ITEM
1. BUSINESS.
Introduction
The
Company is a blank check company incorporated as a Cayman Islands exempted company on August 27, 2021. The Company was incorporated for
the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination
with one or more businesses or entities (a “Business Combination”).
The
Company is not limited to a particular industry or sector for purposes of consummating a Business Combination. However, the Company intends
to concentrate its efforts in identifying a potential business combination partner that is based in Asia (excluding China, Hong Kong
and Macau) and who is developing breakthrough technology in life sciences and/or advancing a platform for sustainable technology. The
Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early
stage and emerging growth companies.
As
of December 31, 2022, the Company had not commenced any operations. All activity for the period from August 27, 2021 (inception) through
December 31, 2022 relates to the Company’s formation, the initial public offering (“Initial Public Offering” or “IPO”),
and subsequent to the Initial Public Offering, identifying a target company for a Business Combination, which is described below. The
Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates
non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.
The
registration statement for the Company’s Initial Public Offering was declared effective on February 28, 2022. On March 3, 2022,
the Company consummated the Initial Public Offering of 20,000,000 units (the “Units” and, with respect to the Class A ordinary
shares included in the Units being offered, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $200,000,000.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of an aggregate of 6,666,667 warrants (each, a “Private
Placement Warrant” and, collectively, the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant
in a private placement, consisting of 2,666,667 Private Placement Warrants to VMCA Sponsor, LLC (f/k/a Valuence Capital, LLC), (the “Sponsor”)
and 4,000,000 Private Placement Warrants to Valuence Partners LP, generating gross proceeds of $10,000,000.
Following
the closing of the Initial Public Offering on March 3, 2022, an amount of $206,000,000 ($10.30 per Unit) from the net proceeds of the
sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a Trust Account (the “Trust
Account”), and was invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company
Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment
company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act of 1940, as determined
by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust
Account to the Company’s shareholders, as described below.
On
March 8, 2022, the underwriters partially exercised their over-allotment option, resulting in an additional 2,009,963 Units issued for
an aggregate amount of $20,099,630. In connection with the underwriters’ partial exercise of their over-allotment option, the Company
also consummated the sale of an additional 267,995 Private Placement Warrants at $1.50 per Private Placement Warrant, generating total
proceeds of $401,993. A total of $20,702,619 ($10.30 per Unit) was deposited into the Trust Account, bringing the aggregate proceeds
held in the Trust Account to $226,702,619.
Transaction
costs amounted to $10,718,994, consisting of $4,000,000 of underwriting fees, net of $2,200,996 reimbursed from the underwriters, $8,105,480
of deferred underwriting fees and $814,510 of other offering costs.
The
Company will provide the holders of the public shares (the “Public Shareholders”) with the opportunity to redeem all or a
portion of their public shares upon the completion of the Business Combination, either (i) in connection with a general meeting called
to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder
approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders
will be entitled to redeem their Public Shares, equal to the aggregate amount then on deposit in the Trust Account, calculated as of
two business days prior to the consummation of the Business Combination (initially anticipated to be $10.30 per Public Share), including
interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject
to certain limitations as described in the prospectus. The per-share amount to be distributed to the Public Shareholders who properly
redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters. There will
be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
Management
Team
Our
management team is led by Sung Yoon Woo, Chief Executive Officer and Director; Sungwoo (Andrew) Hyung, Chief Financial Officer and Director;
Sungsik (Sung) Lee, President; and Dr. Gene Young Cho, Chief Operating Officer.
Sung
Yoon Woo, Chief Executive Officer and Director, is an investor with a track record and experience in strategic acquisitions, corporate
divestitures, recapitalizations, and growth equity. Mr. Woo is the Founder and CEO of Credian Partners, a private equity firm based in
South Korea. During his 17-year investment career, Mr. Woo has led over $4 billion in transactions and invested over $3 billion. Prior
to founding Credian Partners, Mr. Woo was at Russell Investments, where he advised the National Pension Service of Korea, the third-largest
pension fund in the world by total assets, the Bank of Korea, and Korea Investment Corporation, a sovereign wealth fund, among other
clients on their global portfolio. Prior to Russell Investments, Mr. Woo was a team head of the private equity arm of Mirae Asset Global
Investments, one of the largest asset management funds in South Korea, where he led various domestic and cross-border transactions. While
at Mirae Asset Financial Group (“Mirae Asset”), Mr. Woo led the acquisition of Acushnet Company, the parent company of Titleist
and FootJoy, for $1.2 billion, representing an internal rate of return of approximately 12.5%1. Not only has this transaction
won awards in South Korea, but it is also notable as a key transaction that helped pave the way for the proliferation of private equity
transactions in the country. Prior to Mirae Asset, Mr. Woo was in the investment banking department of KB Kookmin Bank, the largest retail
bank in Korea, where he led multiple transactions with large Korean conglomerates. Mr. Woo received his LL.B. from Yonsei University
where he was awarded the Buphyun Scholarship and M.B.A. from Cornell University.
Internal
rate of return estimated using reported earnings from publicly available sources. Acushnet was reported to earn US$448 million from its
IPO. Mirae and its affiliates were reported to have acquired Acushnet for US$1,230 million in July 2011 where Mirae alone originally
invested US$525 million.
Sungwoo
(Andrew) Hyung, Chief Financial Officer and Director, has significant experience sourcing, structuring, and executing complex transactions
across the sustainability and technology value chain. Most recently, Mr. Hyung was at Nomura Greentech, a sustainable technology and
infrastructure investment bank, responsible for executing multiple M&A transactions and origination efforts within the energy transition
and clean technology sectors. He executed multiple de-SPAC transactions and was part of the SPAC coverage team that was responsible for
completing more than ten sustainability-related SPAC business combinations and de-SPAC transactions. Prior to Nomura Greentech, Mr. Hyung
was at Deutsche Bank, where he focused on origination and execution of M&A, debt and equity financing across the technology, media,
and telecommunications sectors. Mr. Hyung received his B.A. from University of Toronto and M.B.A. from Cornell University.
Sungsik
(Sung) Lee, President, brings extensive experience in investment banking, venture capital, and corporate development, with a proven track
record of sourcing and executing M&A, strategic investment, and financing transactions. Most recently, Mr. Lee led cross-border M&A
and strategic investments across the broad sustainability-focused areas at the Global Development Group of SK Group, the third-largest
conglomerate in Korea with more than 100 affiliates over diverse sectors including energy, ICT, and life sciences. Prior to SK, Mr. Lee
was at SunTrust Robinson Humphrey, where he advised many publicly traded industrial companies on M&A and capital market transactions.
Before joining SunTrust, Mr. Lee was at Progress Partners, a media and technology-focused investment banking firm, where he executed
M&A and financing projects for early-to-mid-stage clients and managed three investment funds at Progress Ventures, its affiliated
venture capital arm. Mr. Lee received his B.A. from Hanyang University and M.B.A. from Cornell University.
Dr.
Gene Young Cho, Chief Operating Officer, brings leadership and experience in business operations and life sciences. Currently, Dr. Cho
is the Executive Director of CG Pharmaceuticals, Inc., the U.S. subsidiary of CrystalGenomics. In this role, Dr. Cho is focused on developing
growth strategies as well as providing strategic planning and management of the operations and expansion of CG Pharmaceuticals. Additionally,
Dr. Cho supports U.S. clinical trial management. Previously, Dr. Cho worked as a life sciences consultant at L.E.K. Consulting, working
with clients in biopharmaceuticals, contract services, medical devices, healthcare services, HCIT, digital health, and AI. Some of his
specific experiences include working on large-scale M&A transactions of leading biopharmaceuticals or healthcare service companies,
supporting target identification for acquisition, implementing pipeline development strategies, and optimizing governance structures
of fast-growing biotech companies. He also brings strong experience in the Asian markets through his professional network focused around
supporting emerging technologies and startups. Dr. Cho received his B.S. in bioengineering at U.C. Berkeley and Ph.D. from the NYU School
of Medicine in biomedical imaging; he also completed his post-doctorate at Memorial Sloan Kettering focusing on breast cancer imaging.
Dr. Cho is also the author of over 10 publications in journals and several conference abstracts during his time as a researcher.
With
respect to the above, past experience or performance of our management team and the businesses with which they have been associated is
not a guarantee of either (i) our ability to successfully identify and consummate a business combination or (ii) success with respect
to any business combination that we may consummate. You should not rely on the historical record of our management team or the businesses
with which they have been associated as indicative of our future performance. No member of our management team has any experience in
operating special purpose acquisition companies.
Business
Strategy
Our
business strategy is to identify, acquire, and maximize the value of a target operating in Asia, excluding China, Hong Kong and Macau,
with a focus on either life sciences or sustainable technology – a target who can benefit from (i) our geographic understanding
of both Asia and North America, (ii) the financial and operational experience of our management team and the Board, (iii) additional
capital to fund its strategic objectives, and (iv) access to public securities markets.
Our
target selection process is expected to leverage our management team’s network of potential transaction sources, ranging from owners
and directors of private and public companies, private equity funds, investment bankers, lenders, attorneys, accountants, and other trusted
advisors across various sectors. Over the course of their careers, the members of our management team and Board of Directors have developed
a broad network of contacts and corporate relationships that we believe will serve as a useful source of merger opportunities. We plan
to utilize the network and industry experience of our management team and Board in seeking an initial business combination and employing
our strategy.
Geographic
and Sector Focus
Our
objective is to identify and merge with a target that is based in Asia, excluding China, Hong Kong and Macau, and who is advancing a
platform for developing breakthrough technology in life sciences and/or advancing a platform for sustainable technology. We will not
pursue or consummate our initial business combination with any entity with its principal business operations in China, Hong Kong or Macau.
Opportunities
in Asia (Excluding China, Hong Kong and Macau)
Asia
remains a largely underdeveloped market with high potential and untiring endeavor of innovation, but with limited access to global capital
today. We believe that there are enormous opportunities to bring privately held companies in Asia (excluding China, Hong Kong and Macau)
to the U.S. capital markets and accelerate the growth of the businesses, particularly in the aforementioned areas, which we aim to capture
and realize through a business combination. According to the International Monetary Fund, Asia accounted for 30.6% of global GDP in terms
of purchasing parity in 2000, and reached 44.6% in 2020, and according to McKinsey, it is on track to exceed 50% by 2040. This growth
is driven by rapid technology innovation and digital transformation, infrastructure development, population growth with greater literacy,
and new consumer profiles with an ever-expanding middle-class, among others.
Asian
businesses have risen rapidly to have global prominence over the past few decades, with the region comprising 43% of the world’s
5,000 largest companies by revenue according to McKinsey and 36% of global unicorns by valuation according to PitchBook. However, both
private and public investments have not been allocated accordingly with Asia lagging far behind their overseas peers. As of December
31, 2020, all public companies listed on the Asian exchanges collectively constitute 34.7% of the global market capitalization, whereas
the U.S. exchanges alone represent 43.5%. In addition, despite its broader index underperforming, public companies in emerging Asia Pacific
markets (“EM”) in our core sectors have outperformed that of their peers in the global developed markets (“DM”),
as evidenced by the 12-month average return of FTSE indices exhibiting Asia Pacific EM’s outperformance over Global DM for the
past 17 consecutive months in the Pharmaceuticals and Biotechnology sector and for the past 4 consecutive months in the Alternative Energy
sector.
We
believe listing an Asian (excluding China, Hong Kong and Macau) company on a major U.S. exchange could lead to even greater performance
than listing on an Asian exchange, potentially due to access to a global investor base, brand awareness to global partners and customers,
and potential opportunities for global expansion of the post-merger operations. Most importantly, we believe that our management team
and board members have the in-house capabilities and connectivity in Asia that will enable us to engage with a target in a culturally
sensitive manner, establish a trusted dialogue, cooperate throughout the de-SPAC process, and provide continued support beyond the business
combination. Additionally, we are currently one of three SPACs with explicit focus on a potential target domiciled in Asia (excluding
China, Hong Kong, and Macau), and we believe we are the only SPAC with our explicit geographical and industry focus. We will not pursue
or consummate our initial business combination with any entity with its principal business operations in China, Hong Kong or Macau.
In
Asia, businesses have been growing rapidly in the broad sustainable technology market including renewable energy, advanced transportation,
digital transformation, clean industrial process, new materials, and advanced healthcare, along with significant growth in clean technology
adoption. For example, South Korean entities issued an aggregate of $50.8 billion in ESG bonds in 2020, and Japan’s total sustainable
investment increased to $2.9 trillion in 2020, a 32% growth since 2018. The accelerating momentum of sustainability in Asia will likely
reshape the startup ecosystems, preparing many privately held companies for the natural path to becoming a scalable, publicly traded
company.
Breakthrough
technology in life sciences
There
is an increasing focus on the importance of healthcare innovation including the development of novel therapeutics and health technologies
in many developed countries due to a growing aging population. This was further exacerbated by the COVID-19 pandemic. Several Asian countries
are experiencing significant aging populations (e.g., South Korea, Japan, Singapore, Indonesia, and Malaysia) and have begun to address
the challenges of an aging society through investments in R&D, especially around healthcare and medicine. Moreover, governments such
as South Korea, Japan, and Singapore are driving growth and accelerating R&D in technologies focused on pharmaceuticals, medical
devices, and AI tools to support healthcare. Overall, these trends are driving the emergence of many attractive opportunities for investment
in the space.
Within
biopharmaceuticals, the therapeutic areas of oncology, cardiology, infectious disease, immunology, and chronic disease such as obesity
and diabetes, continue to lead the market in terms of drug sales. We aim to examine these therapeutic areas as well as other areas of
high growth potential due to the significant aging population, especially in Alzheimer’s and other chronic diseases (e.g., fatty
liver disease, chronic kidney disease, idiopathic pulmonary fibrosis, etc.). In oncology, we believe that there are numerous attractive
opportunities around antibody drug conjugates, novel mechanisms and targets around protein degradation, and immunotherapies including
cancer vaccines, particularly with the success of mRNA vaccines for COVID-19 validating their potential for safety and efficacy. However,
we also feel that there are other potential attractive targets in oncology – one such example includes the growing areas of development
around fatty acid synthase (FASN) inhibitors and epigenetic regulators (e.g., PRMT5, METTL3, HDACs).
Precision
medicine is another area of continued growth with the advance of NGS testing, liquid biopsy, automation, and rapid testing as evidenced
during the COVID-19 pandemic. As “omics”-level research continues to advance, many attractive precision medicine companies
have emerged including those harnessing AI technology to better identify patients and predict outcomes across different indications,
such as cancer. Additionally, with the aging population, advancements in diagnostics (e.g., genetic screening) are providing actionable
genetic insights, enabling patients to identify potential disease risks and focus on preventative health treatments.
In
healthcare, the rapid uptake of digital and mobile health technology was catalyzed by the COVID-19 pandemic, and we believe the adoption
of these technologies will continue to grow. Furthermore, there is a greater need to closely monitor older patients through digital health
innovations to protect them from incidents and collect valuable health data that can be used to improve care and reduce costs. There
are several attractive companies that are making advances in telehealth, wearable technology, and remote monitoring through better software,
AI technology, and optimization of treatment workflows.
Advancing
a platform for sustainable technology
The
release of the latest Intergovernmental Panel on Climate Change (IPCC) report on the scientific assessment of climate change, which was
signed off by 195 member governments spells out the stakes we are up against and why we have no time to waste in taking drastic steps
to build a green economy. According to current evidence, global temperatures will increase to 1.5 degrees Celsius above pre-industrial
level climates by 2040. Staying below this critical 1.5 degrees Celsius threshold would reduce the odds of initiating the most dangerous
and irreversible effects of climate change. This alarming forecast has made it critical to focus on ambitious mitigation to limit warming
to below 1.5 degrees Celsius by 2040 through commitments from corporations and investors. Based on the additional data gathered since
the last assessment in 2013, the report has established an ‘unequivocal’ link between human activity and global warming.
The report also flags that changes in the ocean, ice sheets and global sea level, due to past and future greenhouse gas emissions are
“irreversible for centuries to millennia.” We believe that this problem is big enough for multiple innovations and technologies
to co-exist. Decarbonizing the global economy and shifting to clean energy is not an easy task, but our management team believes that
there will be an increasing number of companies focused on technology aimed at accelerating the sustainable transition, as well as larger
funding to fight the climate crisis.
Our
goals around sustainable technology focus on businesses that are developing and advancing a platform for clean technology, including,
but not limited to, advanced transportation, industrial IoT and software, energy efficiency, sustainable agriculture and materials, renewable
energy, and environmental services and technologies that are poised to play a significant role in decarbonization and sustainable transition.
Finally,
at the intersection of life sciences and sustainability trends are areas around synthetic biology. This emerging area will continue to
pave the future of many sectors including biopharmaceutical manufacturing, agriculture/food technologies, as well as energy / renewable
fuels. Attractive opportunities exist in companies that can truly understand and harness the capabilities of cells and bioprocesses to
optimize and make efficient production processes across these sectors.
Our
team believes that we have the right in-house capabilities, sector expertise, and connectivity to identify and consummate a potential
business combination in our target geography within the aforementioned sectors.
Collaborative
Sourcing and Diligence Process
Our
sourcing process is expected to be enhanced by our collaboration with CBS, Credian, and Quantum Leaps. We will make the best use of the
unique sourcing and analytics capabilities of CBS, Credian, and Quantum Leaps, leveraging a team of 12 professionals to support us in
the identification and diligence of potential targets for the proposed business combination.
CBS
and its management team has participated in 15 strategic investments, including transactions completed through its parent CrystalGenomics,
and CBS has a deep bench of professionals that has the ability to scope promising and scalable technologies. Credian also brings extensive
sourcing capabilities that has led to a strong track record with 21.5% cumulative IRR since inception.
Furthermore,
we will leverage Quantum Leaps to extend our sourcing and due diligence capabilities by working closely with them to strengthen our connectivity
within Japan and its current network.
In
addition to our internal proprietary sourcing process, collaboration with CBS, Credian, and Quantum Leaps, our sourcing efforts are expected
to be further supported by our board members.
Extensive
Diligence and Evaluation
Our
selection and diligence process will be supplemented by the management team’s M&A track record. After examining the quality
of the target’s management team and conducting extensive primary research into our target’s competitive differentiation,
market opportunities, product development roadmap, customer traction, sales strategy, and operating model, we expect to produce a range
of scenarios with a high level of quantitative rigor and attach strong supporting evidence for the assumptions driving each scenario.
We believe this deeper understanding of how the story is quantified into future growth and profitability is expected to help our target
to achieve a successful public listing, make better strategic decisions over time, and enable our target to better understand the elements
required to deliver strong shareholder returns.
Experienced
Team and Board of Directors
We
believe our Board of Directors and management team bring diverse added value to our target in growth disciplines, such as talent recruiting,
international expansion, capital formation, public offering preparation, and other topics that drive growth and expansion. We have assembled
a diverse board with our future target in mind, with the expectation that our target may require us for different types of advice and
assistance during our tenure as their investor and business target.
For
example, when Mr. Woo, our Chief Executive Officer and Director, led the acquisition of Acushnet Company in 2011, he oversaw the formation
of the board of directors and the management team, and the post-merger integration, which led to 2x growth in the value of the company
in four years. In addition, when Credian acquired WiseUXGlobal, Mr. Woo sourced talents to strengthen its management team, including
the Chief Executive Officer, which supported WiseUXGlobal to expand distribution channels and logistics centers every year since the
acquisition in 2017.
We
expect to remain involved in the post-merger entity and to collaborate with the target management team to strengthen the business’s
compounding growth. Our proven track record of delivering tangible value to portfolio companies includes recruiting senior leadership
talent, delivering M&A support, identifying and helping to execute international expansion, and providing business intelligence.
Our
Investment Criteria
We
believe our aforementioned geography and target sectors will thrive regardless of the business cycle. Within these sectors, we intend
to focus on late stage, public market ready companies that have the potential to scale globally in the near-term. We have identified
the following attributes and guidelines to evaluate prospective targets. We may decide, however, to enter into our initial business combination
with one or more target businesses that do not meet these criteria and guidelines, including the geographical location. We intend to
pursue an initial business combination with companies whose principal business operations are not in China, Hong Kong or Macau and have
the following characteristics:
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Differentiated
Technology: We favor businesses that have a clear comparative advantage and deep competitive moats. Often innovation results
in category creation or exposing consumer demand or use cases that were previously unrecognized. In other cases, technology and process
improvements can lead to better, faster, more efficient, or more powerful results. The ability to continuously innovate is key to
successful product development, growth, profitability, and continual extension of the competitive moat. |
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Large
and Attractive Addressable Market: Large and growing addressable markets, ideally in segments which have growth and profitability
dynamics that are not limited to specific geography, are most attractive to us. We favor businesses which already have a strong position
in at least one initial geography or market segment with a clear expansion path for the global market. |
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Scalable
and Sustainable Growth: We view long term growth potential as an essential component of value creation. We prefer category
leaders with proven business models, an established or near-term leadership position, a strong value proposition, and the proven
ability to consistently execute strategic objectives to drive accelerated growth and achieve even more significant degrees of scale. |
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Path
to Near-term Profitability: We believe capital efficient growth, attractive margin structure, and a path to sustainable profitability
and positive cash flow are the fundamental drivers of long-term investment returns: We place a great deal of emphasis on disciplined
cost structure as a precursor to a profitable business model at scale. |
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Experienced
Team: We believe strong management teams with strong board governance and controls are critical to long-term success. We
expect to partner with a strong leadership team capable of scaling its business globally, achieving sustainable profitability, maintaining
a dynamic, inclusive and diverse culture, and adapting to new opportunities and challenges over time. |
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Global
Benefit from Life Science Innovations and/or Sustainability-focused: We expect to consummate a business combination transaction
with a target that is an active market participant in the global development of the clean energy industry and/or broader transition
toward a sustainable economic model with existing operating practices that promotes and profits from environmental sustainability.
We also plan to focus on potential targets in the life science space that have novel technology platforms based on innovations “from
the bench.” We are especially keen on finding attractive companies in healthcare or medicine that focus on solving areas of
high unmet needs to improve overall quality of life. |
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Attractive
Valuation: We expect to acquire a business with an aggregate enterprise value between $500 million and $1.5 billion, determined
at the discretion of our management and directors. |
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Clear
Benefit as a Public Company: We intend to acquire one or more businesses expected to benefit from being publicly traded and
can effectively utilize the broader access to capital and public profile that are associated with being a publicly traded company.
These benefits may include increased brand awareness, access to capital markets, and the ability to attract a diverse investor base.
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Path
to Near-term Profitability: We believe capital efficient growth, attractive margin structure, and a path to sustainable profitability
and positive cash flow are the fundamental drivers of long-term investment returns: We place a great deal of emphasis on disciplined
cost structure as a precursor to a profitable business model at scale. |
These
criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be
based, to the extent relevant, on these general guidelines as well as on other considerations, factors and criteria that our management
may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet
the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder communications
related to our initial business combination, which, as discussed in this Annual Report on Form 10-K, would be in the form of tender offer
documents or proxy solicitation materials that we would file with the SEC.
Investors
should note with respect to the foregoing examples that past performance of our Sponsor, management team and board members 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 identify a suitable
candidate for our initial business combination. You should not rely on the historical record of our affiliates of our Sponsor’s,
management’s or Board’s performance as indicative of our future performance.
Initial
Business Combination
Nasdaq
rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value
of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable) at the time of our signing
a definitive agreement in connection with our initial business combination. We refer to this as the 80% of net assets test. If our Board
of Directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion
from an independent investment banking firm or another independent firm that commonly renders valuation opinions for the type of company
we are seeking to acquire or an independent accounting firm. We do not intend to purchase multiple businesses in unrelated industries
in conjunction with our initial business combination. Additionally, pursuant to Nasdaq rules, any initial business combination must be
approved by a majority of our independent directors. Our amended and restated memorandum and articles of association will also provide
that any initial business combination must be approved by at least 75% of our Board of Directors. We will have until 15 months (or up
to 18 months or 21 months, as applicable) from the closing of the IPO to consummate an initial business combination.
We
anticipate structuring our initial business combination so that the post-transaction company in which our public shareholders own shares
will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial
business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target
business in order to meet certain objectives of the target management team or shareholders or for other reasons. However, 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 of 1940, as amended, or 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 would
acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders
immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial
business combination. If less than 100% of the 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 net assets test. If our initial business combination involves more than one target business, the 80% of net assets test
will be based on the aggregate value of all of the target businesses. If our securities are not listed on Nasdaq after the IPO, we would
not be required to satisfy the 80% requirement. However, we intend to satisfy the 80% requirement even if our securities are not listed
on Nasdaq at the time of our initial business combination.
Prior
to the date of this Annual Report on Form 10-K, we filed a Registration Statement on Form 8-A with the SEC to voluntarily register our
securities under Section 12 of the Exchange Act. As a result, we are subject to the rules and regulations promulgated under the Exchange
Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent
to the consummation of our initial business combination.
Status
as a Public Company
We
believe our structure will make us an attractive business combination partner to target businesses. As an existing public company, we
offer a target business an alternative to the traditional initial public offering through a merger or other business combination. In
this situation, the owners of the target business would exchange their interests in the target business for our shares or for a combination
of our shares and cash, allowing us to tailor the consideration to the specific needs of the sellers. Although there are various costs
and obligations associated with being a public company, we believe target businesses will find this method a more certain and cost effective
method to becoming a public company than the typical initial public offering. In a typical initial public offering, there are additional
expenses incurred in marketing, road show and public reporting efforts that may not be present to the same extent in connection with
a business combination with us.
Furthermore,
once a proposed business combination is completed, the target business will have effectively become public, whereas an initial public
offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could
delay or 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. It can offer further benefits by
augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
While
we believe that our structure and our management team’s backgrounds will make us an attractive business partner, some potential
target businesses may have a negative view of us since we are a blank check company, without an operating history, and there is uncertainty
relating to our ability to obtain shareholder approval of our proposed initial business combination and retain sufficient funds in our
Trust Account in connection therewith.
We
are an “emerging growth company,” as defined in the JOBS Act. We will remain an emerging growth company until the earlier
of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of the IPO, (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 prior June 30th, and (2) the date on
which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Additionally,
we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take
advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares
held by non-affiliates exceeds $250 million as of the prior June 30th, or (2) our annual revenues exceeded $100 million during such completed
fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30th.
Financial
Position
With
funds available for a business combination initially in the amount of $218,300,626 assuming no redemptions and after payment of $8,105,480
of deferred underwriting fees, before 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, we have not taken
any steps to secure third party financing and there can be no assurance it will be available to us.
Effecting
Our Initial Business Combination
General
We
are not presently engaged in, and we will not engage in, any operations following our initial public offering. We intend to effectuate
our initial business combination using cash from the proceeds of our initial public offering and the private placement warrants, our
shares, debt or a combination of these as the consideration to be paid in our initial business combination.
If
we pay for our initial business combination using equity or debt securities, or we do not use all of the funds released from the Trust
Account for payment of the purchase price in connection with our business combination or for redemptions or purchases of our ordinary
shares, we may apply the balance of the cash released to us from the Trust Account for general corporate purposes, including for maintenance
or expansion of operations of acquired businesses, the payment of principal or interest due on indebtedness incurred in consummating
our initial business combination, to fund the purchase of other companies or for working capital.
We
have not identified any acquisition target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly
or indirectly, with any business combination target with respect to an initial business combination with us. Accordingly, there is no
current basis for investors in the IPO to evaluate the possible merits or risks of the target business with which we may ultimately complete
our initial business combination. Although our management will assess the risks inherent in a particular target business with which we
may combine, we cannot assure you that this assessment will result in our identifying all risks that a target business may encounter.
Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that
those risks will adversely impact a target business.
We
may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial
business combination and we may effectuate an initial business combination using the proceeds of such offering rather than using the
amounts held in the Trust Account. Subject to compliance with applicable securities laws, we would consummate such financing only simultaneously
with the consummation of our business combination. In the case of an initial business combination funded with assets other than the Trust
Account assets, our tender offer documents or proxy materials disclosing the business combination would disclose the terms of the financing
and, only if required by applicable law or Nasdaq, we would seek shareholder approval of such financing. There are no prohibitions on
our ability to raise funds privately or through loans in connection with our initial business combination. At this time, we are not a
party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities
or otherwise.
Sources
of target Businesses
We
anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment bankers
and private investment funds. target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited
by us through calls or mailings. These sources may also introduce us to target businesses in which they think we may be interested on
an unsolicited basis, since many of these sources will have read this Annual Report on Form 10-K and know what types of businesses we
are targeting. Our officers and directors, as well as their affiliates, may also bring to our attention target business candidates of
which they become aware through their business contacts as a result of formal or informal inquiries or discussions they may have, as
well as attending trade shows or conventions. In addition, we expect to receive a number of proprietary deal flow opportunities that
would not otherwise necessarily be available to us as a result of the track record and business relationships of our officers and directors.
While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions
on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting
fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage
a finder only to the extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be
available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our
best interest to pursue. Payment of a finder’s fee is customarily tied to completion of a transaction, in which case any such fee
will be paid out of the funds held in the Trust Account. In no event, however, will our sponsor or any of our existing officers or directors,
or any entity with which they are affiliated, be paid any finder’s fee, consulting fee or other compensation by the company prior
to, or for any services they render in order to effectuate, the completion of our initial business combination (regardless of the type
of transaction that it is). In addition, we pay our sponsor $10,000 per month for office space, utilities, secretarial and administrative
support services provided to members of our management team. We may also elect to make payment of customary fees to members of our board
of directors for director service. Any such payments prior to our initial business combination will be made from funds held outside the
Trust Account. Other than the foregoing, there will be no finder’s fees, reimbursement, consulting fee, monies in respect of any
payment of a loan or other compensation paid by us to our sponsor, officers or directors, or any affiliate of our sponsor or officers
prior to, or in connection with any services rendered in order to effectuate, the consummation of our initial business combination (regardless
of the type of transaction that it is).
We
are not prohibited from pursuing an initial business combination with a business combination target that is affiliated with our sponsor,
officers or directors, or from completing the business combination through a joint venture or other form of shared ownership with our
sponsor, officers or directors. In the event we seek to complete our initial business combination with a business combination target
that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, would obtain an opinion from
an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm, that such an initial business combination
is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context. Our amended
and restated memorandum and articles of association provide that a target will not be deemed an affiliate solely by virtue of ownership
by our sponsor or its affiliates, or any of their or our executive officers or directors, of less than 10% of its ordinary shares, individually
or in the aggregate.
Evaluation
of a target Business and Structuring of Our Initial Business Combination
In
evaluating a prospective target business, we expect to conduct a due diligence review which may encompass, among other things, meetings
with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as applicable,
as well as a review of financial, operational, legal and other information which will be made available to us. If we determine to move
forward with a particular target, we will proceed to structure and negotiate the terms of the business combination transaction.
The
time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs
associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification
and evaluation of, and negotiation with, a prospective target business with which our initial business combination is not ultimately
completed will result in our incurring losses and will reduce the funds we can use to complete another business combination. The company
will not pay any consulting fees to members of our management team, or any of their respective affiliates, for services rendered to or
in connection with our initial business combination.
Lack
of Business Diversification
For
an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely
on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with
multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate
the risks of being in a single line of business. By completing our initial business combination with only a single entity, our lack of
diversification may:
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subject
us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the
particular industry in which we operate after our initial business combination, and |
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cause
us to depend on the marketing and sale of a single product or limited number of products or services. |
Limited
Ability to Evaluate the target’s Management Team
Although
we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial
business combination with that business, our assessment of the target business’s management may not prove to be correct. In addition,
the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future
role of members of our management team, if any, in the target business cannot presently be stated with any certainty. While it is possible
that one or more of our directors will remain associated in some capacity with us following our initial business combination, it is unlikely
that any of them will devote their full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot assure
you that members of our management team will have significant experience or knowledge relating to the operations of the particular target
business.
We
cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The
determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business
combination.
Following
a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We
cannot assure you that we will have the ability to recruit additional managers, or that such additional managers will have the requisite
skills, knowledge or experience necessary to enhance the incumbent management.
Shareholders
May Not Have the Ability to Approve Our Initial Business Combination
We
may conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our amended
and restated memorandum and articles of association. However, we will seek shareholder approval if it is required by applicable law or
stock exchange rule, or we may decide to seek shareholder approval for business or other legal reasons. Under the Nasdaq listing rules,
shareholder approval would be required for our initial business combination if, for example:
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we
issue Class A ordinary shares that will be equal to or in excess of 20% of the number of Class A ordinary shares then outstanding; |
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any
of our directors, officers or substantial security holders (as defined by Nasdaq rules) has a 5% or greater interest, directly or
indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of Class A ordinary
shares could result in an increase in outstanding Class A ordinary shares or voting power of 5% or more; or |
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the
issuance or potential issuance of ordinary shares will result in our undergoing a change of control. |
Permitted
Purchases of Our Securities
In
the event 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 or advisors, or their respective
affiliates, may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion
of our initial business combination. There is no limit on the number of shares such persons may purchase. However, they have no current
commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions.
In the event our initial shareholders, directors, officers or advisors, or their respective affiliates determine to make any such purchases
at the time of a shareholder vote relating to our initial business combination, such purchases could have the effect of influencing the
vote necessary to approve such transaction. None of the funds in the Trust Account will be used to purchase shares in such transactions.
They will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller
or if such purchases are prohibited by Regulation M under the Exchange Act. 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. Subsequent to the consummation of the IPO, we will adopt an insider trading policy which will
require insiders to: (i) refrain from purchasing shares during certain blackout periods and when they are in possession of any material
non-public information and (ii) to clear all trades with our legal counsel prior to execution. We cannot currently determine whether
our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including but not
limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant
to a Rule 10b5-1 plan or determine that such a plan is not necessary.
In
the event that our initial shareholders, directors, officers or advisors, or their respective affiliates purchase shares in privately
negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders
would be required to revoke their prior elections to redeem their shares. We do not currently anticipate that such purchases, if any,
would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the
going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases
are subject to such rules, the purchasers will comply with such rules.
The
purpose of such purchases would be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of
obtaining shareholder approval of the business combination or (ii) to satisfy a closing condition in an agreement with a target that
requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears
that such requirement would otherwise not be met. This may result in the completion of our initial business combination that may not
otherwise have been possible.
In
addition, if such purchases are made, the public “float” of our ordinary shares may be reduced and the number of beneficial
holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our
securities on a national securities exchange.
Our
initial shareholders, directors, officers or advisors, or their respective affiliates anticipate that they may identify the shareholders
with whom our initial shareholders, directors, officers or advisors, or their respective affiliates, may pursue privately negotiated
purchases by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders following
our mailing of proxy materials in connection with our initial business combination. To the extent that our initial shareholders, directors,
officers or advisors, or their respective affiliates enter into a private purchase, they would identify and contact only potential selling
shareholders who have expressed their election to redeem their shares for a pro rata share of the Trust Account or vote against the business
combination. Such persons would select the shareholders from whom to acquire shares based on the number of shares available, the negotiated
price per share and such other factors as any such person may deem relevant at the time of purchase. 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. Our initial shareholders, directors, officers or advisors, or their respective affiliates,
will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.
Any
purchases by our initial shareholders, directors, officers or advisors, or their respective affiliates who are affiliated purchasers
under Rule 10b-18 under the Exchange Act 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. Rule 10b-18 has certain
technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our initial shareholders,
directors, officers or advisors, or their respective affiliates, will not make purchases of ordinary shares if the purchases would violate
Section 9(a)(2) or Rule 10b-5 of the Exchange Act.
Redemption
Rights for Public Shareholders upon Completion of Our Initial Business Combination
We
will provide our public shareholders with the opportunity to redeem all or a portion of their ordinary shares upon the completion of
our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account
as of two business days prior to the consummation of the initial business combination, including interest (which interest shall be net
of taxes payable) divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in
the Trust Account was initially be $10.30 per public share. The per-share amount we will distribute to investors who properly redeem
their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights include
the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Our initial shareholders, officers
and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with
respect to their founder shares and any public shares they may hold in connection with the completion of our initial business combination.
Limitations
on Redemptions
Our
amended and restated memorandum and articles of association provides that in no event will we redeem our public shares in an amount that
would cause our net tangible assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum
cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate
purposes or (iii) the retention of cash to satisfy other conditions. In the event the aggregate cash consideration we would be required
to pay for all 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 initial business combination exceed the aggregate amount of cash available to us, we will not complete
the initial business combination or redeem any shares, and all Class A ordinary shares submitted for redemption will be returned to the
holders thereof. We may, however, raise funds through the issuance of equity-linked securities or through loans, advances or other indebtedness
in connection with our initial business combination, including pursuant to forward purchase agreements or backstop arrangements we may
enter into following the closing of the IPO, in order to, among other reasons, satisfy such net tangible assets or minimum cash requirements.
Manner
of Conducting Redemptions
We
will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion
of our initial business combination either (i) in connection with a general meeting called to approve the business combination or (ii)
by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination or conduct
a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction
and whether the terms of the transaction would require us to seek shareholder approval under the law or stock exchange listing requirement.
Under Nasdaq rules, asset acquisitions and stock or capital stock or share purchases would not typically require shareholder approval
while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding ordinary
shares or seek to amend our amended and restated memorandum and articles of association would require shareholder approval. We intend
to conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC unless shareholder approval is required
by applicable law or stock exchange listing requirement or we choose to seek shareholder approval for business or other legal reasons.
So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply with Nasdaq rules.
If
a shareholder vote is not required and we do not decide to hold a shareholder vote for business or other legal reasons, we will, pursuant
to our amended and restated memorandum and articles of association:
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conduct
the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and |
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file
tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial
and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the
Exchange Act, which regulates the solicitation of proxies. |
Upon
the public announcement of our initial business combination, we or our initial shareholders will terminate any plan established in accordance
with Rule 10b5-1 to purchase our Class A ordinary shares in the open market if we elect to redeem our public shares through a tender
offer, to comply with Rule 14e-5 under the Exchange Act.
In
the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days,
in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until
the expiration of the tender offer period. In addition, the tender offer will be conditioned on public shareholders not tendering more
than a specified number of public shares which are not purchased by our initial shareholders, which number will be based on the requirement
that we will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either
immediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions
(so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement
which may be contained in the agreement relating to our initial business combination. If public shareholders tender more shares than
we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
If,
however, shareholder approval of the transaction is required by applicable law or stock exchange listing requirement, or we decide to
obtain shareholder approval for business or other legal reasons, we will, pursuant to our amended and restated memorandum and articles
of association:
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conduct
the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation
of proxies, and not pursuant to the tender offer rules; and |
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file
proxy materials with the SEC. |
We
expect that a final proxy statement would be mailed to public shareholders at least 10 days prior to the shareholder vote. However, we
expect that a draft proxy statement would be made available to such shareholders well in advance of such time, providing additional notice
of redemption if we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently
intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any shareholder vote even if we
are not able to maintain our Nasdaq listing or Exchange Act registration.
In
the event that we seek shareholder approval of our initial business combination, we will distribute proxy materials and, in connection
therewith, provide our public shareholders with the redemption rights described above upon completion of the initial business combination.
If
we seek shareholder approval, we will complete our initial business combination only if a we obtain the approval of an ordinary resolution
under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled
to vote thereon and who vote at a general meeting in favor of the business combination. In such case, pursuant to the terms of a letter
agreement entered into with us, our initial shareholders, officers and directors have agreed (and their permitted transferees will agree)
to vote any founder shares held by them and any public shares purchased during or after the IPO in favor of our initial business combination.
We expect that at the time of any shareholder vote relating to our initial business combination, our initial shareholders and their permitted
transferees will own at least 20% of our issued and outstanding ordinary shares entitled to vote thereon. Each public shareholder may
elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction. In addition, our initial
shareholders, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their
redemption rights with respect to their founder shares and public shares in connection with the completion of a business combination.
Our
amended and restated memorandum and articles of association provide that we will only redeem our public shares so long as (after such
redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial business
combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny
stock” rules). Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant
to an agreement relating to our initial business combination. For example, the proposed business combination may require: (i) cash consideration
to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes
or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the
event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption
plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount
of cash available to us, we will not complete the business combination or redeem any shares, and all Class A ordinary shares submitted
for redemption will be returned to the holders thereof.
Limitation
on Redemption Upon Completion of Our Initial Business Combination If We Seek Shareholder Approval
If
we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provides that a public
shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as
a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect
to Excess Shares. We believe this restriction will discourage shareholders from accumulating large blocks of shares, and subsequent attempts
by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force
us or our initial shareholders or their affiliates to purchase their shares at a significant premium to the then-current market price
or on other undesirable terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in
the IPO could threaten to exercise its redemption rights if such holder’s shares are not purchased by us or our initial shareholders
or their affiliates at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders’
ability to redeem no more than 15% of the shares sold in the IPO, we believe we will limit the ability of a small group of shareholders
to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business
combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.
However,
we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our
initial business combination. Our initial shareholders, officers and directors have, pursuant to a letter agreement entered into with
us, waived their right to have any founder shares or public shares held by them redeemed in connection with our initial business combination.
Unless any of our other affiliates acquires founder shares through a permitted transfer from an initial shareholders, and thereby becomes
subject to the letter agreement, no such affiliate is subject to this waiver. However, to the extent any such affiliate acquired public
shares in the IPO or thereafter through open market purchases, it would be a public shareholder and restricted from seeking redemption
rights with respect to any Excess Shares.
Redemption
of Public Shares and Liquidation If No Initial Business Combination
Our
amended and restated memorandum and articles of association provide that we will have only 15 months (or up to 18 months or 21 months,
as applicable) following the effectiveness of the IPO to consummate our initial business combination. However, if we anticipate that
we may not be able to consummate our initial business combination within 15 months, we may, but are not obligated to, extend the period
of time to consummate a business combination by two additional three-month periods each (for a total of up to 21 months following the
effectiveness of the IPO to complete a business combination). Our public shareholders will not be entitled to vote on, or redeem their
shares in connection with, any such extension. This feature is different from some other special purpose acquisition companies, in which
any extension of the special purpose acquisition company’s period to complete an initial business combination would require a vote
of the company’s shareholders and in connection with such vote shareholders would have the right to redeem their public shares.
Pursuant to the terms of our amended and restated memorandum and articles of association and the trust agreement entered into between
us and Continental Stock Transfer & Trust Company, in order to extend the time available for us to complete our initial business
combination, our sponsor or its affiliates or designees, upon five business days’ advance notice prior to each deadline, must deposit
into the Trust Account an additional $0.10 per ordinary share then outstanding ($2,200,996) on or prior to the date of such deadline.
In connection with each such additional deposit, our sponsor or its affiliates or designees will receive an additional 1,389,710 private
placement warrants, with the same terms as the original private placement warrants.
If
we are unable to complete our initial business combination within such 15-month (or 18-month or 21-month, as applicable) 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 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 15-month (or 18-month or 21-month, as
applicable) time period.
Our
initial shareholders, officers and directors 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 founder shares if we fail to complete our initial business
combination within 15 months (or up to 18 months or 21 months, as applicable) from the closing of the IPO. However, if our initial shareholders
acquire public shares after the IPO, 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 15-month (or up to 18-month or 21-month, as applicable)
time period.
Our
initial shareholders, officers and directors have agreed, pursuant to a written letter agreement with us, that they will not propose
any amendment to our amended and restated memorandum and articles of association (i) that would modify the substance or timing of our
obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of
our public shares if we do not complete our initial business combination within 15 months (or up to 18 months or 21 months, as applicable)
from the closing of the IPO or (ii) with respect to the other provisions relating to shareholders’ rights or pre-initial business
combination activity, unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval
of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including
interest (which interest shall be net of taxes payable) divided by the number of then outstanding public shares. However, we will only
redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior
to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (so that we
are not subject to the SEC’s “penny stock” rules). If this optional redemption right is exercised with respect to an
excessive number of public shares such that we cannot satisfy the net tangible asset requirement (described above), we would not proceed
with the amendment or the related redemption of our public shares.
We
expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be
funded from amounts remaining out of the $880,000 of proceeds held outside the Trust Account, although we cannot assure you that there
will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with
implementing our plan of dissolution, to the extent that there is any interest accrued in the Trust Account not required to pay taxes,
we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If
we were to expend all of the net proceeds of the IPO and the sale of the private placement warrants, other than the proceeds deposited
in the Trust Account, and without taking into account interest, if any, earned on the Trust Account, the per-share redemption amount
received by shareholders upon our dissolution would be approximately $10.30. 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 $10.30. While we
intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’
claims.
Although
we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target
businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any
kind in or to any monies held in the Trust Account for the benefit of our public shareholders, there is no guarantee that they will execute
such agreements or even if they execute such agreements that they would be prevented from bringing claims against the Trust Account including
but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the
enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds
held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account,
our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party
that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial
to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include
the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior
to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider
willing to execute a waiver. 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 registered
public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering
into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.30 per public share or (ii) such lesser
amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in value
of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes. This liability will not apply with
respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as
to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities
Act. Because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective
target businesses to acquire, the only third parties we currently expect to engage would be 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 their indemnity obligations and believe
that our sponsor’s only assets are securities of our company. 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 (i) $10.30 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, 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 $10.30 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 registered accounting firm), prospective target businesses or other
entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies
held in the Trust Account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of the IPO against
certain liabilities, including liabilities under the Securities Act. We will have access to up to $880,000 from the proceeds of the IPO
and the sale of the private placement warrants, with which to pay any such potential claims. 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. In the event that our offering expenses exceed our estimate of $620,000, we may fund such
excess with funds from the funds not to be held in the Trust Account. In such case, the amount of funds we intend to be held outside
the Trust Account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate
of $620,000, the amount of funds we intend to be held outside the Trust Account would increase by a corresponding amount.
If
we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed,
the proceeds held in the Trust Account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy
or insolvency estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any
bankruptcy or insolvency claims deplete the Trust Account, we cannot assure you we will be able to return $10.30 per unit to our public
shareholders. Additionally, if we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed
against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or
bankruptcy laws and/or insolvency laws as a “preferential transfer”, a “fraudulent conveyance”, a “fraud
in anticipation of winding up”, a “transaction in fraud of creditors” or a “misconduct in the course of winding
up.” As a result, a bankruptcy or insolvency court could seek to recover 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 earlier of (i) the completion of our initial
business combination, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended
and restated memorandum and articles of association to (A) modify the substance or timing of our obligation to provide for the redemption
of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete
our initial business combination within 15 months (or up to 18 months or 21 months, as applicable) from the closing of the IPO or (B)
with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity and (iii) the
redemption of all of our public shares if we are unable to complete our initial business combination within 15 months (or up to 18 months
or 21 months, as applicable) from the closing of the IPO, subject to applicable law. In no other circumstances will a shareholder have
any right or interest of any kind to or in the Trust Account. In the event we seek shareholder approval in connection with our initial
business combination, a shareholder’s voting in connection with the business combination alone will not result in a shareholder’s
redeeming its shares to us for an applicable pro rata share of the Trust Account. Such shareholder must have also exercised its redemption
rights described above.
Competition
In
identifying, evaluating and selecting a target business for our initial business combination, we may encounter intense competition from
other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged
buyout funds, and operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive
experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess
greater financial, technical, human and other resources than us. Our ability to acquire larger target businesses will be limited by our
available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore,
our obligation to pay cash in connection with our public shareholders who exercise their redemption rights may reduce the resources available
to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not
be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully
negotiating an initial business combination.
Employees
We
currently have four officers: Sung Yoon Woo, Sungwoo (Andrew) Hyung, Sunsik (Sung) Lee and Dr. Gene Young Cho. 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 will devote in any time period will vary based on whether a target business has been selected for our
initial business combination and the current stage of the business combination process. We do not intend to have any full time employees
prior to the completion of our business combination.
Available
Information
We
are required to file Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q with the SEC on a regular basis, and are required
to disclose certain material events (e.g., changes in corporate control, acquisitions or dispositions of a significant amount of assets
other than in the ordinary course of business and bankruptcy) in a Current Report on Form 8-K. The SEC maintains an Internet website
that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.
The SEC’s Internet website is located at http://www.sec.gov. In addition, the Company will provide copies of these documents
without charge upon request from us in writing 4 Orinda Way, Suite 100D, Orinda, CA 94563 or by telephone at (415) 340-0222.
ITEM
1A. RISK FACTORS.
An
investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together
with the other information contained in this Annual Report on Form 10-K, the prospectus associated with our initial public offering and
the Registration Statement, before making a decision to invest in our securities. If any of the following events occur, our business,
financial condition and operating results may be materially adversely affected.
RISKS
RELATING TO OUR SEARCH FOR, CONSUMMATION OF, OR INABILITY TO CONSUMMATE, A BUSINESS COMBINATION AND POST-BUSINESS COMBINATION RISKS
We
are a recently incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our ability
to achieve our business objective.
We
are a recently incorporated exempted company incorporated under the laws of the Cayman Islands with no operating results, and we will
not commence operations until obtaining funding through the IPO. Because we lack an operating history, you have no basis upon which to
evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses.
We have no plans, arrangements or understandings with any prospective target business concerning a business combination and may be unable
to complete our initial business combination. If we fail to complete our initial business combination, we will never generate any operating
revenues.
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
may not hold a shareholder vote to approve our initial business combination unless the business combination would require shareholder
approval under applicable Cayman Islands law or the rules of Nasdaq or if we decide to hold a shareholder vote for business or other
reasons. Examples of transactions that would not ordinarily require shareholder approval under Cayman Islands law or the rules of Nasdaq
include asset acquisitions and capital stock or share purchases, while transactions such as direct mergers with our company or transactions
where we issue more than 20% of our outstanding shares would require shareholder approval. For instance, Nasdaq rules currently allow
us to engage in a tender offer in lieu of a general meeting but would still require us to obtain shareholder approval if we were seeking
to issue more than 20% of our 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. Except as required by applicable law or Nasdaq rules, the decision as to whether we will seek
shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will
be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether
the terms of the transaction would otherwise require us to seek shareholder approval. Accordingly, we may consummate our initial business
combination even if holders of a majority of the issued and outstanding ordinary shares do not approve of the business combination we
consummate.
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 applicable 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 $10.30 per share on the liquidation
of our Trust Account and our warrants will expire worthless.
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.
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 within the completion window under our
amended and restated memorandum and articles of association, our public shareholders may receive only approximately $10.30 per share,
or less in certain circumstances, in connection with the liquidation of our Trust Account or redemption of our warrants will expire worthless.
We
expect to encounter intense competition from other entities having a business objective similar to ours, including private investors
(which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing
for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience
in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries.
Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial
resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target
businesses we could potentially acquire with the net proceeds of the IPO and the sale of the private placement warrants, our ability
to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources.
This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore,
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, the resources available to us for our initial business combination
may be reduced. 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 approximately $10.30 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 $10.30 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 $10.30 per share” and other risk factors herein.
In
recent years, the number of special purpose acquisition companies (“SPACs”) that have been formed has increased substantially.
Many potential targets for SPACs have already entered into an initial business combination, and there are still many SPACs seeking targets
for their initial business combination, as well as many such companies currently in registration. As a result, at times, fewer attractive
targets may be available, and it may require more time, more effort and more resources to identify a suitable target and to consummate
an initial business combination.
In
addition, because there are more SPACs seeking to enter into an initial business combination with available targets, the competition
for available targets with attractive fundamentals or business models may increase, which could cause targets companies to demand improved
financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical
tensions, or increases in the cost of additional capital needed to close business combinations or operate targets post-business combination.
This could increase the cost of, delay or otherwise complicate or frustrate our ability to find and consummate an initial business combination,
and may result in our inability to consummate an initial business combination on terms favorable to our investors altogether.
The
ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business
combination targets, which may make it difficult for us to enter into a business combination with a target.
We
may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that
we have a minimum net worth or a certain amount of cash. If too many public shareholders exercise their redemption rights, we would not
be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. Furthermore, we
will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately
prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (so that
we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may
be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption
requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition,
each as described above, we would not proceed with such redemption and the related business combination and may instead search for an
alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business
combination transaction with us.
The
ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete
the most desirable business combination or optimize our capital structure.
At
the time we enter into an agreement for our initial business combination, we will not know how many shareholders may exercise their redemption
rights, and therefore we will need to structure the transaction based on our expectations as to the number of shares that will be submitted
for redemption. If our initial business combination agreement requires us to use a portion of the cash in the Trust Account to pay the
purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the Trust
Account to meet such requirements, or arrange for third party financing. In addition, if a larger number of shares are submitted for
redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the Trust
Account or arrange for third party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence
of indebtedness at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provisions
of the Class B ordinary shares result in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of
the Class B shares at the time of the initial business combination. The above considerations may limit our ability to complete the most
desirable business combination available to us or optimize our capital structure.
The
ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability
that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If
our initial business combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or
requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful
is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the Trust Account until
we liquidate the Trust Account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market;
however, at such time our shares may trade at a discount to the pro rata amount per share in the Trust Account. In either situation,
you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate
or you are able to sell your shares in the open market.
The
requirement that we complete our initial business combination within the prescribed time frame under our amended and restated memorandum
and articles of association may give potential target businesses leverage over us in negotiating a business combination and may decrease
our ability to conduct due diligence on potential business combination targets as we approach our dissolution deadline, which could undermine
our ability to complete our initial business combination on terms that would produce value for our shareholders.
Any
potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete
our initial business combination within 15 months (or up to 18 months or 21 months, as applicable) from the closing of our IPO. Consequently,
such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial
business combination with that particular target business, we may be unable to complete our initial business combination with any target
business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct
due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
We
may not be able to 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 only
receive approximately $10.30 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
Our
initial shareholder, officers and directors have agreed that we must complete our initial business combination within 15 months (or up
to 18 months or 21 months, as applicable) from the closing of the IPO. We may not be able to find a suitable target business and complete
our initial business combination within such time period. If we have not completed our initial business combination within such time
period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more
than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then
on deposit in the Trust Account, including interest (which interest shall be net of taxes payable, and less up to $206,000 of interest
to pay dissolution expenses) divided by the number of then 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. In such case, our public shareholders may only receive approximately $10.30
per share, and our warrants will expire worthless. In certain circumstances, our public shareholders may receive less than $10.30 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 $10.30 per share” and other
risk factors herein.
Our
search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially
adversely affected by the recent coronavirus (COVID-19) outbreak, the geopolitical conditions resulting from the recent invasion of Ukraine
by Russia and subsequent sanctions against Russia, Belarus and related individuals and entities and the status of debt and equity markets,
as well as protectionist legislation in our target markets.
A
significant outbreak of COVID-19 has resulted in a widespread health crisis that could continue to, and other events (such as terrorist
attacks, natural disasters or a significant outbreak of other infectious diseases) could:
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● |
adversely
affect the economies and financial markets worldwide, leading to changes in interest rates, reduced liquidity and a continued slowdown
in global economic conditions; |
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|
|
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provoke
turbulence in financial markets, which could make it difficult or impossible to raise additional capital to consummate a deal including
debt or equity on terms acceptable to us or at all; |
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|
|
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disrupt
our operations and those of our potential partners, including those helping us diligence or search for targets, due to illness or
efforts to mitigate the pandemic, including but not limited to government-mandated shutdowns, other social distancing measures, travel
restrictions, office closures and measures impacting on working practices, such as the imposition of remote working arrangements,
and quarantine requirements and isolation measures under local laws; |
| |
|
|
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● |
negatively
impact the health of members of our team; |
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|
|
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● |
adversely
affect our ability to conduct redemptions; and |
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|
|
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● |
materially
and adversely affect the business of any potential target business with which we consummate a business combination. |
Furthermore,
we may be unable to complete a business combination at all if concerns relating to COVID-19 continue to restrict travel, limit the ability
to have meetings with potential investors or make it impossible or impractical to negotiate and consummate a transaction with the target
company’s personnel, vendors and services providers in a timely manner, if at all. The extent to which COVID-19 impacts our search
for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information
which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. The global
spread of COVID-19 could materially and adversely affect our operations and financial condition due to the disruptions to commerce, reduced
economic activity and other unforeseen consequences of a pandemic that are beyond our control. While vaccines for COVID-19 are being,
and have been, developed, there is no guarantee that any such vaccine will be effective, work as expected or be made available or will
be accepted on a significant scale and in a timely manner. If the disruptions posed by COVID-19 or other matters of global concern continue
for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which
we ultimately consummate a business combination, may be materially adversely affected.
Finally,
the outbreak of COVID-19 or other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious
diseases) may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such
as those related to the market for our securities.
United
States and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the recent
invasion of Ukraine by Russia in February 2022. In response to such invasion, the North Atlantic Treaty Organization (“NATO”)
deployed additional military forces to eastern Europe, and the United States, the United Kingdom, the European Union and other countries
have announced various sanctions and restrictive actions against Russia, Belarus and related individuals and entities, including the
removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system.
Certain countries, including the United States, have also provided and may continue to provide military aid or other assistance to Ukraine
during the ongoing military conflict, increasing geopolitical tensions with Russia. The invasion of Ukraine by Russia and the resulting
measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union and
other countries have created global security concerns that could have a lasting impact on regional and global economies. Although the
length and impact of the ongoing military conflict in Ukraine is highly unpredictable, the conflict could lead to market disruptions,
including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions. Additionally,
Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability
and lack of liquidity in capital markets.
Any
of the abovementioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting
from the Russian invasion of Ukraine and subsequent sanctions, could adversely affect our search for a business combination and any target
business with which we ultimately consummate a business combination. The extent and duration of the Russian invasion of Ukraine, resulting
sanctions and any related market disruptions are impossible to predict, but could be substantial, particularly if current or new sanctions
continue for an extended period of time or if geopolitical tensions result in expanded military operations on a global scale. Any such
disruptions may also have the effect of heightening many of the other risks described in the “Risk Factors” section of the
final prospectus filed in connection with our initial public offering, such as those related to the market for our securities, cross-border
transactions or our ability to raise equity or debt financing in connection with any particular business combination. If these disruptions
or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the
operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.
In
addition, the recent invasion of Ukraine by Russia, and the impact of sanctions against Russia and the potential for retaliatory acts
from Russia, could result in increased cyber-attacks against U.S. companies.
If
we seek shareholder approval of our initial business combination, our initial shareholders, directors, officers, advisors and their affiliates
may elect to purchase shares from public shareholders, which may influence a vote on a proposed business combination and reduce the public
“float” of our 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 initial shareholders, directors, officers, advisors or their respective affiliates,
may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial
business combination, although they are under no obligation to do so. 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 initial shareholders, directors, officers, or their respective affiliates purchase
shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such
selling shareholders would be required to revoke their prior elections to redeem their shares. The 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 the business combination and thereby
increase the likelihood of obtaining shareholder approval of the business combination or to satisfy a closing condition in an agreement
with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,
where it appears that such requirement would otherwise not be met. This may result in the completion of our initial business combination
that may not otherwise have been possible.
In
addition, if such purchases are made, the public “float” of our ordinary shares 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.
If
a shareholder fails to receive notice of our offer to redeem its 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.
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 public warrants, potentially at a loss.
Our
public shareholders will be entitled to receive funds from the Trust Account only upon the earlier to occur of: (i) the completion of
our initial business combination, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to
amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide
for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if
we do not complete our initial business combination within 15 months (or up to 18 months or 21 months, as applicable) from the closing
of the IPO, or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity
and (iii) the redemption of all of our public shares if we are unable to complete our initial business combination within 15 months (or
up to 18 months or 21 months, as applicable) from the closing of the IPO, subject to applicable law and as further described herein.
In no other circumstances will a public shareholder have any right or interest of any kind in the Trust Account. Holders of public warrants
will not have any right to the proceeds held in the Trust Account with respect to the public warrants. Accordingly, to liquidate your
investment, you may be forced to sell your public shares or public warrants, potentially at a loss.
You
will not be entitled to protections normally afforded to investors of many other blank check companies.
Since
the net proceeds of the IPO and the sale of the private placement warrants are intended to be used to complete an initial business combination
with a target business that has not been 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 and filed a Current Report on Form 8-K, including
an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check
companies, such as Rule 419.
Accordingly,
investors will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately
tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419.
Moreover, if the IPO 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
the net proceeds of the IPO and the sale of private placement warrants not being held in the Trust Account are insufficient to allow
us to operate for at least the 15 months (or up to 18 months or 21 months, as applicable) following our IPO, we may be unable to complete
our initial business combination.
The
funds available to us outside of the Trust Account may not be sufficient to allow us to operate for at least the 15 months (or up to
18 months or 21 months, as applicable) following our IPO, assuming that our initial business combination is not completed during that
time. We expect to incur significant costs in pursuit of our acquisition plans. Management’s plans to address this need for capital
through the IPO and potential loans from certain of our affiliates are discussed in the section of this report titled “Management’s
Discussion and Analysis of Financial Condition and Results of Operations.” However, our affiliates are not obligated to make loans
to us in the future, and we may not be able to raise additional financing from unaffiliated parties necessary to fund our expenses. Any
such event in the future may negatively impact the analysis regarding our ability to continue as a going concern at such time.
We
believe the funds available to us outside of the Trust Account will be sufficient to allow us to operate for at least the 15 months (or
up to 18 months or 21 months, as applicable) following our IPO; however, we cannot assure you that our estimate is accurate. Of the funds
available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target
business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters
of intent 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 entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently
required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching
for, or conduct due diligence with respect to, a target business. If we are unable to complete our initial business combination, our
public shareholders may receive only approximately $10.30 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 $10.30 per share
on the redemption of their shares.
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
if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will surface
all material issues that may be present inside 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 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.
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 $10.30 per share.
Our
placing of funds in the Trust Account may not protect those funds from third-party claims against us. Although we will seek to have all
vendors, service providers (other than our independent registered accounting firm), prospective target businesses or other entities with
which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to 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 $10.30 per share initially held in the Trust Account, due to claims of such creditors.
Pursuant
to the letter agreement which is filed as an exhibit to this Form 10-K, 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 registered accounting firm) for services rendered or products sold to us,
or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the
Trust Account to below (i) $10.30 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 of the IPO 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 their indemnity obligations and believe that our sponsor’s only assets are securities of our company.
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 $10.30
per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount
per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by
third parties including, without limitation, claims by vendors and prospective target businesses.
Our
directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in
the Trust Account available for distribution to our public shareholders.
In
the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.30 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, who are also members
of our sponsor, 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 $10.30 per share.
If,
after we distribute the proceeds in the Trust Account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary
bankruptcy or winding-up petition is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such
proceeds, and the members of our Board of Directors may be viewed as having breached their fiduciary duties to our creditors, thereby
exposing the members of our Board of Directors and us to claims of punitive damages.
If,
after we distribute the proceeds in the Trust Account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary
bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed
under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent
conveyance.” As a result, a bankruptcy or insolvency court could seek to recover all amounts received by our shareholders. In addition,
our Board of Directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby
exposing itself and us to claims of punitive damages, by paying public shareholders from the Trust Account prior to addressing the claims
of creditors.
If,
before distributing the proceeds in the Trust Account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary
bankruptcy or winding-up petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority
over the claims of our shareholders and the per-share amount that would otherwise be received by our shareholders in connection with
our liquidation may be reduced.
If,
before distributing the proceeds in the Trust Account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary
bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject
to applicable bankruptcy or insolvency law, and may be included in our bankruptcy or insolvency estate and subject to the claims of third
parties with priority over the claims of our shareholders. To the extent any bankruptcy or insolvency claims deplete the Trust Account,
the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
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 consummation of our initial business combination. Our public shareholders will
not have the right to appoint directors prior to the consummation of our initial business combination.
In
accordance with Nasdaq corporate governance requirements, we are not required to hold an annual general meeting until no later than one
full 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 in order to appoint directors. Until we hold an annual general meeting, public shareholders
may not be afforded the opportunity to discuss company affairs with management. In addition, prior to our initial business combination,
only holders of our founder shares will have the right to vote on the appointment of our directors. Our initial shareholders have agreed
that, subject to applicable law, neither of our initial shareholders will vote their founder shares to change the size of our Board of
Directors or, without the others’ consent, with respect to appointment of directors. As holders of our Class A ordinary shares,
our public shareholders will not have the right to vote on the appointment of directors prior to consummation of our initial business
combination.
Because
we are not limited to a particular industry or any specific target businesses with which to pursue our initial business combination,
you will be unable to ascertain the merits or risks of any particular target business’s operations.
Although
we expect to focus our search for a suitable initial business combination with companies that are either developing breakthrough technology
in life sciences or advancing a platform for sustainable technology, we may pursue acquisition opportunities in any one of numerous industries,
except that we will not, under our amended and restated memorandum and articles of association, be permitted to effectuate our business
combination with another blank check company or similar company with nominal operations. Because we have not yet identified or approached
any specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any
particular target business’ operations, results of operations, cash flows, liquidity, financial condition or prospects.
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 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.
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 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.
We
may seek acquisition opportunities with 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 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 volatile revenues or earnings and difficulties in obtaining and retaining key personnel. Although our officers and directors
will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all
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
are not required to obtain an opinion from an independent investment banking or from an independent registered public accounting firm,
and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our company
from a financial point of view.
Unless
we complete our business combination with an affiliated entity, or our Board of Directors cannot independently determine the fair market
value of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm or another
independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or from an independent accounting
firm that the price we are paying for a target 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. However, if our Board of Directors is unable to determine the fair value
of an entity with which we seek to complete an initial business combination based on such standards, we will be required to obtain an
opinion as described above.
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 statements in time for us to
disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time
frame.
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, 2023. Only in the event we are deemed to be a large accelerated filer or an accelerated
filer 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 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
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 will not provide a specified maximum redemption threshold, except that we
will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately
prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (such
that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which
may be contained in the agreement relating to our initial business combination. As a result, we may be able to complete our initial business
combination even though a substantial majority of our public 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
initial shareholders, directors, officers or advisors, or their respective affiliates. In the event the aggregate cash consideration
we would be required to pay for all 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 ordinary shares submitted for redemption will be returned to the holders
thereof, and we instead may search for an alternate business combination.
In
order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their
charters and 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 our shareholders may not support.
In
order to effectuate a business combination, blank check companies have, in the 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 period of time in which it had to consummate a business combination. 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 in which we
have to consummate a business combination through amending our amended and restated memorandum and articles of association will require
at least a special resolution of our shareholders as a matter of Cayman Islands law, which requires the affirmative vote of a majority
of at least two-thirds of the shareholders who attend and vote at a general meeting of the company, and amending our warrant agreement
will require a vote of holders of at least a majority of the number of the then outstanding public warrants and, solely with respect
to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private
placement warrants, a majority of the number of the then outstanding private placement warrants (except for provisions of the warrant
agreement enabling amendments without shareholder or warrant holder approval that are necessary in the good faith determination of our
board of directors (taking into account then existing market precedents) to allow for the warrants to be classified as equity in our
financial statements). In addition, our amended and restated memorandum and articles of association require us to provide our public
shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum
and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial
business combination or to redeem 100% of our public shares if we do not complete an initial business combination within 15 months from
the closing of the IPO or any extension period or (B) with respect to any other material change.
We
may reincorporate in another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction may
govern some or all of our future material agreements and we may not be able to enforce our legal rights.
In
connection with our initial business combination, we may relocate the home jurisdiction of our business from the Cayman Islands to another
jurisdiction. If we determine to do this, the laws of such jurisdiction may govern some or all of our future material agreements. The
system of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as
in the United States. The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss
of business, business opportunities or capital.
The
provisions of our amended and restated memorandum and articles of association that relate to our pre-initial business combination activity
(and corresponding provisions of the agreement governing the release of funds from our Trust Account), including an amendment to permit
us to withdraw funds from the Trust Account such that the per share amount investors will receive upon any redemption or liquidation
is substantially reduced or eliminated, may be amended with the approval of holders of at least two-thirds of our ordinary shares who
attend and vote in 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-initial business combination activity, without approval by a certain percentage of the company’s
shareholders. In those companies, amendment of these provisions requires approval by between 90% and 100% of the company’s public
shareholders. Our amended and restated memorandum and articles of association provide that any of its provisions, including those
related to pre-initial business combination activity (including the requirement to deposit proceeds of the IPO and the private placement
of warrants into the Trust Account and not release such amounts except in specified circumstances, and to provide redemption rights to
public shareholders as described herein and in our amended and restated memorandum and articles of association or an amendment to permit
us to withdraw funds from the Trust Account such that the per share amount investors will receive upon any redemption or liquidation
is substantially reduced or eliminated), but excluding the provision of the articles relating to the appointment of directors, may be
amended if approved by holders of at least two-thirds of our ordinary shares who attend and vote in a general meeting, and 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 ordinary shares. Should our initial shareholders vote all their shares in favor of any such amendment at a meeting at which only
the minimum quorum is present (and if the representative shares are voted in favor of the amendment), we would require approximately
11,250,001, or 56.3%, of the public shares issued in the IPO to be voted in favor of any such amendment for its approval. We may not
issue additional securities that can vote on amendments to our amended and restated memorandum and articles of association. Our initial
shareholders, which collectively beneficially own 20% of our ordinary shares, will participate in any vote to amend our amended and restated
memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner it chooses. 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-initial
business combination behavior more easily than some other blank check companies, and this may increase our ability to complete a business
combination with which you do not agree. Our shareholders may pursue remedies against us for any breach of our amended and restated memorandum
and articles of association.
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.
Although
we believe that the net proceeds of the IPO and the sale of the private placement warrants will be sufficient to allow us to complete
our initial business combination, because we have not yet identified any prospective target business we cannot ascertain the capital
requirements for any particular transaction. If the net proceeds of the IPO and the sale of the private placement warrants prove to be
insufficient, either because of the size of our initial business combination, 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 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 $10.30 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 $10.30 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 $10.30 per share” and other risk factors below.
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 $10.30 per share, or less than such amount in certain circumstances, on the liquidation of our Trust Account
and our warrants will expire worthless.
We
anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements,
disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants,
attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the
proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we
may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will
result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire
or merge with another business. If we are unable to complete our initial business combination, our public shareholders may receive only
approximately $10.30 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 $10.30 per share” and other risk factors.
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 his or her 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 have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial business
combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
When
evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the
target business’ management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities
we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company,
the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any 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.
The
officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The departure of a
target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role of an
acquisition candidates’ 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.
If
we effect our initial business combination with a company with operations or opportunities outside of the United States, we would be
subject to a variety of additional risks that may negatively impact our operations.
If
we effect our initial business combination with a company with operations or opportunities outside of the United States, we would be
subject to any special considerations or risks associated with companies operating in an international setting, including any of the
following:
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costs
and difficulties inherent in managing cross-border business operations; |
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rules
and regulations regarding currency redemption; |
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complex
corporate withholding taxes on individuals; |
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laws
governing the manner in which future business combinations may be effected; |
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tariffs
and trade barriers; |
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regulations
related to customs and import/export matters; |
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longer
payment cycles; |
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tax
issues, such as tax law changes and variations in tax laws as compared to the United States; |
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currency
fluctuations and exchange controls; |
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rates
of inflation; |
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challenges
in collecting accounts receivable; |
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cultural
and language differences; |
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employment
regulations; |
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crime,
strikes, riots, civil disturbances, terrorist attacks and wars; and |
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deterioration
of political relations with the United States. |
We
may not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer, which may adversely
impact our results of operations and financial condition.
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 no commitments as of the date of the IPO to issue any notes or other debt securities, or to otherwise incur outstanding debt
following the IPO, we may choose to incur substantial debt to complete our initial business combination. We have agreed that we will
not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or
to the monies held in the Trust Account. As such, no issuance of debt will affect the per-share amount available for redemption from
the Trust Account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
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default
and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt
obligations; |
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acceleration
of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants
that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
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our
immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; |
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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 outstanding; |
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our
inability to pay dividends on our ordinary shares; |
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using
a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends
on our ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
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limitations
on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
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increased
vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
and |
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limitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution
of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
We
may only be able to complete one business combination with the proceeds of the IPO and the sale of the private placement warrants, which
will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification
may negatively impact our operations and profitability.
Of
the net proceeds from the IPO and the sale of the private placement warrants, $226,702,620 will be available to complete our business
combination and pay related fees and expenses (which includes up to approximately $8,105,480 for the payment of deferred underwriting
commissions).
We
may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within
a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business
because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma
financial statements with the SEC that present operating results and the financial condition of several target businesses as if they
had been operated on a combined basis. By completing our initial business combination with only a single entity our lack of diversification
may subject us to numerous economic, competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit
from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several
business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may
be:
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solely
dependent upon the performance of a single business, property or asset; or |
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dependent
upon the development or market acceptance of a single or limited number of products, processes or services. |
This
lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial
adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We
may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete
our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If
we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers
to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make
it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we
could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence
investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations
and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks,
it could negatively impact our profitability and results of operations.
We
may attempt to complete our initial business combination with a private company about which little information is available, which may
result in 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.
As
the number of special purpose acquisition companies evaluating targets increases, attractive targets may become scarcer and there may
be more competition for attractive targets. This could increase the cost of our initial business combination and could even result in
our inability to find a target or to consummate an initial business combination.
In
recent years, the number of special purpose acquisition companies that have been formed has increased substantially. Many potential targets
for special purpose acquisition companies have already entered into an initial business combination, and there are still many special
purpose acquisition companies seeking targets for their initial business combination, as well as many such companies currently in registration.
As a result, at times, fewer attractive targets may be available, and it may require more time, more effort and more resources to identify
a suitable target and to consummate an initial business combination.
In
addition, because there are more special purpose acquisition companies seeking to enter into an initial business combination with available
targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause targets
companies to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry
sector downturns, geopolitical tensions, or increases in the cost of additional capital needed to close business combinations or operate
targets post-business combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find and
consummate an initial business combination, and may result in our inability to consummate an initial business combination on terms favorable
to our investors altogether.
Because
we intend to seek a business combination with a target business or businesses in the healthcare industry and/or sustainability sector,
we expect our future operations to be subject to risks associated with this industry.
While
we may pursue an acquisition or a target in any business or industry or across any geography, we intend to focus our search for a target
business in healthcare industry and/or the sustainability sector.
Life
science related companies (e.g., healthcare, biopharmaceuticals, and digital health) are typically subject to greater governmental regulation
than most other industries whether in the U.S. or global. Industries such as biopharmaceuticals are also the most research-intensive
industries. Many of the risk mentioned associated with these industries involve regulation around research and development (R&D)
of a product or technical risk factors. For example, a healthcare-related company must receive government approval before introducing
new drugs and medical devices or procedures. Drug development and the probability of success through the stages of development are key
concerns when considering pharmaceutical companies as most studies show that a drug development program’s probability of success
from Phase I trials to U.S. FDA approval is only 9.6%, based on a study from BIO. Any potential regulatory or policy changes can impact
such success rates to even lower probabilities. Failure to obtain governmental approval of a key drug or device or other regulatory action
could have a material adverse effect on the business of a target company. Such changes may impact the demand for or costs of certain
products and services as changes may delay the introduction of these products and services to the marketplace, resulting in increased
development costs, delayed cost recovery and loss of competitive advantage to the extent that rival companies have developed competing
products or procedures, adversely affecting the company’s revenues and profitability. These types of risks are unique to each company
but typically found across most life science focused companies. Other risks can involve other areas of regulatory compliance such as
monitoring drug safety even after approval. Finally, expansion of facilities by healthcare related providers is subject to “determinations
of need” by the appropriate government authorities. This process not only increases the time and cost involved in these expansions,
but also makes expansion plans uncertain, limiting the revenue and profitability growth potential of healthcare related facilities operators
There also exists potential regulatory risk due to changes to laws, regulations
or interpretations that can cause compliance costs or cause disruptions to companies’ productivity as a business. Overall, these
firms are exposed to greater financial risk than other industries and can also be sensitive to policy changes that could potentially
affect industry-wide profitability. These risks are considered systematic as policy changes can impact industry-wide R&D spending
or go-to-market strategies as well as impact cash flow and product sales. For instance, in recent years, governmental budgets across
develop countries have come under pressure to reduce spending and control healthcare costs, which could both adversely affect regulatory
processes and public funding available for healthcare products, services and facilities. These healthcare reforms may institute regulatory
mandates and other measures designed to constrain medical costs, including coverage and reimbursement for healthcare services, drugs,
or devices. Potential regulatory changes include drug price caps or access and healthcare cost transparency, all of which can potentially
become a risk to profitability for these companies. The ultimate effects of healthcare reform or any future legislation, regulation,
or healthcare initiatives, if any, on the healthcare sector, whether implemented at the federal or state level or internationally, cannot
be predicted with certainty and such reform, legislation, regulation, or initiatives may adversely affect the performance of a potential
business combination.
Technical
expertise is also crucial in the life science industry as the products produced in these sectors are complex – it would take the
average investor significant time to understand the factors that affect the product’s chances of success. Even large, well-established
financial institutions typically have a poor track record when it comes to forecasting the performance of companies in the biopharmaceuticals
or healthcare space. Therefore, technical expertise is crucial in these industries, especially at the management level of companies.
There is risk with certain companies in this sector that may not have the right level of technical expertise at the management level
or management is valuation-driven with stronger focus on profitability than having the technical expertise of understanding how research
findings (e.g., regarding side effects or comparative benefits of one or more particular treatments, services or products) and technological
innovation (together with patent expirations) may make any particular treatment, service or product less attractive if previously unknown
or underappreciated risks are revealed, or if a more effective, less costly or less risky solution is or becomes available. Any such
development could have an adverse effect on the companies that are target businesses for investment.
Finally,
certain healthcare related companies depend on the exclusive rights or patents for the products they develop and distribute. Patents
have a limited duration and, upon expiration, other companies may market substantially similar “generic” products that are
typically sold at a lower price than the patented product, causing the original developer of the product to lose market share and/or
reduce the price charged for the product, resulting in lower profits for the original developer. As a result, the expiration of patents
may adversely affect the profitability of these companies. The profitability of healthcare related companies may also be affected, among
other factors, by restrictions on government reimbursement for medical expenses, rising or falling costs of medical products and services,
pricing pressure, an increased emphasis on outpatient services, a limited product offering, industry innovation, changes in technologies
and other market developments. Finally, because the products and services of healthcare related companies affect the health and well-being
of many individuals, these companies are especially susceptible to product liability lawsuits.
In
addition, risks inherent in investments in the sustainability sector include, but are not limited to, the following:
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difficulty
in competing against established companies who may have greater financial resources and/or a more effective or established localized
business presence and/or an ability to introduce and sell sustainable technology at minimal or negative operating margins for sustained
periods of time; |
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difficulty
in establishing and implementing a commercial and operational approach adequate to address the specific needs of the markets we are
pursuing; |
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the
speculative nature of and high degree of risk involved in investments in sustainability sector; |
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availability
of key inputs, such as strategic consumables, raw materials and necessary equipment; |
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changes
in global supply and demand and prices for commodities; |
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impact
of energy conservation efforts; |
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technological
advances affecting energy production and consumption; |
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denial
or delay of receiving requisite regulatory approvals and/or permits; |
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governmental
or regulatory actions in any or all of our chosen markets, even if well intentioned from a climate perspective, could have an immediate
and dramatic effect on our business operations and opportunities; |
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difficulty
in identifying effective local partners and developing any necessary partnerships with local businesses on commercially and environmentally
acceptable terms; |
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inability
to comply with governmental regulations or obtain governmental approval for our products and/or business operations; |
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difficulty
in competing successfully with improved technologies introduced subsequent to our own; |
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the
possibility of applying an ineffective commercial approach to targeted markets, including product offerings that may not meet market
needs with respect to their environmental or non-environmental attributes; |
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inability
to build strong brand identity, environmental credibility or reputation for exceptional customer satisfaction and service; |
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difficulty
in generating sufficient sales volumes at economically sustainable profitability levels; and |
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difficulty
in timely identifying, attracting, training, and retaining qualified sales, technical, and other personnel |
We
may seek acquisition opportunities with an early stage company, a financially unstable business or an entity lacking an established record
of revenue or earnings, which could subject us to volatile revenues or earnings, intense competition and difficulties in obtaining and
retaining key personnel.
To
the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages
of development or growth, we may be affected by numerous risks inherent in such company or business. 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 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. 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 seek business combination opportunities with a high degree of complexity that require significant operational improvements, which
could delay or prevent us from achieving our desired results.
We
may seek business combination opportunities with large, highly complex companies that we believe would benefit from operational improvements.
While we intend to implement such improvements, to the extent that our efforts are delayed or we are unable to achieve the desired improvements,
the business combination may not be as successful as we anticipate.
To
the extent we complete our initial business combination with a large complex business or entity with a complex operating structure, we
may also be affected by numerous risks inherent in the operations of the business with which we combine, which could delay or prevent
us from implementing our strategy. Although our management team will endeavor to evaluate the risks inherent in a particular partner
business and its operations, we may not be able to properly ascertain or assess all of the significant risk factors until we complete
our business combination. If we are not able to achieve our desired operational improvements, or the improvements take longer to implement
than anticipated, we may not achieve the gains that we anticipate. Furthermore, some of these risks and complexities may be outside of
our control and leave us with no ability to control or reduce the chances that those risks and complexities will adversely impact a partner
business. Such combination may not be as successful as a combination with a smaller, less complex organization.
Changes
in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and
complete an initial business combination.
In
recent months, the market for directors and officers liability insurance for special purpose acquisition companies has changed in ways
adverse to us and our management team. Fewer insurance companies are offering quotes for directors and officers liability coverage, the
premiums charged for such policies have generally increased and the terms of such policies have generally become less favorable. These
trends may continue into the future.
The
increased cost and decreased availability of directors and officers liability insurance could make it more difficult and more expensive
for us to negotiate an initial business combination. In order to obtain directors and officers liability insurance or modify its coverage
as a result of becoming a public company, the post-business combination entity might need to incur greater expense, accept less favorable
terms or both. However, any failure to obtain adequate directors and officers liability insurance could have an adverse impact on the
post-business combination’s ability to attract and retain qualified officers and directors. In addition, even after we were to
complete an initial business combination, our directors and officers could still be subject to potential liability from claims arising
from conduct alleged to have occurred prior to the initial business combination. As a result, in order to protect our directors and officers,
the post-business combination entity may need to purchase additional insurance with respect to any such claims (“run-off insurance”).
The need for run-off insurance would be an added expense for the post-business combination entity, and could interfere with or frustrate
our ability to consummate an initial business combination on terms favorable to our investors.
The
failure of Silicon Valley Bank and recent turmoil in the banking industry may negatively impact our business, results of operations and
financial condition.
Actual
events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, or other
companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of
these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. On March 10, 2023,
the California Department of Financial Protection and Innovation closed Silicon Valley Bank (“SVB”), the parent company of
SVB Securities LLC one of the underwriters to our initial public offering, and appointed Federal Deposit Insurance Corporation (the “FDIC”)
receiver. Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership. Although depositors
at SVB received access to their funds, uncertainty and liquidity concerns in the broader financial services industry remain. Inflation
and rapid increases in interest rates have led to a decline in the trading value of previously issued government securities with interest
rates below current market interest rates. The U.S. Department of Treasury, FDIC and Federal Reserve Board have announced a program to
provide up to $25 billion of loans to financial institutions secured by such government securities held by financial institutions to
mitigate the risk of potential losses on the sale of such instruments. However, widespread demands for customer withdrawals or other
needs of financial institutions for immediate liquidity may exceed the capacity of such program. There is no guarantee that the U.S.
Department of Treasury, FDIC and Federal Reserve Board will provide access to uninsured funds in the future in the event of the closure
of other banks or financial institutions in a timely fashion or at all.
The
ultimate outcome of these events, and whether further regulatory actions will be taken, cannot be predicted. The extent to which these
events impact our search for and completion of a business combination with a target business will depend on future developments, which
are highly uncertain and cannot be predicted, including new information which may emerge concerning similarly situated financial institutions.
In addition, investor concerns regarding the U.S. or international financial systems could impact our potential business targets as they
may face a material decline in favorable commercial terms or available funding. This may make it more challenging for us to find a suitable
target and complete a business combination. Further, our ability to consummate a business combination may be dependent on the ability
to raise equity and debt financing, which may be impacted by these events.
RISKS
RELATING TO OUR SPONSOR AND 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. The role of our key
personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target
business in senior management or advisory positions following our initial business combination, it is likely that some or all of the
management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial
business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be
unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources
helping them become familiar with such requirements.
We
are dependent upon our officers and directors and their departure could adversely affect our ability to operate.
Our
operations are dependent upon a relatively small group of individuals and, in particular, Sung Yoon Woo, our Chief Executive Officer;
Sungwoo (Andrew) Hyung, our Chief Financial Officer; Sungsik (Sung) Lee, our President; Gene Young Cho, our Chief Operating Officer;
and our directors. We believe that our success depends on the continued service of our officers and directors, at least until we have
completed our initial business combination. In addition, our officers and directors are not required to commit any specified amount of
time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities,
including identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement
with, or key-man insurance on the life of, any of our directors or officers. The unexpected loss of the services of one or more of our
directors or officers could have a detrimental effect on us.
Since
our initial shareholders, executive officers and directors will lose their entire investment in us if our initial business combination
is not completed, a conflict of interest may arise in determining whether a particular target is appropriate for our initial business
combination.
On
October 4, 2021, our sponsor purchased 5,750,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.0043
per share. Prior to the initial investment in the company of $25,000 by our sponsor, the company had no assets, tangible or intangible.
Our initial shareholders will own 20% of our issued and outstanding shares after the IPO. If we increase or decrease the size of the
offering, we will effect a capitalization or share surrender or redemption or other appropriate mechanism, as applicable, immediately
prior to the consummation of the offering in such amount as to maintain the ownership of our initial shareholders prior to the IPO at
20% of our issued and outstanding ordinary shares upon the consummation of the IPO. The founder shares will be worthless if we do not
complete an initial business combination.
In
addition, our sponsor, together with one of its affiliates, committed to purchase an aggregate of 6,666,667 private placement warrants,
each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.50 per warrant, or $10,000,000 in the aggregate,
in a private placement that closed simultaneously with the closing of the IPO. Our sponsor, together with one of its affiliates, have
purchased 6,666,667 private placement warrants, but such private placement warrants will be worthless if we do not complete our initial
business combination. Each of our officers (and directors) has made an investment in our sponsor and is a member of our sponsor. The
personal and financial interests of our executive officers and directors may influence their motivation in identifying and selecting
a target business combination, completing an initial business combination and influencing the operation of the business following the
initial business combination. This risk may become more acute as the 15-month (or 18-month or 21-month, as applicable) anniversary of
the closing of the IPO nears, which is the deadline for our completion of an initial business combination.
The
founder shares are identical to the ordinary shares included in the units being sold in the IPO except that (i) holders of the founder
shares have the right to vote on the appointment of our directors prior to our initial business combination, (ii) the founder shares
are subject to certain transfer restrictions, (iii) our initial shareholders, 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 founder shares and public 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 founder shares if we fail to complete our initial business combination within 15 months (or up
to 18 months or 21 months, as applicable) from the closing of the IPO (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) and (iv) the founder shares will automatically convert into our Class A ordinary shares at the time of our initial business
combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution
rights, as described herein and in our amended and restated memorandum and articles of association.
Certain
of our officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination
as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial
business combination.
Our
officers and directors are not required to commit their full time to our affairs, which may result in a conflict of interest in allocating
their time between our operations and our search for a business combination and their other businesses. We do not intend to have any
full-time employees prior to the completion of our initial business combination. Our officers are not obligated to contribute any specific
number of hours per week to our affairs, and certain of our officers are engaged in other business endeavors for which they may be entitled
to substantial compensation. Our independent directors also serve as officers and board members for other entities. If our officers’
and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current
commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete
our initial business combination.
Certain
of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities
similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular
business opportunity should be presented.
After
the IPO and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with
one or more businesses. Our initial shareholders 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 a similar business.
Our
officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the other
entities to which they owe certain fiduciary or contractual duties. As a result, they will have a duty to offer acquisition opportunities
to certain clients or other entities. Accordingly, our officers and directors 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.
Our
officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our
interests.
We
have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect
pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or
have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our initial shareholders,
our directors or officers. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business
activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
We
may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated
with our initial shareholders, officers, directors or existing holders which may raise potential conflicts of interest.
In
light of the involvement of our initial shareholders, officers and directors with other entities, we may decide to acquire one or more
businesses affiliated with our initial shareholders, officers and directors. Our officers and directors also serve as officers and board
members for other entities. Such entities may compete with us for business combination opportunities. Our initial shareholders, 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 and such transaction was
approved by a majority of our independent directors. Despite our agreement to obtain an opinion from an independent investment banking
firm or another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or an independent
accounting firm, regarding the fairness to our company from a financial point of view of a business combination with one or more domestic
or international businesses affiliated with our initial shareholders, officers or directors, potential conflicts of interest still may
exist and, as a result, the terms of the business combination may not be as advantageous to our public shareholders as they would be
absent any conflicts of interest.
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 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. 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.
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 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 ordinary shares in exchange for all of the issued and outstanding capital
stock, shares or other equity interests of a target. In this case, we would acquire a 100% interest in the target. However, as a result
of the issuance of a substantial number of new 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 portion 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.
Our
initial shareholders will control the appointment of our Board of Directors until consummation of our initial business combination and
will hold a substantial interest in us. As a result, they will appoint all of our directors and may exert a substantial influence on
actions requiring shareholder vote, potentially in a manner that you do not support.
Since
the IPO, our initial shareholders own 20% of our issued and outstanding ordinary shares. In addition, the founder shares, all of which
are held by our initial shareholders, entitle the initial shareholders to appoint all of our directors prior to our initial business
combination. Holders of our public shares will have no right to vote on the appointment of directors during such time. 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. As a result, you will not have any influence over the appointment of directors prior
to our initial business combination.
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 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 its 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. If our initial shareholders purchase any additional ordinary shares in the aftermarket or in privately negotiated transactions,
this would increase its influence over these actions. Accordingly, our initial shareholders will exert significant influence over actions
requiring a shareholder vote at least until the completion of our initial business combination.
We
may not have sufficient funds to satisfy indemnification claims of our officers and directors.
We
have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have
agreed to waive any right, title, interest or claim of any kind in or to any monies in the Trust Account and to not seek recourse against
the Trust Account for any reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied by us only if (i)
we have sufficient funds outside of the Trust Account or (ii) we consummate an initial business combination. Our obligation to indemnify
our officers and directors may discourage shareholders from bringing a lawsuit against our officers and directors for breach of their
fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and
directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s
investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors
pursuant to these indemnification provisions.
Any
negative developments involving our management, directors and persons or companies with which they are currently or have been affiliated,
including civil disputes, litigation, government or other investigations or other actual or alleged misconduct, unrelated to our business
affairs could materially impact our ability to consummate an initial business combination.
Our
members of our management team, our directors, and persons or companies with which they are affiliated have been, and in the future will
continue to be, involved in a wide variety of business and other activities. As a result of such involvement, we may be exposed to the
risk of negative developments relating to members of our management, directors and persons or companies with which they are affiliated,
including civil disputes, litigation, governmental or other investigations or other actual or alleged misconduct relating to their affairs
unrelated to our company. Any such development, including any negative publicity related thereto, may be detrimental to our reputation,
negatively affect our ability to identify and complete an initial business combination in a material manner and may have an adverse effect
on the price of our securities.
RISKS
RELATING TO OUR SECURITIES
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 $10.30 per share.
The
proceeds held in the Trust Account will be 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 memorandum and 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, $206,000 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 $10.30 per share.
Nasdaq
may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities
and subject us to additional trading restrictions.
We
have our units listed on Nasdaq. 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. Generally, we must maintain a minimum amount in shareholders’
equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 public holders). Additionally, in connection
with our initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements,
which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities
on Nasdaq. For instance, our share price would generally be required to be at least $4.00 per share, our shareholders’ equity would
generally be required to be at least $5.0 million and we would be required to have a minimum of 300 round lot holders (with at least
50% of such round lot holders holding securities with a market value of at least $2,500) of our securities. We cannot assure you that
we will be able to meet those initial listing requirements at that time. If Nasdaq delists our securities from trading on its exchange
and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter
market. If this were to occur, we could face significant material adverse consequences, including:
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liquidity for our securities; |
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determination that our Class A ordinary shares are a “penny stock” which will require brokers trading in our Class A
ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading
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limited amount of news and analyst coverage; and |
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decreased ability to issue additional securities or obtain additional financing in the future. |
The
National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the
sale of certain securities, which are referred to as “covered securities.” Because we expect that our units and eventually
our Class A ordinary shares and public warrants will be listed on Nasdaq, our units, Class A ordinary shares and public warrants will
be covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the
states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states
can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to
prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities
regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of
securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not be covered
securities and we would be subject to regulation in each state in which we offer our securities, including in connection with our 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 seeking redemption rights with respect
to more than an aggregate of 15% of the shares sold in the IPO, which we refer to as the “Excess Shares.” 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. As a
result, you would 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.
We
may issue additional Class A ordinary 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 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. Any such issuances would dilute the interest
of our shareholders and likely present other risks.
Our
amended and restated memorandum and articles of association authorize the issuance of up to 180,000,000 Class A ordinary shares, par
value $0.0001 per share, 20,000,000 Class B ordinary shares, par value $0.0001 per share and 1,000,000 undesignated preference shares,
par value $0.0001 per share. Since the IPO, there are 143,333,333 and 15,000,000 authorized but unissued Class A and Class B ordinary
shares available, respectively, for issuance, which amount takes into account shares reserved for issuance upon exercise of outstanding
warrants but not upon conversion of the 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. Since the IPO, there is no preference shares issued and outstanding.
We
may issue a substantial number of additional ordinary shares, and may issue preference shares, 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. However, 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 or preference shares:
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subordinate the rights of holders of ordinary shares if preference shares are issued with rights senior to those afforded our ordinary
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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
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adversely affect prevailing market prices for our units, ordinary shares and/or public warrants. |
We
are not registering the Class A ordinary shares issuable upon exercise of the warrants under any state securities laws at this time,
and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able
to exercise its warrants except on a cashless basis and potentially causing such warrants to expire worthless.
We
are not registering the Class A ordinary shares issuable upon exercise of the warrants under any state securities laws at this time.
However, under the terms of the warrant agreement, we have agreed that as soon as practicable, but in no event later than 15 business
days after the closing of our initial business combination, we will use our best efforts to file, and within 60 business days following
our initial business combination to have declared effective, a post-effective amendment to the registration statement for the IPO or
a new registration statement covering such shares and maintain a current prospectus relating to the Class A ordinary shares issuable
upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant agreement. We cannot
assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information
set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not
current or correct or the SEC issues a stop order. However, no warrant will be exercisable for cash or on a cashless basis, and we will
not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise
is registered or qualified under the securities laws of the state of the exercising holder, or an exemption is available. Notwithstanding
the foregoing, if a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective
within a specified period following the consummation of our initial business combination, warrant holders may, until such time as there
is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement,
exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such
exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants
on a cashless basis. We will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption
is not available. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange
for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities
laws and no exemption is available. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or
exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant
may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid
the full unit purchase price solely for the Class A ordinary shares included in the units. If and when the public warrants become redeemable
by us, we may not exercise our redemption right if the issuance of shares upon exercise of the warrants is not exempt from registration
or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification. We will use our
best efforts to register or qualify such shares under the blue sky laws of the state of residence in those states in which the warrants
were offered by us in the IPO.
The
grant of registration rights to our initial shareholders and holders of our private placement warrants may make it more difficult to
complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our Class
A ordinary shares.
Pursuant
to an agreement to be entered into concurrently with the issuance and sale of the securities in the IPO, our initial shareholders and
their permitted transferees can demand that we register their founder shares, after those shares convert to our Class A ordinary shares
at the time of our initial business combination. In addition, holders of our private placement warrants and their permitted transferees
can demand that we register the private placement warrants and the Class A ordinary shares issuable upon exercise of the private placement
warrants, and holders of warrants that may be issued upon conversion of working capital loans, may demand that we register such warrants
or the Class A ordinary shares issuable upon exercise of such warrants. We will bear the cost of registering these securities. The registration
and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market
price of our Class A ordinary shares. In addition, the existence of the registration rights may make our initial business combination
more costly or difficult to conclude. This is because the shareholders of the target business may increase the equity stake they seek
in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A ordinary shares
that is expected when the ordinary shares owned by our initial shareholders, holders of our private placement warrants or holders of
our working capital loans or their respective permitted transferees are registered.
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 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.
If
we seek shareholder approval of our initial business combination, our initial shareholders, officers and directors have agreed to vote
in favor of such initial business combination, regardless of how our public shareholders vote.
Unlike
other blank check companies in which the initial shareholders agree to vote their founder shares in accordance with the majority of the
votes cast by the public shareholders in connection with an initial business combination, our initial shareholders, officers and directors
have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote any
founder shares held by them, as well as any public shares purchased during or after the IPO, in favor of our initial business combination.
We expect that our initial shareholders and their permitted transferees will own at least 20% of our issued and outstanding ordinary
shares at the time of any such shareholder vote. As a result, in addition to our initial shareholders’ founder shares, we would
need only 7,500,001, or 37.5%, of the 20,000,000 public shares sold in the IPO to be voted in favor of a transaction (assuming all outstanding
shares are voted) in order to have our initial business combination approved. Accordingly, if we seek shareholder approval of our initial
business combination, it is more likely that the necessary shareholder approval will be received than would be the case if such persons
agreed to vote their founder shares in accordance with the majority of the votes cast by our public shareholders.
We
have the right to extend the term we have to consummate our initial business combination to up to 21 months following the effectiveness
of the IPO without providing our shareholders a corresponding vote or redemption right.
We
will initially have until 15 months following the effectiveness of the IPO to consummate an initial business combination. However, if
we anticipate that we may not be able to consummate our initial business combination within 15 months, we may, but are not obligated
to, extend the period of time to consummate a business combination by two additional three-month periods each (for a total of up to 21
months following the effectiveness of the IPO to consummate a business combination). Our public shareholders will not be entitled to
vote on, or redeem their shares in connection with, any such extension. This feature is different from some other special purpose acquisition
companies, in which any extension of the company’s period to consummate an initial business combination would require a vote of
the company’s shareholders and in connection with such vote shareholders would have the right to redeem their public shares.
Pursuant
to the terms of our amended and restated memorandum and articles of association and the trust agreement to be entered into between us
and Continental Stock Transfer & Trust Company, in order to extend the time available for us to consummate our initial business combination,
our sponsor or its affiliates or designees, upon five business days’ advance notice prior to each deadline, must deposit into the
Trust Account an additional $0.10 per ordinary share then outstanding in each case, $2,000,000, on or prior to the date of such deadline.
In connection with each such additional deposit, our sponsor or its affiliates or designees will receive an additional 1,333,334 private
placement warrants, with the same terms as the original private placement warrants.
The
exercise price for the public warrants is higher than in many similar blank check company offerings in the past, and, accordingly, the
public warrants are more likely to expire worthless.
The
exercise price of the public warrants is higher than is typical in many similar blank check companies in the past. Historically, the
exercise price of a warrant was generally a fraction of the purchase price of the units in the initial public offering. The exercise
price for our public warrants is $11.50 per share, subject to adjustment as provided herein. As a result, the warrants are less likely
to ever be in the money and more likely to expire worthless.
A
provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.
If:
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(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 share; |
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(ii) |
the
aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available
for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions),
and |
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(iii) |
the
Market Value is below $9.20 per share, |
then
the exercise price of the public 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.
Because
each unit contains one-half of one redeemable public warrant and only a whole public warrant may be exercised, the units may be worth
less than units of other blank check companies.
Each
unit contains one-half of one redeemable public warrant. No fractional public warrants will be issued upon separation of the units and
only whole public warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade
a whole warrant. This is different from other offerings by special purpose acquisition companies whose units include one ordinary share
(or one share of common stock) and one warrant to purchase one full share. We have established the components of the units in this way
in order to reduce the dilutive effect of the public warrants upon completion of an initial business combination since the public warrants
will be exercisable in the aggregate for one-half of the number of shares compared to units that each contain a warrant to purchase one
full share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may
cause our units to be worth less than if they included a warrant to purchase one whole share.
Our
warrant agreement will designate the courts of the State of New York or the United States District Court for the Southern District of
New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants,
which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.
Our
warrant agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating
in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New
York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction,
which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive
jurisdiction and that such courts represent an inconvenient forum.
Notwithstanding
the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by
the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive
forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and
to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope of
the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District
Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall
be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection
with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service
of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign
action as agent for such warrant holder.
This
choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for
disputes with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement
inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs
associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition
and results of operations and result in a diversion of the time and resources of our management team.
We
may amend the terms of the public warrants in a manner that may be adverse to holders of public warrants with the approval by the holders
of at least 50% of the then outstanding public warrants.
Our
public 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 public warrants may be amended without the consent of
any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the
then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants.
Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding
public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least
50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase
the exercise price of the public warrants, shorten the exercise period or decrease the number of ordinary shares purchasable upon exercise
of a warrant.
The
public warrants may become exercisable and redeemable for a security other than the Class A ordinary shares, and you will not have any
information regarding such other security at this time.
In
certain situations, including if we are not the surviving entity in our initial business combination, the public warrants may become
exercisable for a security other than the Class A ordinary shares. As a result, if the surviving company redeems your public warrants
for securities pursuant to the warrant agreement, you may receive a security in a company of which you do not have information at this
time. Pursuant to the warrant agreement, the surviving company will be required to use commercially reasonable efforts to register the
issuance of the security underlying the public warrants within twenty business days of the closing of an initial business combination.
We
may redeem your unexpired public 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 public warrants at any time after they become exercisable and prior to their expiration, at a
price of $0.01 per public 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) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice
of redemption to the public warrant holders. If and when the public warrants become redeemable by us, we may not exercise our redemption
right if the issuance of shares upon exercise of the public warrants is not exempt from registration or qualification under applicable
state blue sky laws or we are unable to effect such registration or qualification. We will use our best efforts to register or qualify
such shares under the blue sky laws of the state of residence in those states in which the public warrants were offered by us in the
IPO. Redemption of the outstanding public warrants could force you (i) to exercise your public warrants and pay the exercise price therefor
at a time when it may be disadvantageous for you to do so, (ii) to sell your public warrants at the then-current market price when you
might otherwise wish to hold your public warrants or (iii) to accept the nominal redemption price which, at the time the outstanding
public warrants are called for redemption, is likely to be substantially less than the market value of your public warrants. None of
the private placement warrants will be redeemable by us.
Our
management’s ability to require holders of our public warrants to exercise such warrants on a cashless basis will cause holders
to receive fewer Class A ordinary shares upon their exercise of the public warrants than they would have received had they been able
to exercise their warrants for cash.
If
we call our public warrants for redemption after the redemption criteria described elsewhere in this report have been satisfied, our
management will have the option to require any holder that wishes to exercise his or her public warrants to do so on a “cashless
basis.” If our management chooses to require holders to exercise their public warrants on a cashless basis, the number of Class
A ordinary shares received by a holder upon exercise will be fewer than it would have been had such holder exercised his or her warrant
for cash. This will have the effect of reducing the potential “upside” of the holder’s investment in our company.
Our
warrants and founder 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
have issued public warrants to purchase 10,000,000 of our Class A ordinary shares, at a price of $11.50 per share, as part of the units
offered by this report and, simultaneously with the closing of the IPO, we have issued in a private placement an aggregate of 6,666,667
private placement warrants private placement warrants, each exercisable to purchase one Class A ordinary share at a price of $11.50 per
share. Prior to the IPO, our initial shareholders own an aggregate of 5,750,000 founder shares. The founder shares are convertible into
Class A ordinary shares on a one-for-one basis, subject to adjustment as set forth herein and in our amended and restated memorandum
and articles of association. In addition, if our initial shareholders 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 placement warrants. To the extent we issue Class A 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 founder shares may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business.
The
private placement warrants are identical to the public warrants sold as part of the units in the IPO except that, (i) they will not be
redeemable by us, (ii) they (including the Class A ordinary shares issuable upon exercise of these warrants) may not, subject to certain
limited exceptions, be transferred, assigned or sold by the sponsor until 30 days after the completion of our initial business combination,
(iii) they may be exercised by the holders on a cashless basis and (iv) the holders thereof (including with respect to ordinary shares
issuable upon exercise of such warrants) are entitled to registration rights.
The
determination of the offering price of our units and the size of the IPO is more arbitrary than the pricing of securities and size of
an offering of an operating company in a particular industry. You may have less assurance, therefore, that the offering price of our
units properly reflects the value of such units than you would have in a typical offering of an operating company.
Prior
to the IPO there was no public market for any of our securities. The public offering price of the units and the terms of the public warrants
were negotiated between us and the underwriters. In determining the size of the IPO, management held customary organizational meetings
with representatives of the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets, generally,
and the amount the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the size of the
IPO, prices and terms of the units, including the Class A ordinary shares and public warrants underlying the units, include:
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the
history and prospects of companies whose principal business is the acquisition of other companies; |
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prior
offerings of those companies; |
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our prospects for acquiring an operating
business at attractive values; |
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a
review of debt to equity ratios in leveraged transactions; |
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our capital structure; |
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an
assessment of our management and their experience in identifying operating companies; |
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general
conditions of the securities markets at the time of the IPO; and |
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other
factors as were deemed relevant. |
Although
these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities of an operating
company in a particular industry since we have no historical operations or financial results.
If
we are unable to consummate our initial business combination within 15 months (or up to 18 months or 21 months, as applicable) of the
closing of the IPO, our public shareholders may be forced to wait beyond such 15 months (or 18 months or 21 months, as applicable) before
redemption from our Trust Account.
If
we are unable to consummate our initial business combination within 15 months (or up to 18 months or 21 months, as applicable) from the
closing of the IPO, 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 wind up, liquidate the Trust Account and distribute such amount therein, pro rata, to our public shareholders,
as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies
Act. In that case, investors may be forced to wait beyond the initial 15 months (or up to 18 months or 21 months, as applicable) before
the redemption proceeds of our Trust Account become available to them and they receive the return of their pro rata portion of the proceeds
from our Trust Account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless
we consummate our initial business combination prior thereto and only then in cases where investors have sought to redeem their 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.
GENERAL
RISK FACTORS
Past
performance by our management team and their respective affiliates may not be indicative of future performance of an investment in us.
Information
regarding performance by, or businesses associated with, our management team and their affiliates is presented for informational purposes
only. Past performance by our management team, including their affiliates’ past performance, 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 their 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 have been involved in businesses and deals that were unsuccessful. Our officers and directors have not had management
experience with blank check companies or special purpose acquisition companies in the past.
Cyber
incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.
We
depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of
third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure,
or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary
information and sensitive or confidential data. As an early stage company without significant investments in data security protection,
we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against, or
to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of
them, could have adverse consequences on our business and lead to financial loss.
We
may reincorporate in another jurisdiction in connection with our initial business combination and such reincorporation may result in
taxes imposed on shareholders.
We
may, in connection with our initial business combination and subject to requisite shareholder approval under the Companies Act, reincorporate
in the jurisdiction in which the target company or business is located. The transaction may require a shareholder to recognize taxable
income in the jurisdiction in which the shareholder 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 to pay such taxes. Shareholders may be subject to withholding
taxes or other taxes with respect to their ownership of us after the reincorporation.
Certain
agreements related to the IPO may be amended without shareholder approval.
Certain
agreements, including the underwriting agreement relating to the IPO, the investment management trust agreement between us and Continental
Stock Transfer & Trust Company, the letter agreement among us and our initial shareholders, officers, directors and director nominees,
and the registration rights agreement among us and our initial shareholders, 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
the IPO contains 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 the deferred
underwriting commissions and taxes payable on the income earned on the Trust Account) so long as we obtain and maintain a listing for
our securities on 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.
We
may be a passive foreign investment company, or “PFIC,” which could result in adverse U.S. federal income tax consequences
to U.S. investors.
If
we are a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of our ordinary shares
or warrants, the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting
requirements. Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception.
Depending on the particular circumstances the application of the start-up exception may be subject to uncertainty, and there cannot be
any assurance that we will qualify for the start-up exception. Accordingly, there can be no assurances with respect to our status as
a PFIC for our current taxable year or any subsequent taxable year. Our actual PFIC status for any taxable year, however, will not be
determinable until after the end of such taxable year. Moreover, if we determine we are a PFIC for any taxable year, 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. Holders to consult their own tax advisors regarding the possible application of the PFIC rules
to holders of our ordinary shares and warrants.
We
are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure
requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more
difficult to compare our performance with other public companies.
We
are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage
of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth
companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and
exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden
parachute payments not previously approved. As a result, our shareholders may not have access to certain information they may deem important.
We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including
if the market value of our ordinary shares held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case
we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities
less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance
on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading
market for our securities and the trading prices of our securities may be more volatile.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such
extended transition period which means that when a standard is issued or revised and it has different application dates for public or
private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new
or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth
company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of
the potential differences in accountant standards used.
If
we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements
and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If
we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions
on the nature of our investments; and |
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restrictions
on the issuance of securities; |
each
of which may make it difficult for us to complete our initial business combination.
In
addition, we may have imposed upon us burdensome requirements, including:
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registration
as an investment company; |
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adoption
of a specific form of corporate structure; and |
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reporting,
record keeping, voting, proxy and disclosure requirements and other rules and regulations. |
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 $10.30 per share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants
will expire worthless.
If
we are deemed to be an investment company for purposes of the Investment Company Act, we may be forced to abandon our efforts to complete
an initial business combination and instead be required to liquidate the Company. To mitigate the risk of that result, on or prior to
the 24-month anniversary of the effective date of the registration statement relating to our IPO, we may instruct Continental Stock Transfer
& Trust Company to liquidate the securities held in the trust account and instead hold all funds in the trust account in cash. As
a result, following such change, we will likely receive minimal, if any, interest, on the funds held in the trust account, which would
reduce the dollar amount that our public shareholders would have otherwise received upon any redemption or liquidation of the Company
if the assets in the trust account had remained in U.S. government securities or money market funds.
On
March 30, 2022, the SEC issued proposed rules (the “SPAC Rule Proposals”), relating, among other things, to circumstances
in which SPACs such as us could potentially be subject to the Investment Company Act and the regulations thereunder. The SPAC Rule Proposals
would provide a safe harbor for such companies from the definition of “investment company” under Section 3(a)(1)(A) of the
Investment Company Act, provided that a SPAC satisfies certain criteria. To comply with the duration limitation of the proposed safe
harbor, a SPAC would have a limited time period to announce and complete a de-SPAC transaction. Specifically, to comply with the safe
harbor, the SPAC Rule Proposals would require a company to file a report on Form 8-K announcing that it has entered into an agreement
with a target company for an initial business combination no later than 18 months after the effective date of the registration statement
for its initial public offering. The company would then be required to complete its initial business combination no later than 24 months
after the effective date of the registration statement for its initial public offering. We understand that the SEC has recently been
taking informal positions regarding the Investment Company Act consistent with the SPAC Rule Proposals.
There
is currently uncertainty concerning the applicability of the Investment Company Act to a SPAC, including a company like ours that does
not complete its initial business combination within the proposed time frame set forth in the proposed safe harbor rule. As indicated
above, we completed our IPO in March 2022 and have operated as a blank check company searching for a target business with which to consummate
an initial business combination since such time (or approximately eight months after the effective date of our IPO, as of the date of
this Quarterly Report). If we were deemed to be an investment company for purposes of the Investment Company Act, we might be forced
to abandon our efforts to complete an initial business combination and instead be required to liquidate the Company. If we are required
to liquidate the Company, our investors would not be able to realize the benefits of owning shares in a successor operating business,
including the potential appreciation in the value of our shares and warrants following such a transaction, and our warrants would expire
worthless.
The
funds in the trust account have, since our IPO, been held only in U.S. government treasury obligations with a maturity of 185 days or
less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7
under the Investment Company Act. As of December 31, 2022, amounts held in trust account included approximately $1,349,448 of accrued
interest. To mitigate the risk of us being deemed to have been operating as an unregistered investment company under the Investment Company
Act, we may, on or prior to the 24-month anniversary of the effective date of the registration statement relating to our IPO, or March
3, 2024, if the duration of our company is extended from the current deadline in our organizational documents of 15 months, instruct
Continental Stock Transfer & Trust Company, the trustee with respect to the trust account, to liquidate the U.S. government treasury
obligations or money market funds held in the trust account and thereafter to hold all funds in the trust account in cash (i.e., in one
or more bank accounts) until the earlier of the consummation of a business combination or our liquidation. Following such liquidation
of the assets in our trust account, we will likely receive minimal interest, if any, on the funds held in the trust account, which would
reduce the dollar amount our public shareholders would have otherwise received upon any redemption or liquidation of the Company if the
assets in the trust account had remained in U.S. government securities or money market funds. This means that the amount available for
redemption will not increase in the future.
In
addition, even prior to the 24-month anniversary of the effective date of the registration statement relating to our IPO, we may be deemed
to be an investment company. The longer that the funds in the trust account are held in short-term U.S. government securities or in money
market funds invested exclusively in such securities, even prior to the 24-month anniversary, there is a greater risk that we may be
considered an unregistered investment company, in which case we may be required to liquidate. Accordingly, we may determine, in our discretion,
to liquidate the securities held in the trust account at any time, even prior to the 24-month anniversary, and instead hold all funds
in the trust account in cash, which would further reduce the dollar amount our public shareholders would receive upon any redemption
or our liquidation.
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. 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 Walkers (Hong Kong), 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.
We
may seek acquisition opportunities in foreign countries that are subject to political, economic, and other uncertainties.
We
may seek acquisitions opportunities that have operations outside the United States. As a result, we could face political and economic
risks and other uncertainties with respect these potential international operations. These risks may include the following, among other
things:
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loss
of revenue, property, and equipment or delays in operations as a result of hazards such as expropriation, war, piracy, acts of terrorism,
insurrection, civil unrest, and other political risks, including tension and confrontations among political parties; |
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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; |
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increases
in taxes and governmental royalties; |
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unilateral
renegotiation of contracts by governmental entities; |
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redefinition
of international boundaries or boundary disputes; |
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difficulties
enforcing our rights against a governmental agency because of the doctrine of sovereign immunity and foreign sovereignty over international
operations; |
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difficulties
enforcing our rights against a governmental agency in the absence of an appropriate and adequate dispute resolution mechanism to
address contractual disputes, such as international arbitration; |
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changes
in laws and policies governing operations of foreign-based companies; |
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foreign-exchange
restrictions; and |
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international
monetary fluctuations and changes in the relative value of the U.S. dollar as compared to the currencies of other countries in which
we conduct business. |
Outbreaks
of civil and political unrest and acts of terrorism have occurred in countries in Europe, Africa, South America, and the Middle East,
including countries close to or where we may seek an acquisition. Continued or escalated civil and political unrest and acts of terrorism
in the countries in which we may operate could result in our curtailing operations or delays in project completions. In the event that
countries in which we may operate experience civil or political unrest or acts of terrorism, especially in events where such unrest leads
to an unseating of the established government, our operations could be materially impaired. Our potential international operations may
also be adversely affected, directly or indirectly, by laws, policies, and regulations of the United States affecting foreign trade and
taxation, including U.S. trade sanctions. Realization of any of the factors listed above could materially and adversely affect our financial
condition, results of operations, or cash flows.
After
our initial business combination, it is possible that a majority of our directors and officers will live outside the United States and
all of our assets will be located outside the United States; therefore investors may not be able to enforce federal securities laws or
their other legal rights.
It
is possible that after our initial business combination, a majority of our directors and officers will reside outside of the United States
and all of our assets will be located outside of the United States. As a result, it may be difficult, or in some cases not possible,
for investors in the United States to enforce their legal rights, to effect service of process upon all of our directors or officers
or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties on our directors and officers
under United States laws.
Corporate
governance standards in non-US countries may not be as strict or developed as in the United States and such weakness may hide issues
and operational practices that are detrimental to a target business.
General
corporate governance standards in non-US countries are weaker than those in the United States. This could result in unfavorable related
party transactions, over-leveraging, improper accounting, family company interconnectivity and poor management. Local laws often do not
go far enough to prevent improper business practices. Therefore, shareholders may not be treated impartially and equally as a result
of poor management practices, asset shifting, conglomerate structures that result in preferential treatment to some parts of the overall
company, and cronyism. The lack of transparency and ambiguity in the regulatory process also may result in inadequate credit evaluation
and weakness that may precipitate or encourage financial crisis. In our evaluation of a business combination we will have to evaluate
the corporate governance of a target and the business environment, and in accordance with United States laws for reporting companies
take steps to implement practices that will cause compliance with all applicable rules and accounting practices. Notwithstanding these
intended efforts, there may be endemic practices and local laws that could add risk to an investment we ultimately make and that result
in an adverse effect on our operations and financial results.
If
the government of the country in which we effect our initial business combination finds that the agreements we entered into to acquire
control of a target business through contractual arrangements with one or more operating businesses do not comply with local governmental
restrictions on foreign investment, or if these regulations or the interpretation of existing regulations change in the future, we could
be subject to significant penalties or be forced to relinquish our interests in those operations.
Some
countries in Asia currently prohibit and/or restrict foreign ownership in certain “important industries,” including technology,
entertainment and others. There are uncertainties under certain regulations whether obtaining a majority interest through contractual
arrangements will comply with regulations prohibiting or restricting foreign ownership in certain industries. In addition, there can
be restrictions on the foreign ownership of businesses that are determined from time to time to be in “important industries”
that may affect the national economic security or those having “famous brand names” or “well-established brand names.”
If
we or any of our potential future target businesses are found to be in violation of any existing or future local laws or regulations
(for example, if we are deemed to be holding equity interests in certain of our affiliated entities in which direct foreign ownership
is prohibited), the relevant regulatory authorities might have the discretion to:
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revoke
the business and operating licenses of the potential future target business; |
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confiscate
relevant income and impose fines and other penalties; |
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discontinue
or restrict the operations of the potential future target business; |
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require
us or the potential future target business to restructure the relevant ownership structure or operations; |
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restrict
or prohibit our use of the proceeds of the IPO to finance our businesses and operations in the relevant jurisdiction; or |
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impose
conditions or requirements with which we or the potential future target business may not be able to comply. |
Many
of the economies in Asia are experiencing substantial inflationary pressures which may prompt the governments to take action to control
the growth of the economy and inflation that could lead to a significant decrease in our profitability following our initial business
combination.
While
many of the economies in Asia have experienced rapid growth over the last two decades, they have also experienced inflationary pressures.
As governments take steps to address inflationary pressures, there may be significant changes in the availability of bank credits, interest
rates, limitations on loans, restrictions on currency conversions and foreign investment. There also may be imposition of price controls.
If prices for the products of our ultimate target business rise at a rate that is insufficient to compensate for the rise in the costs
of supplies, it may have an adverse effect on our profitability. If these or other similar restrictions are imposed by a government to
influence the economy, it may lead to a slowing of economic growth. Because we are not limited to any specific industry, the ultimate
industry that we operate in may be affected more severely by such a slowing of economic growth.
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 team could resign from their positions as officers of our 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.
Our
current officers may not remain in their positions following our business combination. We may have a limited ability to assess the management
of a prospective target business and, as a result, may complete our initial business combination with a target business whose management
may not have the skills, qualifications or abilities to manage a public company, which could, in turn, negatively impact the value of
our shareholders’ investment in us.
When
evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the
target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target business’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications
or abilities we suspected. Should the target business’s management not possess the skills, qualifications or abilities necessary
to manage a public company, the operations and profitability of the post-combination business may be negatively impacted.
The
officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The loss of a 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.
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. We will not pursue or consummate our initial business combination with any entity with its principal business operations
in China, Hong Kong or Macau. Economic growth could be uneven, both geographically and among various sectors of the economy and such
growth may not be sustained in the future. If in the future such country’s economy experiences a downturn or grows at a slower
rate than expected, there may be less demand for spending in certain industries. A decrease in demand for spending in certain industries
could materially and adversely affect our ability to find an attractive target business with which to consummate our initial business
combination and if we effect our initial business combination, the ability of that target business to become profitable.
Exchange
rate fluctuations and currency policies may cause a target business’ ability to succeed in the international markets to be diminished.
In
the event we acquire a non-U.S. target, all revenues and income would likely be received in a foreign currency, and the dollar equivalent
of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency. The value
of the currencies in our target regions fluctuate and are affected by, among other things, changes in political and economic conditions.
Any change in the relative value of such currency against our reporting currency may affect the attractiveness of any target business
or, following consummation of our initial business combination, our financial condition and results of operations. Additionally, if a
currency appreciates in value against the dollar prior to the consummation of our initial business combination, the cost of a target
business as measured in dollars will increase, which may make it less likely that we are able to consummate such transaction.
Changes
in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results
of operations.
We
are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply
with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult,
time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and
those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to
comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business and results
of operations.
There
may be tax consequences to our business combinations that may adversely affect us.
While
we expect to undertake any merger, acquisition or other business combination transaction so as to minimize taxes to us, the target, the
acquired business and/or assets, and the respective shareholders of our company and target, such business combination might not meet
the applicable statutory requirements of a tax-free reorganization in all applicable jurisdictions, or the parties might not obtain the
intended tax-free treatment upon a transfer of shares or assets or other business combination transaction. A non-qualifying reorganization
could result in the imposition of substantial taxes on us, the target, the acquired business and/or assets, and the respective shareholders
of our company and target.
We
may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices
Act could have a material adverse effect on our business.
We
are subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign
governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining
or retaining business. We will have operations, agreements with third parties and make sales in Asia, which may experience corruption.
Our proposed activities in Asia create the risk of unauthorized payments or offers of payments by one of the employees, consultants,
or sales agents of our Company, because these parties are not always subject to our control. It will be our policy to implement safeguards
to discourage these practices by our employees. Also, our existing safeguards and any future improvements may prove to be less than effective,
and the employees, consultants, or sales agents of our Company may engage in conduct for which we might be held responsible. Violations
of the FCPA may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect
our business, operating results and financial condition. In addition, the government may seek to hold our Company liable for successor
liability FCPA violations committed by companies in which we invest or that we acquire.
We
employ a mail forwarding service, which may delay or disrupt our ability to receive mail in a timely manner.
Mail
addressed to the Company and received at its registered office will be forwarded unopened to the forwarding address supplied by Company
to be dealt with. None of the Company, its directors, officers, advisors or service providers (including the organization which provides
registered office services in the Cayman Islands) will bear any responsibility for any delay howsoever caused in mail reaching the forwarding
address, which may impair your ability to communicate with us.