,162,500 founders shares. In addition,
if our sponsor, an affiliate of our sponsor or certain of our officers and directors make any working capital loans, up to $1,500,000
of such loans may be converted into warrants, at the price of $1.50 per warrant, at the option of the lender. Such warrants would be
identical to the private warrants. To the extent we issue ordinary shares to effectuate a business transaction, the potential for the
issuance of a substantial number of additional Class A ordinary shares upon exercise of these warrants or conversion rights could
make us a less attractive acquisition vehicle to a target business. Any such issuance will increase the number of issued and outstanding
Class A ordinary shares and reduce the value of the Class A ordinary shares issued to complete the business transaction. Therefore,
our warrants and founders shares may make it more difficult to effectuate a business combination or increase the cost of acquiring the
target business.
The
private warrants are identical to the warrants sold as part of our initial public offering units except that, so long as they are held
by our sponsor or its permitted transferees: (1) they will not be redeemable by us; (2) they (including the ordinary shares
issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor
until 30 days after the completion of our initial business combination; and (3) they (including the ordinary shares issuable
upon exercise of these warrants) are entitled to registration rights with respect to the resale thereof.
There
is currently a limited market for our securities, which could adversely affect the liquidity and price of our securities.
Shareholders
have limited access to information about prior market history on which to base their investment decision. The price of our securities
may vary significantly due to one or more potential business combinations and general market or economic conditions. Furthermore, an
active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your
securities unless a market can be established and sustained.
We
are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and we take advantage of certain
exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, which could make our securities
less attractive to investors and may make it more difficult to compare our performance with other public companies.
We
are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we take advantage
of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth
companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of
the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,
and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any
golden parachute payments not previously approved. As a result, our shareholders do not have access to certain information they may deem
important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier,
including if the market value of our ordinary shares held by non-affiliates equals or exceeds $700 million as of the end of
any second quarter of a fiscal year, in which case we would no longer be an emerging growth company as of the end of such fiscal year.
We cannot assure you that investors will not find our securities less attractive because we rely on these exemptions, which may cause
the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities
and the trading prices of our securities may be more volatile.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial
accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective
or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such
extended transition period which means that when a standard is issued or revised and it has different application dates for public or
private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new
or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth
company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of
the potential differences in accounting standards used.
Additionally,
we are a “smaller reporting company” as defined in 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 equals or exceeds $250 million as of the end of that year’s second fiscal quarter,
or (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year and the market value of our ordinary
shares held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter. Because
we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies
difficult or impossible.
Because
we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to
protect your rights through the U.S. Federal courts may be limited.
We
are an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service
of process within the United States upon our directors or officers, or enforce judgments obtained in the United States courts
against our directors or officers. Our corporate affairs are governed by our amended and restated memorandum and articles of association,
the Companies Act (as the same may be supplemented or amended from time to time) and the common law of the Cayman Islands. The rights
of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors
to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands
is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions
of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. We are also subject to the federal
securities laws of the United States. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman
Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States.
In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states,
such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies
may not have standing to initiate a shareholders derivative action in a Federal court of the United States.
We
have been advised by our Cayman Islands legal counsel that the courts of the Cayman Islands are unlikely (i) to recognize or enforce
against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws
of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against
us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the
liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the
Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign
money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a
competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain
conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a
liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the
same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural
justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public
policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
As
a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken
by management, members of the board of directors or controlling shareholders than they would as public shareholders of a United States
company.
Our
amended and restated memorandum and articles of association provide that unless we consent to an alternate forum, the federal district
courts of the United States shall be the exclusive forum of resolution of any claims arising under the Securities Act, which may
impose additional litigation costs on our shareholders.
Our
amended and restated memorandum and articles of association provide that, unless we consent otherwise, the federal
district courts of the United States shall be the exclusive forum for the resolution of any claims arising under the Securities
Act (for the sake of clarification, this provision does not apply to causes of action arising under the Exchange Act). While this provision
of our amended and restated memorandum and articles of association does not restrict the ability of our shareholders
to bring claims under the Securities Act, nor does it affect the remedies available thereunder if such claims are successful, we recognize
that it may limit shareholders’ ability to bring a claim in a judicial forum that they find favorable and may increase certain
litigation costs which may discourage the filing of claims under the Securities Act against us, our directors and our officers. However,
the enforceability of similar forum provisions in other companies’ organizational documents has been challenged in legal proceedings
and there is uncertainty as to whether courts would enforce the exclusive forum provisions in our amended and restated articles of association.
If a court were to find the choice of forum provision contained in our amended and restated memorandum and articles
of association to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action
in other jurisdictions, which could materially adversely affect our business, financial condition and results of operations.
Our
amended and restated articles of association provide that unless we consent otherwise, the courts of the Cayman Islands shall have sole
and exclusive jurisdiction for all disputes between our company and our shareholders under the Companies Act.
Unless
we consent otherwise, the courts of the Cayman Islands shall have exclusive jurisdiction over any claim or dispute arising out of or
in connection with our memorandum and articles of association or otherwise related in any way to each shareholder’s shareholding
in the company, including but not limited to (i) any derivative action or proceeding brought on behalf of our company, (ii) any
action asserting a claim of breach of fiduciary duty owed by any director, officer or other employee of our company to our company or
our company’s shareholders, or (iii) any action asserting a claim arising pursuant to any provision of the Companies Act and
each shareholder shall be deemed to have irrevocably submitted to the exclusive jurisdiction of the courts of the Cayman Islands over
all such claims or disputes. Without prejudice to any other rights or remedies that we may have, each shareholder shall also be deemed
to have acknowledged and agreed that damages alone would not be an adequate remedy for any breach of this exclusive forum provision in
our memorandum and articles and that accordingly we will be entitled, without proof of special damages, to the remedies of injunction,
specific performance or other equitable relief for any threatened or actual breach of this provision. This exclusive forum provision
is intended to apply to claims arising under Cayman Islands law and would not apply to claims brought pursuant to the Securities Act
or the Exchange Act or any other claim for which federal courts would have exclusive jurisdiction. Such exclusive forum provision in
our amended and restated memorandum and articles of association will not relieve our company of its duties to comply with federal securities
laws and the rules and regulations thereunder, and shareholders of our company will not be deemed to have waived our compliance with
these laws, rules and regulations. This exclusive forum provision may limit a shareholder’s ability to bring a claim in a judicial
forum of its choosing for disputes with our company or our directors or officers which may discourage lawsuits against our company, our
directors, and our officers.
However,
there is uncertainty as to whether courts would enforce the exclusive forum provisions in our amended and restated memorandum and articles
of association. If a court were to find the choice of forum provision contained in our amended and restated memorandum and articles of
association to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in
other jurisdictions, which could materially adversely affect our business, financial condition and results of operations.
Provisions
in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors
might be willing to pay in the future for our Class A ordinary shares and could entrench management.
Our
amended and restated memorandum and articles of association contain provisions that may discourage unsolicited takeover proposals that
shareholders may consider to be in their best interests. These provisions include two-year director terms and the ability of the
board of directors to designate the terms of and issue new series of preference shares, which may make more difficult the removal of
management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
After
our initial business combination, it is possible that a majority of our directors and officers will live outside the United States
and all or substantially of our assets will be located outside the United States; therefore, investors may not be able to enforce
federal securities laws or their other legal rights.
It
is possible that after our initial business combination, a majority of our directors and officers will reside outside of the United States
and all or substantially all of our assets will be located outside of the United States. As a result, it may be difficult, or in
some cases not possible, for investors in the United States to enforce their legal rights, to effect service of process upon all
of our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties
on our directors and officers under United States laws.
An
investment in our securities may result in uncertain or adverse United States federal income tax consequences.
An
investment in our securities may result in uncertain United States federal income tax consequences. For instance, because there
are no authorities that directly address instruments similar to the units that we issued in our initial public offering, the allocation
an investor makes with respect to the purchase price of a unit between the Class A ordinary share and the one-half warrant
included in each unit could be challenged by the IRS or the courts. Furthermore, it is unclear whether the redemption rights with respect
to our ordinary shares suspend the running of a U.S. holder’s holding period for purposes of determining whether any gain or loss
realized by such holder on the sale or exchange of Class A ordinary shares is long-term capital gain or loss and for determining
whether any dividend we pay would be considered “qualified dividends” for federal income tax purposes. Prospective investors
are urged to consult their tax advisors with respect to these and other tax consequences when purchasing, holding or disposing of our
securities.
Since
holders of our founders shares are the only shareholders of the company that have the right to vote on the appointment of directors prior
to our initial business combination, Nasdaq may consider us to be a “controlled company” within the meaning of Nasdaq’s
rules and, as a result, we may qualify for exemptions from certain corporate governance requirements that would otherwise provide protection
to shareholders of other companies.
Until
consummation of our initial business combination, holders of our founders shares are the only shareholders of the company that have the
right to vote on the appointment of directors. As a result, Nasdaq may consider us to be a “controlled company” within the
meaning of Nasdaq’s corporate governance standards. Under Nasdaq corporate governance standards, a company of which more than 50%
of the voting power for the appointment of directors is held by an individual, a group or another company is a “controlled company”
and may elect not to comply with certain corporate governance requirements, including the requirements that:
| ● | we
have a board that includes a majority of “independent directors,” as defined under Nasdaq rules; |
| ● | we
have a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing the
committee’s purpose and responsibilities; and |
| ● | we
have independent director oversight of our director nominations. |
We
do not utilize these exemptions and currently comply with the corporate governance requirements of Nasdaq. However, if we determine in
the future to utilize some or all of these exemptions, you will not have the same protections afforded to shareholders of companies that
are subject to all of Nasdaq’s corporate governance requirements.
If
we are unable to consummate our initial business combination within 18 months of the closing date of our initial public offering, our
public shareholders may be forced to wait beyond such 18 months before redemption from our trust account.
If
we are unable to consummate our initial business combination within 18 months from the closing date of our initial public offering,
we will distribute the aggregate amount then on deposit in the trust account (less up to $100,000 of the net interest earned thereon
to pay dissolution expenses), pro rata to our public shareholders by way of redemption and cease all operations except for the purposes
of winding up of our affairs, as further described herein. Any redemption of public shareholders from the trust account shall be effected
automatically by function of our amended and restated memorandum and articles of association prior to any voluntary winding up. If we
are required to windup, liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders, as part
of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies
Act. In that case, investors may be forced to wait beyond the initial 18 months before the redemption proceeds of our trust account
become available to them and they receive the return of their pro rata portion of the proceeds from our trust account. We have no obligation
to return funds to investors prior to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business
combination or amend certain provisions of our amended and restated memorandum and articles of association and then only in cases where
investors have properly sought to redeem their Class A ordinary shares. Only upon our redemption or any liquidation will public
shareholders be entitled to distributions if we are unable to complete our initial business combination and do not amend certain provisions
of our amended and restated memorandum and articles of association prior thereto.
If
a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or
fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We
will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial business
combination. Despite our compliance with these rules, if a shareholder fails to receive our tender offer or proxy materials, as applicable,
such shareholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials,
as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe
the various procedures that must be complied with in order to validly tender or redeem public shares. In the event that a shareholder
fails to comply with these procedures, its shares may not be redeemed. See “Item 1. Business— Effecting a Business Combination—
Conversion Rights.”
The
warrants that are part of the units that we offered publicly and issued privately, together with our grant of registration rights to
our sponsor and others, may have an adverse effect on the market price of our Class A ordinary shares and may make it more difficult
for us to complete our initial business combination.
We
issued warrants to purchase up to 6,325,000 ordinary shares at a price of $11.50 per share (subject to adjustment as provided herein)
as part of the 12,650,000 units that we sold as part of our initial public offering following the full exercise of the over-allotment
option. Furthermore, simultaneously with the closing of our initial public offering, we issued to our sponsor in a private placement
an aggregate of 4,866,667 private warrants. Each warrant is exercisable to purchase one ordinary share at a price of $11.50 per share,
subject to adjustment as provided herein. In addition, if our sponsor makes any working capital loans, up to $1,500,000 of such loans
may be converted into warrants, at a price of $1.50 per warrant, at the option of the lender. Such warrants would be identical to the
private warrants.
Pursuant
to an agreement that was entered into concurrently with the issuance and sale of the securities in our initial public offering, our sponsor,
management team and their permitted transferees can demand that we register the resale of their founders shares beginning at the time
of our initial business combination. In addition, our sponsor, as the holder of our private warrants, and its permitted transferees,
can demand that we register the resale of the private warrants, or the Class A ordinary shares issuable upon exercise of the private
warrants. Holders of warrants that may be issued upon conversion of working capital loans, may demand that we register the resale of
those warrants, or the issuance of Class A ordinary shares upon exercise of those warrants.
The
potential issuance of shares underlying our various groups of warrants, together with the foregoing registration rights with respect
to those shares and other shares, will allow, potentially, a significant, additional number of our Class A ordinary shares to become
available for trading in the public market. That potential development may have an adverse effect on the market price of our Class A
ordinary shares even without there being actual additional issuances or resales. In addition, the existence of the registration rights
may make our initial business combination more costly or difficult to conclude. The shareholders of the target business may increase
the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price
of our Class A ordinary shares that is expected from the potential resale of the Class A ordinary shares owned by our sponsor,
or issuable upon exercise of the private warrants or conversion of working capital loans or their respective permitted transferees. Those
resales are enabled by the registration rights.
We
may issue additional Class A ordinary shares or preference shares to complete our initial business combination or under an employee
incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares upon the conversion
of the founders shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution
provisions contained in our amended and restated memorandum and articles of association. Any such issuances would substantially dilute
the interest of our shareholders and likely present other risks.
Our
amended and restated memorandum and articles of association authorizes the issuance of ordinary shares, including 500,000,000 Class A
ordinary shares, par value $0.0001 per share, and 50,000,000 Class B ordinary shares, par value $0.0001 per share, as well as 5,000,000
preference shares, par value $0.0001. Following our initial public offering, there are 487,350,000 and 46,837,500 authorized but unissued
Class A ordinary shares and Class B ordinary shares, respectively, available for issuance, which amounts include (in the case
of Class A ordinary shares) shares reserved for issuance upon exercise of outstanding warrants, and 5,000,000 authorized but unissued
preference shares available for issuance.
Our
sponsor paid a nominal price for their acquisition of the founders shares. We may furthermore issue additional Class A
ordinary shares or other securities to complete our initial business combination or under an employee incentive plan after completion
of our initial business combination. Any such issuances would dilute the interest of our shareholders further and likely present other
risks.
Our
sponsor acquired the founders shares and representative shares, respectively, at nominal prices, significantly contributing to the dilution
to investors in our initial public offering.
The
authorized share capital under our amended and restated memorandum and articles of association also presents the possibility of additional,
substantial dilution. Under those charter documents, we are authorized to issue up to 500,000,000 Class A ordinary shares, par value
$0.0001 per share, up to 50,000,000 Class B ordinary shares, par value $0.0001 per share, and up to 5,000,000 preference shares,
par value $0.0001 per share. Following our initial public offering, there are 487,350,000 and 46,837,500 authorized but unissued Class A
ordinary shares and Class B ordinary shares, respectively, available for issuance, some of which Class A ordinary shares are
reserved for issuance upon exercise of issued and outstanding warrants, and upon conversion of outstanding Class B ordinary shares.
Class B ordinary shares are convertible into Class A ordinary shares, initially at a one-for-one ratio but subject to
adjustment as set forth herein and in our amended and restated memorandum and articles of association.
We
may issue a substantial number of additional Class A ordinary share in order to complete our initial business combination or under
an employee incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares upon
conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business combination
as a result of the anti-dilution provisions contained in our amended and restated memorandum and articles of association. Our amended
and restated memorandum and articles of association provide, among other things, that prior to our initial business combination, we may
not issue additional ordinary shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote
on any initial business combination. The issuance of additional ordinary shares:
| ● | may
significantly dilute the equity interest of investors in our initial public offering; |
| ● | could
cause a change in control if a substantial number of ordinary shares are issued, which may affect, among other things, our ability to
use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
and |
| ● | may
adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants. |
Unlike
certain other blank check companies, our initial shareholder will receive additional Class A ordinary shares if we issue shares
to consummate an initial business combination.
The
founders shares will automatically convert into Class A ordinary shares on the first business day following the completion of our
initial business combination on a one-for-one basis, subject to adjustment as provided herein. In the case that additional Class A
ordinary shares, or equity-linked securities convertible or exercisable for Class A ordinary shares, are issued or deemed issued
in excess of the amounts issued in our initial public offering and related to the closing of our initial business combination, the ratio
at which founders shares will convert into Class A ordinary shares will be adjusted (subject to waiver by holders of a majority
of the Class B ordinary shares then in issue) so that the number of Class A ordinary shares issuable upon conversion of all
Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of our ordinary shares issued
and outstanding upon the completion of our initial public offering plus the number of Class A ordinary shares and equity-linked securities
issued or deemed issued in connection with our initial business combination (net of redemptions), excluding any Class A ordinary
shares or equity-linked securities issued, or to be issued, to any seller in our initial business combination and any private warrants
issued to our sponsor, a partner or affiliate of our sponsor, or any of our officers or directors. This is different than certain other
blank check companies in which the initial shareholder will only be issued an aggregate of 20% of the total number of shares to be outstanding
prior to our initial business combination.
We
may be a passive foreign investment company, or “PFIC,” which could result in adverse United States federal income tax
consequences to U.S. investors.
If
we are a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder (as defined below) of
our Class A ordinary shares or warrants, the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may
be subject to additional reporting requirements. Our PFIC status for our current and subsequent taxable years may depend on whether we
qualify for the PFIC start-up exception. Depending on the particular circumstances, the application of the start-up exception
may be subject to uncertainty, and there cannot be any assurance that we will qualify for the start-up exception. Accordingly, there
can be no assurances with respect to our status as a PFIC for our current taxable year or any subsequent taxable year. Our actual PFIC
status for any taxable year, moreover, will not be determinable until after the end of such taxable year. If we determine we are a PFIC
for any taxable year (of which there can be no assurance), we will endeavor to provide to a U.S. Holder such information as the Internal
Revenue Service (“IRS”) may require, including a PFIC annual information statement, in order to enable the U.S. Holder to
make and maintain a “qualified electing fund” election, but there can be no assurance that we will timely provide such required
information, and such election would be unavailable with respect to our warrants in all cases. We urge U.S. investors to consult their
own tax advisors regarding the possible application of the PFIC rules. For a more detailed discussion of the tax consequences of PFIC
classification to U.S. Holders, see the section of our prospectus captioned “Income Tax Considerations — United States
Federal Income Taxation — U.S. Holders — Passive Foreign Investment Company Rules.”
The
term “U.S. Holder” means a beneficial owner of units, Class A ordinary shares or warrants who or that is for United States
federal income tax purposes: (i) an individual citizen or resident of the United States, (ii) a corporation (or other
entity treated as a corporation for United States federal income tax purposes) that is created or organized (or treated as created
or organized) in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate the
income of which is subject to United States federal income taxation regardless of its source or (iv) a trust if (A) a
court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S.
persons have the authority to control all substantial decisions of the trust, or (B) it has in effect a valid election to be treated
as a U.S. person.
We
may reincorporate in, migrate to or merge with and into another entity as surviving company in, another jurisdiction in connection with
our initial business combination and such reincorporation, migration or merger may result in taxes imposed on shareholders.
We
may, in connection with our initial business combination and subject to requisite shareholder approval under the Companies Act, reincorporate
in, migrate to or merge with and into another entity as surviving company in, the jurisdiction in which the target company or business
is located or in another jurisdiction. The transaction may require a shareholder or warrant holder to recognize taxable income in the
jurisdiction in which the shareholder or warrant holder is a tax resident or in which its members are resident if it is a tax transparent
entity. We do not intend to make any cash distributions to shareholders or warrant holders to pay such taxes. Shareholders or warrant
holders may be subject to withholding taxes or other taxes with respect to their ownership of us after the reincorporation.
General
Risk Factors
We
are a newly formed company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve
our business objective.
We
are a newly formed company incorporated under the laws of the Cayman Islands with limited operating results. Because we lack a significant
operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business
combination with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business
concerning a business combination and may be unable to complete our initial business combination. If we fail to complete our initial
business combination, we will never generate any operating revenues.
We
are subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased
both our costs and the risk of non-compliance.
We
are subject to rules and regulations by various governing bodies, including, for example, the SEC, which is charged with the protection
of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable
law. Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased
general and administrative and support expenses and a diversion of management time and attention from revenue-generating activities
to compliance activities.
Moreover,
because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time
as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs
necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations
and any subsequent changes, we may be subject to penalty and our business may be harmed.