ITEM 1. BUSINESS
Overview
We are a blank check company
incorporated as a Cayman Islands exempted company on July 9, 2020 for the purpose of effecting a merger, share exchange, asset
acquisition, share purchase, reorganization or similar business combination with one or more businesses that we have not yet identified
(“Business Combination”). Although we are not limited to a particular industry or geographic region for purposes of
consummating a Business Combination, we intend to focus on businesses that have sound fundamentals but that have the opportunity for substantial
performance enhancement through a combination of sharpening of strategic focus, more disciplined capital allocation, capital structure
improvements, rationalization of cost structure, and enhanced management skillset. Our sponsor
is Bluescape Sponsor LLC, a Delaware limited liability company (the “Sponsor”).
The
registration statement for our Initial Public Offering was declared effective on October
27, 2020. On October 30, 2020, we consummated
our Initial Public Offering of 57,500,000 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 $575.0 million. Simultaneously with the closing of the Initial Public Offering,
we consummated the private placement (“Private Placement”) of 13,500,000 warrants (each,
a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of
$1.00 per Private Placement Warrant in a private placement to our Sponsor, Bluescape Sponsor LLC, and an investment fund managed by Zimmer
Partners LP (“Zimmer Entity”), generating gross proceeds of $13.5 million.
We granted the underwriter
a 45-day option to purchase up to an additional 8,625,000 Units at the Initial Public Offering price to cover over-allotments, if any. Subsequently,
on November 12, 2020, the Company consummated the closing of the sale of 3,250,000 additional units at a price of $10.00 per unit upon
receiving notice of the underwriters’ election to partially exercise their over-allotment option (the “Over-Allotment Option”),
generating additional gross proceeds of $32.5 million to the Company. Simultaneously with the exercise of the over-allotment option, the
Company consummated the private placement of an additional 650,000 warrants, at a purchase price of $1.00 per private placement warrant,
to Bluescape Sponsor LLC and the Zimmer Entity, generating gross proceeds of approximately $0.7 million. Incremental transaction costs
related to the exercise of the over-allotment amounted to approximately $1.8 million, consisting of $0.7 million in incremental cash underwriting
fees and $1.1 million of additional underwriting fees, which have been deferred until the completion of the Company’s Business Combination.
Upon
the closing of the Initial Public Offering and the Private Placement, $575.0 million ($10.00 per Unit) of the net proceeds of the
sale of the Units in the Initial Public Offering and the Private Placement were placed in a trust account (the “Trust Account”).
Upon closing of the underwriters’ Over-Allotment Option, an incremental $32.5 million of net proceeds were also placed in the trust
account resulting in $607.5 million of aggregate proceeds. The Trust Account is located in the United States at Citibank, N.A.,
with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. government securities, within the
meaning set forth in Section 2(a)(16) of 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 selected by us meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of
Rule 2a-7 of the Investment Company Act, as determined by us, until the earlier of: (i) the completion of a Business Combination
and (ii) the distribution of the Trust Account as described below. Our management has broad discretion with respect to the specific
application of the net proceeds of the Initial Public Offering and the sale of Private Placement Warrants, although substantially all
of the net proceeds are intended to be applied generally toward consummating a Business Combination.
We also entered into a forward
purchase agreement simultaneously with the closing of our Initial Public Offering with the Sponsor providing for the purchase of up to
3,000,000 forward purchase units, and with the Zimmer Entity providing for the purchase of up to 27,000,000 forward purchase units, at
a purchase price of $10.00 per unit, in private placements to occur concurrently with the closing of our initial Business Combination
collectively, the (“Forward Purchase Agreements”). Participation by the Forward Purchase Agreement providers is discretionary.
However, if requested by the Company, and approved by Zimmer Partners’ investment committee, the proceeds from the sale of forward
purchase securities may be used as part of the consideration to the sellers in the initial Business Combination, expenses in connection
with the initial Business Combination or for working capital in the post-transaction company.
If we are unable to complete
a Business Combination within 24 months from the closing of the Initial Public Offering, or October
27, 2022 (the “Combination Window”), we will:
(i) cease all operations except for the purpose of winding up, (ii) as promptly
as reasonably possible but no more than ten business days thereafter subject to lawfully available funds therefor, redeem the Public Shares,
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on
the funds held in the Trust Account and not previously released to the Company to pay the Company’s franchise and income taxes (less
up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will
completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of
the Company’s remaining shareholders and the Company’s board of directors, dissolve and liquidate, subject in each
case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable
law.
Business Strategy
Our business strategy is to
identify and complete our initial Business Combination with a company that can benefit from the managerial and operational experience
of our Sponsor and its members. We believe that the wide networks of our management team will deliver access to a broad spectrum of opportunities.
We will seek to capitalize
on the multiple decades of investment and business transformation experience of our team, led by Executive Chairperson and CEO, C. John
Wilder. Mr. Wilder is a well-known entrepreneur with extensive deal-making experience. He has spent his over 40+ year career building,
operating, and investing in businesses both in the private and public markets and has deep experience in the energy and industrial value
chains in the United States and globally. He has also managed a multi-billion dollar private investment platform from both an operating
and an investing perspective.
We intend to identify and complete
our initial Business Combination with a company that (i) complements the experiences and skills of our management team and (ii) can benefit
from our team’s operational and investment expertise. We will focus our efforts on opportunities we feel have a competitive advantage
and where we believe that we are best situated to enhance the value of the business after completion of the Business Combination. We intend
to employ a proactive, disciplined and highly selective acquisition process leveraging our management and board of directors’ extensive
proprietary network of operating partners, executives, investors and advisors. This network has been developed through demonstrated success
in both investing in and operating businesses including:
• Transforming underperforming
companies into high performance businesses;
• Developing
and growing companies, both organically and through acquisitions and strategic transactions;
• Sourcing, structuring,
acquiring, and selling businesses;
• Accessing the capital
markets across various business cycles;
• Fostering relationships
with sellers, capital partners and target management teams; and
• Delivering above market
investment return over long periods.
We intend to employ a proactive,
disciplined, and highly selective acquisition process, and we believe Mr. Wilder’s extensive proprietary network of operating partners,
executives, investors, and advisors will provide numerous acquisition opportunities. Since the Initial Public Offering, the members of
our Sponsor and the members of our management team have been communicating with their networks of relationships to articulate the parameters
for our search for a target company as well as reviewing potential opportunities.
Acquisition Process
Our objective is to find and
execute an acquisition opportunity at an attractive valuation, enhance the business value through improvements, grow the company (both
organically and through strategic acquisitions), and ultimately create shareholder value. We believe our management team is well positioned
to identify and capture an attractive Business Combination opportunity. Our acquisition and sourcing process is outlined below:
• Leverage Broad and
Extensive Network
• Capitalize
on sponsor’s history of managing multi-billion dollar platforms
• Utilize
sponsor’s multi asset class institutional investing expertise
• Seek Out Bottom of
Cycle Investment Opportunities
• Employ fundamentals
driven/value oriented approach
• Source opportunities
from sponsor’s proprietary network
• Generate
attractive returns through unique transaction structuring
• Maximize Value Through
Business Improvements
• Operational/commercial
improvements
• Improved
execution of growth capital and asset repositioning
• Accelerate
portfolio repositioning
• Attract Quality Partners
• Underpinned
by permanent capital
• Values alignment
through sponsor’s active participation
• Long term
continuing equity interest
The aforementioned criteria
and process guidelines are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial Business Combination
may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management
may deem relevant. In the event that we decide to enter into our initial Business Combination with a target business that does not meet
the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder communications
related to our initial Business Combination.
In evaluating a prospective
target business, we expect to conduct an extensive due diligence review which may encompass, as applicable and among other things, meetings
with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities and a review
of financial and other information about the target and its industry. We will also utilize our management team’s operational and
capital planning experience.
We are not prohibited from
pursuing an initial Business Combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek
to complete our initial Business Combination with a company that is affiliated with our sponsor or any of our officers or directors, we,
or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent entity
that commonly renders valuation opinions that such initial Business Combination is fair to our company from a financial point of view.
We are not required to obtain such an opinion in any other context.
Each of our directors and officers
may, directly or indirectly, own founder shares and/or Private Placement Warrants and, accordingly, may have a conflict of interest in
determining whether a particular target business is an appropriate business with which to effectuate our Initial Business Combination.
Further, such directors and officers may have a conflict of interest with respect to evaluating a particular Business Combination if the
retention or resignation of any such directors and officers was included by a target business as a condition to any agreement with respect
to our Initial Business Combination.
In addition, certain of our
officers and directors presently have, and any of them in the future may have additional, fiduciary and contractual duties to other entities.
As a result, if any of our officers or directors becomes aware of a Business Combination opportunity which is suitable for an entity to
which he, she or it has then-current fiduciary or contractual obligations, then, subject to their fiduciary duties under Cayman Islands
law, he, she or it will need to honor such fiduciary or contractual obligations to present such Business Combination opportunity to such
entity, before we can pursue such opportunity. If these other entities decide to pursue any such opportunity, we may be precluded from
pursuing the same. However, we do not expect these duties to materially affect our ability to complete our initial Business Combination.
Our amended and restated memorandum and articles of association provide that we renounce our interest in any Business Combination opportunity
offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director
or officer of the company and it is an opportunity that we are able to complete on a reasonable basis.
Our sponsor, officers and directors
may sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial Business
Combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target, particularly in the event
there is overlap among investment mandates. However, we do not currently expect that any such other blank check company would materially
affect our ability to complete our initial Business Combination. In addition, our sponsor, 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.
Initial Business Combination
So long as our securities are
then listed on the NYSE, our initial Business Combination must occur with one or more target businesses that together have an aggregate
fair market value of at least 80% of the net assets held in the trust account (excluding the deferred underwriting commissions and taxes
payable on the interest earned on the trust account) at the time of signing a definitive agreement in connection with our initial Business
Combination. 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 an independent valuation or appraisal firm with respect to the
satisfaction of such criteria. While we consider it unlikely that our board will not be able to make an independent determination of the
fair market value of a target business or businesses, it may be unable to do so if the board is less familiar or experienced with the
target company’s business, there is a significant amount of uncertainty as to the value of the company’s assets or prospects,
including if such company is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex
financial analysis or other specialized skills and the board determines that outside expertise would be helpful or necessary in conducting
such analysis. Since any opinion, if obtained, would merely state that the fair market value of the target business meets the 80% of net
assets threshold, unless such opinion includes material information regarding the valuation of a target business or the consideration
to be provided, it is not anticipated that copies of such opinion would be distributed to our shareholders. However, if required under
applicable law, any proxy statement that we deliver to shareholders and file with the SEC in connection with a proposed transaction will
include such opinion.
We anticipate structuring our
initial Business Combination so that the post-business combination company in which our public 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-business combination company owns or acquires less than 100% of such interests or assets of the target business in
order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such Business
Combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or
otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under
the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-business combination company owns or acquires
50% or more of the voting securities of the target, our 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.
For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding
ordinary shares, 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-business combination company, the
portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If
the Business Combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all
of the target businesses. In addition, we have agreed not to enter into a definitive agreement regarding an initial Business Combination
without the prior consent of our sponsor. If our securities are not then listed on the NYSE for whatever reason, we would no longer be
required to meet the foregoing 80% of net asset test.
To the extent we effect our
initial Business Combination with a company or business that may be financially unstable or in its early stages of development or growth,
we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks
inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
The time required to select
and evaluate a target business and to structure and complete our initial Business Combination, and the costs associated with this process,
are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of
a prospective target business with which our initial Business Combination is not ultimately completed will result in our incurring losses
and will reduce the funds we can use to complete another Business Combination.
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 shares in the target business for our ordinary shares or for a combination of our ordinary 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 this offering, as well as general market conditions, which could delay or prevent
this offering from occurring or could have negative valuation consequences. 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.
We are an “emerging growth
company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified
by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable
to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply
with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory
vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find
our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities
may be more volatile.
In addition, Section 107
of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided
in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging
growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of our Initial Public
Offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be
a large accelerated filer, which means the market value of our Class A 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.
Financial Position
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 other than pursuing and reviewing potential opportunities for the initial Business Combination.
We intend to effectuate our initial Business Combination using cash from the proceeds of the Initial Public Offering and the Private Placement
and the Forward Purchase Agreements, our ordinary shares, debt or a combination of these as the consideration to be paid in our initial
Business Combination. We may seek to complete our initial Business Combination with a company or business that may be financially unstable
or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If
our initial Business Combination is paid for using equity or debt instruments, or not all of the funds released from the Trust Account
are used for payment of the consideration in connection with our Business Combination or used for redemptions of our Class A 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 the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing
our initial Business Combination, to fund the purchase of other companies or for working capital.
In addition to the Forward
Purchase Agreements, 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 our 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 expect
to complete such financing only simultaneously with the completion of our Business Combination. In the case of our 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 law, 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, other than the Forward Purchase Agreements, 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.
Selection of a Target Business and Structuring
of our Initial Business Combination
So long as our securities are
listed on the NYSE, our initial Business Combination must occur with one or more target businesses that together have an aggregate fair
market value of at least 80% of the net assets held in the trust account (excluding the deferred underwriting commissions and taxes payable
on the interest earned on the trust account) at the time of signing a definitive agreement in connection with our initial Business Combination.
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 an independent valuation or appraisal firm with respect to the satisfaction
of such criteria. While we consider it unlikely that our board will not be able to make an independent determination of the fair market
value of a target business or businesses, it may be unable to do so if the board is less familiar or experienced with the target company’s
business, there is a significant amount of uncertainty as to the value of the company’s assets or prospects, including if such company
is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex financial analysis or
other specialized skills and the board determines that outside expertise would be helpful or necessary in conducting such analysis. Since
any opinion, if obtained, would merely state that the fair market value of the target business meets the 80% of net assets threshold,
unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it
is not anticipated that copies of such opinion would be distributed to our shareholders. However, if required under applicable law, any
proxy statement that we deliver to shareholders and file with the SEC in connection with a proposed transaction will include such opinion.
We anticipate structuring
our initial Business Combination so that the post-business combination company in which our public 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-business combination company owns or acquires less than 100% of such interests or assets of
the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we
will only complete such Business Combination if the post-business combination company owns or acquires 50% or more of the
outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be
required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act.
Even if the post-business combination company owns or acquires 50% or more of the voting securities of the target, our 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. For example, we could pursue a transaction in which we issue a
substantial number of new shares in exchange for all of the outstanding ordinary shares, 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-business combination company, the portion of such
business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the Business
Combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the
target businesses. In addition, we have agreed not to enter into a definitive agreement regarding an initial Business Combination
without the prior consent of our sponsor. If our securities are not then listed on the NYSE for whatever reason, we would no longer
be required to meet the foregoing 80% of net asset test.
To the extent we effect our
initial Business Combination with a company or business that may be financially unstable or in its early stages of development or growth,
we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks
inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
The time required to select
and evaluate a target business and to structure and complete our initial Business Combination, and the costs associated with this process,
are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of
a prospective target business with which our initial Business Combination is not ultimately completed will result in our incurring losses
and will reduce the funds we can use to complete another Business Combination.
Sources of Target Businesses
We anticipate that target
business candidates will be brought to our attention from various unaffiliated sources, including investment market participants,
private equity groups, investment banking firms, consultants, accounting firms and large business enterprises. 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 some of
these sources will have read our prospectus and SEC filings 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 that they become aware of 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 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 finder’s fees 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 their respective affiliates paid by us any finder’s fee, consulting fee or other compensation 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). We have agreed to pay an affiliate of our sponsor a total of $10,000 per month for office space,
secretarial and administrative support and to reimburse our sponsor for any out-of-pocket expenses related to identifying,
investigating and completing an initial Business Combination. Some of our officers and directors may enter into employment or
consulting agreements with the post-business combination company following our initial Business Combination. The presence or absence
of any such fees or arrangements will not be used as a criterion in our selection process of an acquisition candidate.
We are not prohibited from
pursuing an initial Business Combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek
to complete our initial Business Combination with a company that is affiliated with our sponsor or any of our officers or directors, we,
or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent entity
that commonly renders valuation opinions that such initial Business Combination is fair to our company from a financial point of view.
We are not required to obtain such an opinion in any other context.
Each of our officers and directors
presently has, and any of them in the future may have, additional, fiduciary or contractual obligations to other entities, including entities
that are affiliates of our sponsor, pursuant to which such officer or director is or will be required to present a Business Combination
opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a Business Combination opportunity which
is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary
or contractual obligations to present such Business Combination opportunity to such entity, subject to their fiduciary duties under Cayman
Islands law.
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:
• 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
• 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. The determination as to whether any
of the members of our management team will remain with the combined company will be made at the time of our initial Business Combination.
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 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 our
initial Business Combination, we may seek to recruit additional managers to supplement the incumbent management of the target business.
We cannot assure that we will have the ability to recruit additional managers, or that 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 listing requirement, or we may decide to seek shareholder approval for business or other reasons.
Under the NYSE’s listing
rules, shareholder approval would typically be required for our initial Business Combination if, for example:
• We issue
ordinary shares that will be equal to or in excess of 20% of the number of our ordinary shares then-outstanding (other than in a public
offering);
• Any of our
directors, officers or substantial security holder (as defined by the NYSE 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 ordinary shares could result in
an increase in issued and outstanding ordinary shares or voting power of 1%or more (or 5% or more if the related party involved is classified
as such solely because such person is a substantial security holder); or
• The issuance or potential
issuance of ordinary shares will result in our undergoing a change of control.
The decision as to whether
we will seek shareholder approval of a proposed Business Combination in those instances in which shareholder approval is not required
by law will be made by us, solely in our discretion, and will be based on business and reasons, which include a variety of factors, including,
but not limited to:
• the timing
of the transaction, including in the event we determine shareholder approval would require additional time and there is either not enough
time to seek shareholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional
burdens on the company;
• the expected
cost of holding a shareholder vote;
• the risk
that the shareholders would fail to approve the proposed business combination;
• other time
and budget constraints of the company; and
• traditional
legal complexities of a proposed Business Combination that would be time-consuming and burdensome to present to shareholders.
Permitted Purchases and Other Transactions
with Respect to Our Securities
If we seek shareholder approval
of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination to the tender
offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase public shares or warrants in privately
negotiated transactions or in the open market either prior to or following the completion of our initial Business Combination. Additionally,
at any time at or prior to our initial Business Combination, subject to applicable securities laws (including with respect to material
nonpublic information), our sponsor, directors, executive officers, advisors or their affiliates may enter into transactions with investors
and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial Business Combination
or not redeem their public shares. However, they have no current commitments, plans or intentions to engage in such transactions and have
not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase public
shares or warrants in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when
they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation
M under the Exchange Act.
In the event that our sponsor,
directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have
already elected to exercise their redemption rights or submitted a proxy to vote against our initial Business Combination, such selling
shareholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial Business
Combination. 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 be required to comply with
such rules.
The purpose of any such
transaction could be to (i) vote in favor of the initial Business Combination and thereby increase the likelihood of obtaining
shareholder approval of the initial Business Combination, (ii) reduce the number of public warrants outstanding or vote such
warrants on any matters submitted to the warrant holders for approval in connection with our initial Business Combination or (iii)
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. Any such
purchases of our securities may result in the completion of our initial Business Combination that may not otherwise have been
possible.
In addition, if such purchases
are made, the public “float” of our Class A ordinary shares or public warrants may be reduced and the number of beneficial
holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities
on a national securities exchange.
Our sponsor, officers, directors
and/or their affiliates anticipate that they may identify the shareholders with whom our sponsor, officers, directors or their affiliates
may pursue privately negotiated transactions by either the shareholders contacting us directly or by our receipt of redemption requests
submitted by shareholders (in the case of Class A ordinary shares) following our mailing of tender offer or proxy materials in connection
with our initial Business Combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into a
private transaction, they would identify and contact only potential selling or redeeming shareholders who have expressed their election
to redeem their shares for a pro rata share of the trust account or vote against our initial Business Combination, whether or not such
shareholder has already submitted a proxy with respect to our initial Business Combination but only if such shares have not already been
voted at the general meeting related to our initial Business Combination.
Our sponsor, executive officers,
directors, advisors or their affiliates will select which shareholders to purchase shares from based on the negotiated price and number
of shares and any other factors that they may deem relevant, and will be restricted from purchasing shares if such purchases do not comply
with Regulation M under the Exchange Act and the other federal securities laws.
Our sponsor, officers, directors
and/or their affiliates are restricted from making purchases of shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of
the Exchange Act. Any such purchases are required to be reported by such person pursuant to Section 13 and Section 16 of the Exchange
Act to the extent such purchasers are subject to such reporting requirements.
Redemption Rights for Public Shareholders upon
Completion of our Initial Business Combination
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 will provide that a public shareholder, together
with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group”
(as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate
of 15% of the shares sold in our Initial Public Offering, which we refer to as “Excess Shares,” without our prior consent.
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 management
to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision,
a public shareholder holding more than an aggregate of 15% of the shares sold in our Initial Public Offering could threaten to exercise
its redemption rights if such holder’s shares are not purchased by us, our sponsor or our management 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 our Initial Public Offering without our prior consent, 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.
Limitations on Redemptions
Our amended and restated
memorandum and articles of association will provide 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 (so that we do not then become subject to the SEC’s “penny
stock” rules). However, 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.
Manner of Conducting Redemptions
We will provide our public
shareholders with the opportunity to redeem all 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 applicable law or stock exchange listing requirement or whether we were deemed to
be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval under SEC rules). Asset acquisitions
and 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 issued and outstanding ordinary shares or seek to amend our amended and restated
memorandum and articles of association would typically require shareholder approval. We currently intend to conduct redemptions in connection
with a shareholder vote unless shareholder approval is not required by applicable law or stock exchange listing requirement or we choose
to conduct redemptions pursuant to the tender offer rules of the SEC for business or other reasons. So long as we obtain and maintain
a listing for our securities on the NYSE, we are required to comply with the NYSE rules.
If we held a shareholder vote
to approve our initial Business Combination, we will, pursuant to our amended and restated memorandum and articles of association:
•
conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the
solicitation of proxies, and not pursuant to the tender offer rules; and
• file proxy
materials with the SEC.
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 we obtain the approval of an ordinary resolution under Cayman
Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the
company. In such case, our sponsor and each member of our management team have agreed to vote their founder shares and public shares
in favor of our initial Business Combination. As a result, in addition to our initial purchaser’s founder shares, we would
need 22,781,251, or 37.5% (assuming all issued and outstanding shares are voted), or 3,796,875, or 6.25% (assuming only the minimum
number of shares representing a quorum are voted), of the 60,750,000 public shares sold in our Initial Public Offering and
subsequent underwriters’ over-allotment option exercise to be voted in favor of an initial Business Combination in order to
have our initial Business Combination approved. Each public shareholder may elect to redeem their public shares irrespective of
whether they vote for or against the proposed transaction or vote at all. In addition, our sponsor, each member of our management
team, and our three independent directors that hold Founder Shares have entered into an agreement with us, pursuant to which they
have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with
(i) the completion of a Business Combination and (ii) a shareholder vote to approve an amendment to our amended and restated
memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our
Class A ordinary shares the right to have their shares redeemed in connection with our initial Business Combination or to redeem
100% of our public shares if we do not complete our initial Business Combination within 24 months from the closing of our Initial
Public Offering or (B) with respect to any other provision relating to the rights of holders of our
Class A ordinary shares.
If we conduct redemptions pursuant
to the tender offer rules of the SEC, we will, pursuant to our amended and restated memorandum and articles of association:
• conduct
the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and
• 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, if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate
any plan established in accordance with Rule 10b5-1 to purchase Class A ordinary shares in the open market, in order 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 the number of public shares we are permitted to redeem. If public shareholders
tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial Business Combination.
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 will provide that a public shareholder, together
with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group”
(as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate
of 15% of the shares sold in our Initial Public Offering, which we refer to as “Excess Shares,” without our prior consent.
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 management
to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision,
a public shareholder holding more than an aggregate of 15% of the shares sold in our Initial Public Offering could threaten to exercise
its redemption rights if such holder’s shares are not purchased by us, our sponsor or our management 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 our Initial Public Offering without our prior consent, 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.
Tendering Share Certificates in Connection
with a Tender Offer or Redemption Rights
Public shareholders seeking
to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” will be required
to either tender their certificates (if any) to our transfer agent prior to the date set forth in the proxy solicitation or tender offer
materials, as applicable, mailed to such holders, or to deliver their shares to the transfer agent electronically using The Depository
Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, in each case up to two business days
prior to the initially scheduled vote to approve the Business Combination. The proxy solicitation or tender offer materials, as applicable,
that we will furnish to holders of our public shares in connection with our initial Business Combination will indicate the applicable
delivery requirements, which will include the requirement that a beneficial holder must identify itself in order to validly redeem its
shares. Accordingly, a public shareholder would have from the time we send out our tender offer materials until the close of the tender
offer period, or up to two business days prior to the initially scheduled vote on the proposal to approve the Business Combination if
we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively
short period in which to exercise redemption rights, it is advisable for shareholders to use electronic delivery of their public shares.
There is a nominal cost associated
with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer
agent will typically charge the tendering broker a fee of approximately $80.00 and it would be up to the broker whether or not to pass
this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise
redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the
timing of when such delivery must be effectuated.
The foregoing is different
from the procedures used by many blank check companies. In order to perfect redemption rights in connection with their business combinations,
many blank check companies would distribute proxy materials for the shareholders’ vote on an initial Business Combination, and a
holder could simply vote against a proposed Business Combination and check a box on the proxy card indicating such holder was seeking
to exercise his or her redemption rights. After the Business Combination was approved, the company would contact such shareholder to arrange
for him or her to deliver his or her certificate to verify ownership. As a result, the shareholder then had an “option window”
after the completion of the Business Combination during which he or she could monitor the price of the company’s shares in the market.
If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his
or her shares to the company for cancellation. As a result, the redemption rights, to which shareholders were aware they needed to commit
before the general meeting, would become “option” rights surviving past the completion of the Business Combination until the
redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming
shareholder’s election to redeem is irrevocable once the Business Combination is approved.
Any request to redeem such
shares, once made, may be withdrawn at any time up to two business days prior to the initially scheduled vote on the proposal to approve
the Business Combination, unless otherwise agreed to by us. Furthermore, if a holder of a public share delivered its certificate in connection
with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such
holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds
to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of
our initial Business Combination.
If our initial Business Combination
is not approved or completed for any reason, then our public shareholders who elected to exercise their redemption rights would not be
entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates
delivered by public holders who elected to redeem their shares.
If our initial proposed Business
Combination is not completed, we may continue to try to complete a Business Combination with a different target until 24 months from the
closing of our Initial Public Offering.
Redemption of Public Shares and Liquidation If No Initial Business
Combination
Our
amended and restated memorandum and articles of association will provide that we will have only 24 months from the closing of our
Initial Public Offering to consummate an initial Business Combination. If we have not consummated
an initial Business Combination within 24 months from the closing of our Initial Public Offering,
we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten
business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit
in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income
taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares,
which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further
liquidation distributions, if any); 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 the case of clauses (ii) and (iii) 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 consummate an initial Business
Combination within 24 months from the closing of our Initial Public Offering. Our amended
and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the consummation of
our initial Business Combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly
as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
Our
sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their
rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to consummate an initial
Business Combination within 24 months from the closing of our Initial Public Offering (although
they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete
our initial business combination within the prescribed time frame).
Our
sponsor, executive officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment
to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to
provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial Business
Combination or to redeem 100% of our public shares if we do not complete our initial Business Combination
within 24 months from the closing of our Initial Public Offering or (B) with respect to any
other provision relating to the rights of holders of our Class A ordinary shares, unless we provide our public shareholders with the opportunity
to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount
then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to
us to pay our income taxes, if any, divided by the number of the then-outstanding public shares. However, we may not redeem our public
shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become 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, we would not proceed with the amendment or the related redemption
of our public shares at such time. This redemption right shall apply in the event of the approval of any such amendment, whether proposed
by our sponsor, any executive officer or director, or any other person.
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 outside the trust account plus up to $100,000 of funds from the trust account available to us to pay dissolution
expenses, although we cannot assure you that there will be sufficient funds for such purpose.
If
we were to expend all of the net proceeds of our Initial Public Offering 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 $10.00.
The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher
priority than the claims of our public shareholders. We cannot assure you that the actual per-share redemption amount received by
shareholders will not be less than $10.00. While we intend to pay such amounts, if any, we cannot assure you that we will have funds
sufficient to pay or provide for all creditors’ claims.
Although
we will seek to have all vendors, service providers, prospective target businesses and other entities with which we do business execute
agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit
of our public 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. Citigroup Global Markets Inc. and Barclays
Capital Inc. will not execute an agreement with us waiving such claims to the monies held in the trust account. 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. In order to protect the amounts held
in the trust account, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third-party for services
rendered or products sold to us (other than our independent registered public accounting firm), or a prospective target business with
which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i) $10.00
per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust
account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that
may be withdrawn to pay our tax obligations, provided that such liability will not apply to any claims by a third-party or prospective
target business that executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under
our indemnity of the underwriters of our Initial Public Offering against certain liabilities,
including liabilities under the Securities Act. 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. However, we have not asked our sponsor
to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy
its indemnity obligations and we believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure
you that our sponsor would be able to satisfy those obligations. None of our officers or directors 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 the lesser of (i) $10.00 per public share and (ii) the actual amount
per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share
due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay our income
tax obligations, 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 less than $10.00 per public 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, 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 our Initial Public Offering against
certain liabilities, including liabilities under the Securities Act. We have access to proceeds following our Initial Public
Offering and the sale of the private placement warrants with which to pay any such potential
claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than
approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and
liabilities is insufficient, shareholders who received funds from our trust account could be liable for claims made by creditors,
however such liability will not be greater than the amount of funds from our trust account received by any such
shareholder.
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
estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims
deplete the trust account, we cannot assure you we will be able to return $10.00 per public share 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 or insolvency laws as either
a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek
to recover some or all amounts received by our shareholders. Furthermore, our board of directors 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 (i) in the event of the redemption of our public shares
if we do not complete our initial Business Combination within 24 months from the closing of our Initial Public Offering, (ii) 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 holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial
Business Combination or to redeem 100% of our public shares if we do not complete our initial Business Combination within 24 months from
the closing of our Initial Public Offering or (B) with respect to any other provision relating to the rights of holders of our Class A
ordinary shares, or (iii) if they redeem their respective shares for cash upon the completion of the initial Business Combination. Public
shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (ii) in the preceding
sentence shall not be entitled to funds from the trust account upon the subsequent completion of an initial Business Combination or liquidation
if we have not consummated an initial Business Combination within 24 months from the closing of our Initial Public Offering, with respect
to such Class A ordinary shares so redeemed. 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. These provisions
of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum and articles
of association, may be amended with a shareholder vote.
Comparison
of Redemption or Purchase Prices in Connection with Our Initial Business Combination and If We Fail to Complete Our Initial Business Combination
The following
table compares the redemptions and other permitted purchases of public shares that may take place in connection with the completion of
our initial Business Combination and if we have not consummated an initial Business Combination within 24 months from the closing of our
Initial Public Offering:
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Redemptions in Connection with Our Initial Business Combination
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Other Permitted Purchases of Public Shares by Our Affiliates
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Redemptions if We Fail to Complete an Initial Business Combination
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Calculation of redemption price
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Redemptions at the time of our initial Business Combination may be made pursuant to a tender offer or in connection with a shareholder vote. The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a shareholder vote. In either case, our public shareholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial Business Combination (which is initially anticipated to be $10.00 per public share), including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitation that no redemptions will take place if all of the redemptions would cause our net tangible assets to be less than $5,000,001 and any limitations (including, but not limited, to cash requirements) agreed to in connection with the negotiation of terms of a proposed Business Combination.
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If we seek shareholder approval of our initial Business Combination, our sponsor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following completion of our initial Business Combination. There is no limit to the prices that our sponsor, directors, officers, advisors or their affiliates may pay in these transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. 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 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 be required to comply with such rules.
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If we have not consummated an initial Business Combination within 24 months of the closing of our Initial Public Offering, we will redeem all public shares at a per-share price, payable in cash, equal to the aggregate amount, then on deposit in the trust account (which is initially anticipated to be $10.00 per public share), including interest earned on the funds held in the trust account and no previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares.
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Impact to remaining shareholders
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The redemptions in connection with our initial Business Combination will reduce the book value per share for our remaining shareholders, who will bear the burden of the deferred underwriting commissions and taxes payable.
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If the permitted purchases described above are made, there would be no impact to our remaining shareholders because the purchase price would not be paid by us.
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The redemption of our public shares if we fail to complete our initial Business Combination will reduce the book value per share for the shares held by our sponsor, who will be our only remaining shareholder after such redemptions.
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Competition
In identifying, evaluating
and selecting a target business for our initial Business Combination, we may encounter intense competition from other entities having
a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, public
companies, and operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience
identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial,
technical, human and other resources than us. Our ability to acquire larger target businesses will be limited by our available financial
resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation
to pay cash in connection with our public 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.
Facilities
We currently maintain our executive
offices at 200 Crescent Court, 19th Floor, Dallas, TX 75201. The cost for our use of this space is included in the $10,000 per month fee
we will pay to an affiliate of our sponsor for office space, administrative and support services. We consider our current office space
adequate for our current operations.
Employees
We currently have three executive
officers. These individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much
time as they deem necessary to our affairs until we have completed our initial Business Combination. The amount of time they will devote
in any time period will vary based on whether a target business has been selected for our initial Business Combination and the stage of
the Business Combination process we are in. We do not intend to have any full time employees prior to the completion of our initial Business
Combination.
Financial Information About Prospective Target Business and Internal
Controls
We
will provide shareholders with audited financial statements of the prospective target business as part of the tender offer materials or
proxy solicitation materials sent to shareholders to assist them in assessing the target business. In all likelihood, these financial
statements will need to be prepared in accordance with GAAP. We cannot assure you that any particular target business identified by us
as a potential acquisition candidate will have financial statements prepared in accordance with GAAP or that the potential target business
will be able to prepare its financial statements in accordance with GAAP. To the extent that this requirement cannot be met, we may not
be able to acquire the proposed target business. While this may limit the pool of potential acquisition candidates, we do not believe
that this limitation will be material.
We
are required to evaluate our internal control procedures for the fiscal year ending December 31, 2020 as required by the Sarbanes-Oxley
Act. If we cease to qualify as an emerging growth company and we are deemed to be either a large accelerated filer or an accelerated filer,
we will also be required to have our internal control procedures audited. A target company may not be in compliance with the provisions
of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to
achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
ITEM 1A. RISK FACTORS
You
should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report
on Form 10-K, including our financial statements, and related notes included elsewhere in this Annual Report on Form 10-K. If
any of the following risks were realized, our business, financial condition and operating results could be materially and adversely affected.
In that event, the trading price of our securities could decline, and you could lose part or all of your investment.
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 under the laws of the Cayman Islands with operations since the Initial Public Offering limited to pursuing and reviewing
potential opportunities for the initial Business Combination. 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.
Past performance by our management team or
their respective affiliates may not be indicative of future performance of an investment in us.
Any past experience or performance
of our management team and their respective affiliates is not a guarantee of either (i) our ability to successfully identify and execute
a transaction or (ii) success with respect to any Business Combination that we may consummate. You should not rely on the historical record
of our management team or their respective affiliates as indicative of the future performance of an investment in us or the returns we
will, or are likely to, generate going forward. Our management has no experience in operating special purpose acquisition companies.
Our shareholders may not be afforded an opportunity
to vote on our proposed initial Business Combination, which means we may complete our initial Business Combination even though a majority
of our shareholders do not support such a combination.
We may choose not to hold a
shareholder vote before we complete our initial Business Combination if the Business Combination would not require shareholder approval
under applicable law or stock exchange listing requirement. For instance, if we were seeking to acquire a target business where the consideration
we were paying in the transaction was all cash, we would typically not be required to seek shareholder approval to complete such a transaction.
Except for as required by applicable law or stock exchange listing requirement, 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 complete our initial Business Combination even if holders
of a majority of our issued and outstanding ordinary shares do not approve of the Business Combination we complete.
Please see Item 1. “Business
— Shareholders May Not Have the Ability to Approve Our Initial Business Combination” for additional information.
Your only opportunity to affect the investment
decision regarding a potential Business Combination may be limited to the exercise of your right to redeem your shares from us for cash.
At the time of an investment
in us, you will not be provided with an opportunity to evaluate the specific merits or risks of any 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, 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.
If we seek shareholder approval of our initial
Business Combination, our sponsor and members of our management team have agreed to vote in favor of such initial Business Combination,
regardless of how our public shareholders vote.
Our sponsor owns on an
as-converted basis, 20% of our outstanding ordinary shares. Our sponsor and members of our management team also may from time to
time purchase Class A ordinary shares prior to our initial Business Combination. Our amended and restated memorandum and articles of
association will provide that, if we seek shareholder approval, we will complete our initial Business Combination only if a majority
of the ordinary shares, represented in person or by proxy and entitled to vote thereon, voted at a general meeting are voted in
favor of the Business Combination. As a result, in addition to our initial shareholders’ founder shares, we
would need 22,781,251, or 37.5% (assuming all issued and outstanding shares are voted), or 3,796,876, or 6.25% (assuming only the
minimum number of shares representing a quorum are voted), of the 60,750,000 public shares sold in our Initial Public Offering and
subsequent underwriters’ over-allotment option exercise to be voted in favor of an initial Business Combination in order to
have our initial Business Combination approved. Accordingly, if we seek shareholder approval of our initial Business Combination,
the agreement by our sponsor and each member of our management team to vote in favor of our initial Business Combination will
increase the likelihood that we will receive the requisite shareholder approval for such initial Business Combination.
The ability of our public shareholders to redeem
their shares for cash may make our financial condition unattractive to potential Business Combination targets, which may make it difficult
for us to enter into a Business Combination with a target.
We may seek to enter into a
Business Combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth
or a certain amount of cash. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing
condition and, as a result, would not be able to proceed with the Business Combination. Furthermore, in no event will we redeem our public
shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the
SEC’s “penny stock” rules). 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 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.
In evaluating a prospective target business
for our initial business combination, our management may rely on the availability of all of the funds from the sale of the forward purchase
securities to be used as part of the consideration to the sellers in the initial Business Combination. If the sale of the forward purchase
securities does not close, we may lack sufficient funds to consummate our initial Business Combination.
We have entered into a forward
purchase agreement with our sponsor providing for the purchase of up to 3,000,000 forward purchase units, and with the Zimmer Entity providing
for the purchase of up to 27,000,000 forward purchase units, at a purchase price of $10.00 per unit, in private placements to occur concurrently
with the closing of our initial Business Combination. However, if the sale of the forward purchase securities does not close, we may lack
sufficient funds to consummate our initial Business Combination. The obligations of our sponsor and the Zimmer Entity to purchase the
forward purchase securities are subject to the approval, prior to our entering into a definitive agreement for our initial Business Combination,
of their respective investment committees and the forward purchase agreements contain customary closing conditions.
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
will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If
a large number of shares are submitted for redemption, we may need to restructure the transaction to reserve a greater portion of the
cash in the trust account or arrange for additional third-party financing. Raising additional third-party financing may involve dilutive
equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability to
complete the most desirable Business Combination available to us or optimize our capital structure. The amount of the deferred underwriting
commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with an initial Business Combination.
The per-share amount we will distribute to shareholders who properly exercise their redemption rights will not be reduced by the deferred
underwriting commission and after such redemptions, the amount held in trust will continue to reflect our obligation to pay the entire
deferred underwriting commissions.
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 funds in 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 consummate an initial
Business Combination within 24 months after the closing of our Initial Public Offering may give potential target businesses leverage over
us in negotiating a Business Combination and may limit the time we have in which to conduct due diligence on potential Business Combination
targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial Business Combination
on terms that would produce value for our shareholders.
Any potential target business
with which we enter into negotiations concerning a Business Combination will be aware that we must consummate an initial Business Combination
within 24 months from the closing of our Initial Public Offering. Consequently, such target business may obtain leverage over us in negotiating
a Business Combination, knowing that if we do not complete our initial Business Combination with that particular target business, we may
be unable to complete our initial Business Combination with any target business. This risk will increase as we get closer to the time
frame described above. In addition, we may have limited time to conduct due diligence and may enter into our initial Business Combination
on terms that we would have rejected upon a more comprehensive investigation.
Our search for a Business Combination, and
any target business with which we ultimately consummate a Business Combination, may be materially adversely affected by the recent coronavirus
(COVID-19) outbreak and the status of debt and equity markets.
In December 2019, a novel strain
of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of
the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease
(COVID-19) a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary
Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19,
and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic.” The COVID-19 outbreak has
and a significant outbreak of other infectious diseases could result in a widespread health crisis that could adversely affect the economies
and financial markets worldwide, and the business of any potential target business with which we consummate a Business Combination could
be materially and adversely affected.
Furthermore, we may be unable
to complete a Business Combination if continued concerns relating to COVID-19 continues to restrict travel, limit the ability to have
meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate
and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a Business Combination will depend
on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the
severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other
matters of global concern continue for an extensive period of time, our ability to consummate a Business Combination, or the operations
of a target business with which we ultimately consummate a Business Combination, may be materially adversely affected.
In addition, our ability to
consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other
events, including as a result of increased market volatility, decreased market liquidity in third-party financing being unavailable on
terms acceptable to us or at all.
We may not be able to consummate an initial
Business Combination within 24 months after the closing of our Initial Public Offering, in which case we would cease all operations except
for the purpose of winding up and we would redeem our public shares and liquidate.
We may not be able to find
a suitable target business and consummate an initial Business Combination within 24 months after the closing of our Initial Public Offering.
Our ability to complete our initial Business Combination may be negatively impacted by general market conditions, volatility in the capital
and debt markets and the other risks described herein. For example, the outbreak of COVID-19 continues to grow both in the U.S. and globally
and, while the extent of the impact of the outbreak on us will depend on future developments, it could limit our ability to complete our
initial Business Combination, including as a result of increased market volatility, decreased market liquidity and third-party financing
being unavailable on terms acceptable to us or at all. Additionally, the outbreak of COVID-19 may negatively impact businesses we may
seek to acquire. If we have not consummated an initial Business Combination within such applicable 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 earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000
of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely
extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any);
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 the case of clauses (ii) and (iii), to our obligations under Cayman Islands law
to provide for claims of creditors and the requirements of other applicable law. Our amended and restated memorandum and articles of association
will provide that, if we wind up for any other reason prior to the consummation of our initial Business Combination, we will follow the
foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business
days thereafter, subject to applicable Cayman Islands law. In either such case, our public shareholders may receive only $10.00 per public
share, or less than $10.00 per public share, on the redemption of their shares, and our warrants will expire worthless. See “If
third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received
by shareholders may be less than $10.00 per public share” and other risk factors herein.
If we seek shareholder approval of our initial
Business Combination, our sponsor, directors, executive officers, advisors and their affiliates may elect to purchase public shares or
warrants, which may influence a vote on a proposed Business Combination and reduce the public “float” of our Class A ordinary
shares or public warrants.
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 sponsor, directors, executive officers, advisors or their affiliates may purchase public shares or warrants
in privately negotiated transactions or in the open market either prior to or following the completion of our initial Business Combination,
although they are under no obligation to do so. However, they have no current commitments, plans or intentions to engage in such transactions
and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase
public shares or warrants in such transactions.
In the event that our
sponsor, directors, executive officers, advisors or their 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 purpose of any such transaction could be to (1) vote in favor of the
Business Combination and thereby increase the likelihood of obtaining shareholder approval of the Business Combination, (2) reduce
the number of public warrants outstanding or vote such warrants on any matters submitted to the warrant holders for approval in
connection with our initial Business Combination or (3) 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. Any such purchases of our securities may result in the completion of our initial
Business Combination that may not otherwise have been possible. In addition, if such purchases are made, the public
“float” of our Class A ordinary shares or public warrants may be reduced and the number of beneficial holders of our
securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on
a national securities exchange. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the
extent such purchasers are subject to such reporting requirements.
If a shareholder fails to receive notice of
our offer to redeem our public shares in connection with our initial Business Combination, or fails to comply with the procedures for
tendering its shares, such shares may not be redeemed.
We will comply with the proxy
rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial Business Combination. Despite our
compliance with these rules, if a shareholder fails to receive our proxy solicitation or tender offer materials, as applicable, such shareholder
may not become aware of the opportunity to redeem its shares. In addition, the proxy solicitation or tender offer 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 redeem or tender 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. Therefore, to liquidate your investment, you may be forced to
sell your public shares or warrants, potentially at a loss.
Our public shareholders will
be entitled to receive funds from the trust account only upon the earliest to occur of: (i) our completion of an initial Business Combination,
and then only in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations
described herein, (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 holders of our
Class A ordinary shares the right to have their shares redeemed in connection with our initial Business Combination or to redeem 100%
of our public shares if we do not complete our initial Business Combination within 24 months from the closing of our Initial Public Offering
or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, and (iii) the redemption
of our public shares if we have not consummated an initial Business Combination within 24 months from the closing of our Initial Public
Offering, subject to applicable law and as further described herein. Public shareholders who redeem their Class A ordinary shares in connection
with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the trust account upon
the subsequent completion of an initial Business Combination or liquidation if we have not consummated an initial Business Combination
within 24 months from the closing of our Initial Public Offering, with respect to such Class A ordinary shares so redeemed. In no other
circumstances will a public shareholder have any right or interest of any kind in the trust account. Holders of warrants will not have
any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be
forced to sell your public shares or warrants, potentially at a loss.
NYSE may delist our securities from trading
on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading
restrictions.
Our units as well as our Class
A ordinary shares and warrants are listed on the NYSE. While we currently meet the minimum listing standards set forth in the NYSE listing
standards, we cannot assure you that our securities will be, or will continue to be, listed on the NYSE in the future or prior to our
initial Business Combination. In order to continue listing our securities on the NYSE prior to our initial Business Combination, we must
maintain certain financial, distribution and share price levels. Generally, we must maintain a minimum market capitalization (generally
$50,000,000) and a minimum number of holders of our securities (generally 300 public holders).
Additionally, our units will
not be traded after completion of our initial Business Combination and, in connection with our initial Business Combination, we will be
required to demonstrate compliance with the NYSE initial listing requirements, which are more rigorous than the NYSE continued listing
requirements, in order to continue to maintain the listing of our securities on the NYSE.
For instance, in order for
our shares to be listed upon the consummation of our Business Combination, at such time our share price would generally be required to
be at least $4.00 per share, our total market capitalization would be required to be at least $200.0 million, the aggregate market value
of publicly held shares would be required to be at least $100.0 million and we would be required to have at least 400 round lot shareholders.
We cannot assure you that we will be able to meet those listing requirements at that time.
If the NYSE delists any of
our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect
such securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences,
including:
• a limited
availability of market quotations for our securities;
• reduced
liquidity for our securities;
• a determination
that our Class A ordinary shares are a “penny stock” which will require brokers trading in our Class A ordinary shares to
adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
• a limited
amount of news and analyst coverage; and
• a decreased
ability to issue additional securities or obtain additional financing in the future.
The National Securities Markets
Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which
are referred to as “covered securities.” Because our units as well as Class A ordinary shares and warrants are listed on the
NYSE, our units, Class A ordinary shares and warrants qualify as covered securities under the statute. Although the states are preempted
from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion
of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular
case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check
companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these
powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were
no longer listed on the NYSE, our securities would not qualify as covered securities under the statute and we would be subject to regulation
in each state in which we offer our securities.
You will not be entitled to protections normally
afforded to investors of many other blank check companies.
Since the net proceeds of our
Initial Public Offering and the sale of the private placement warrants are intended to be used to complete an initial Business Combination
with a target business that has not been selected, we may be deemed to be a “blank check” company under the United States
securities laws. However, because we have net tangible assets in excess of $5,000,001 and have filed a Current Report on Form 8-K, including
an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check
companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things,
this means we will have a longer period of time to complete our initial Business Combination than do companies subject to Rule 419. Moreover,
if we were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless
and until the funds in the trust account were released to us in connection with our completion of an initial Business Combination.
If we seek shareholder approval of our initial
Business Combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders
are deemed to hold in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 15%
of our Class A ordinary shares.
If we seek shareholder
approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination
pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public
shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or
as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with
respect to more than an aggregate of 15% of the shares sold in our Initial Public Offering, which we refer to as the “Excess
Shares,” without our prior consent. However, we would not be restricting our shareholders’ ability to vote all of their
shares (including Excess Shares) for or against our initial Business Combination. Your inability to redeem the Excess Shares will
reduce your influence over our ability to complete our initial Business Combination and you could suffer a material loss on your
investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions
with respect to the Excess Shares if we complete our initial Business Combination. And as a result, you will continue to hold that
number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market
transactions, potentially at a loss.
Because of our limited resources and the significant
competition for Business Combination opportunities, it may be more difficult for us to complete our initial Business Combination. If we
have not consummated our initial Business Combination within the required time period, our public shareholders may receive only $10.00
per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We expect to encounter intense
competition from other entities having a business objective similar to ours, including private investors (which may be individuals or
investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses
we intend to acquire. Many of these individuals and entities are well established and have extensive experience in identifying and effecting,
directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors
possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively
limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially
acquire with the net proceeds of our Initial Public Offering and the sale of the private placement warrants, our ability to compete with
respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent
competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated
to offer holders of our public shares the right to redeem their shares for cash at the time of our initial Business Combination in conjunction
with a shareholder vote or via a tender offer. Target companies will be aware that this may reduce the resources available to us for our
initial Business Combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a Business
Combination. If we have not consummated our initial Business Combination within the required time period, our public shareholders may
receive only $10.00 per public share, or less in certain circumstances, 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 $10.00 per public share” and other risk factors herein.
If the net proceeds from our Initial Public
Offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for
the 24 months following the closing of our Initial Public Offering, it could limit the amount available to fund our search for a target
business or businesses and our ability to complete our initial Business Combination, and we will depend on loans from our sponsor, its
affiliates or members of our management team to fund our search and to complete our initial Business Combination.
Of the net proceeds of our
Initial Public Offering and the sale of the private placement warrants, as of December 31, 2020, only $2,687,399 was available to us outside
the Trust Account to fund our working capital requirements. We believe that the funds available to us outside of the trust account, together
with funds available from loans from our sponsor, its affiliates or members of our management team will be sufficient to allow us to operate
for at least the 24 months following the closing of our Initial Public Offering; however, we cannot assure you that our estimate is accurate,
and our sponsor, its affiliates or members of our management team are under no obligation to advance funds to us in such circumstances.
Of the funds available to us, we expect to use a portion of the funds available to us to pay fees to consultants to assist us with our
search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision
(a provision in letters of intent designed to keep target businesses from “shopping” around for transactions with other companies
or investors on terms more favorable to such target businesses) with respect to a particular proposed Business Combination, although we
do not have any current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from
a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not
have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.
If we are required to seek
additional capital, we would need to borrow funds from our sponsor, its affiliates, members of our management team or other third parties
to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor their affiliates is under any obligation
to us in such circumstances. Any such advances may be repaid only from funds held outside the trust account or from funds released to
us upon completion of our initial Business Combination. Up to $1,500,000 of such loans may be convertible into warrants of the post-business
combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement
warrants. Prior to the completion of our initial Business Combination, we do not expect to seek loans from parties other than our sponsor,
its affiliates or members of our management team as we do not believe third parties will be willing to loan such funds and provide a waiver
against any and all rights to seek access to funds in our trust account. If we have not consummated our initial Business Combination within
the required time period because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate
the trust account. Consequently, our public shareholders may only receive an estimated $10.00 per public share, or possibly less, on our
redemption of our public shares, and our warrants will expire worthless. See “If third parties bring claims against us, the proceeds
held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per public
share” and other risk factors herein.
Subsequent to our completion of our initial
Business Combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have
a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you
to lose some or all of your investment.
Even if we conduct extensive
due diligence on a target business with which we combine, we cannot assure you that this diligence will identify all material issues with
a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or
that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced
to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting
losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize
in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate
impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our
securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result
of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any
holders who choose to retain their securities following the Business Combination could suffer a reduction in the value of their securities.
Such holders 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 $10.00
per public share.
Our placing of funds in the
trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers,
prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest
or claim of any kind in or to any monies held in the trust account for the benefit of our public 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 have not consummated an initial Business Combination within 24 months from the
closing of our Initial Public Offering, 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 ten years following redemption. Accordingly, the per-share redemption amount received by public shareholders could be
less than the $10.00 per public share initially held in the trust account, due to claims of such creditors. Pursuant to a letter
agreement, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third-party (other than our
independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed
entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i) $10.00 per public share
and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less
than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be
withdrawn to pay our tax obligations, provided that such liability will not apply to any claims by a third-party or prospective
target business that executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims
under our indemnity of the underwriters of our Initial Public Offering against certain liabilities, including liabilities under the
Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third-party, our sponsor will
not be responsible to the extent of any liability for such third-party claims.
However, we have not asked
our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds
to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company. Therefore, we
cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made
against the trust account, the funds available for our initial Business Combination and redemptions could be reduced to less than $10.00
per public share. In such event, we may not be able to complete our initial Business Combination, and you would receive such lesser amount
per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third
parties including, without limitation, claims by vendors and prospective target businesses.
Our directors may decide not to enforce the
indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution
to our public shareholders.
In the event that the proceeds
in the trust account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the
trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value
of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, and our sponsor asserts that it
is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors
would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect
that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to
us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties 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 $10.00 per public share.
We may not have sufficient funds to satisfy
indemnification claims of our directors and executive officers.
We have agreed to indemnify
our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right,
title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any
reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership of public shares). Accordingly,
any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the trust account or (ii)
we consummate an initial Business Combination. Our obligation to indemnify our officers and directors may discourage shareholders from
bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of
reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might
otherwise benefit us and our 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.
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 some or 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 estate and subject to the claims of third parties with priority over the claims
of our shareholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received
by our shareholders in connection with our liquidation may be reduced.
If we are deemed to be an investment company
under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted,
which may make it difficult for us to complete our initial Business Combination.
If we are deemed to be an investment
company under the Investment Company Act, our activities may be restricted, including:
• restrictions
on the nature of our investments; and
• restrictions
on the issuance of securities, each of which may make it difficult for us to complete our initial Business Combination.
In addition, we may have imposed
upon us burdensome requirements, including:
• registration
as an investment company with the SEC;
• adoption
of a specific form of corporate structure; and
• reporting,
record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to.
In order not to be regulated
as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged
primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting,
owning, holding or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government
securities and cash items) on an unconsolidated basis. Our business is to identify and complete a Business Combination and thereafter
to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view to resale
or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our
principal activities subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested
in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity
of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which
invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in
other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted
at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or
private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company
Act. The trust account is intended as a holding place for funds pending the earliest to occur of either: (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 holders of our
Class A ordinary shares the right to have their shares redeemed in connection with our initial Business Combination or to redeem 100%
of our public shares if we do not complete our initial Business Combination within 24 months from the closing of our Initial Public Offering
or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares; or (iii) absent our completing
an initial Business Combination within 24 months from the closing of our Initial Public Offering, our return of the funds held in the
trust account to our public shareholders as part of our redemption of the public shares. If we do not invest the proceeds as discussed
above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance
with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability
to complete a Business Combination. If we have not consummated our initial Business Combination within the required time period, our public
shareholders may receive only $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our
warrants will expire worthless.
Changes in laws or regulations, or a failure
to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial
Business Combination, and results of operations.
We are subject to laws and
regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other
legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those
laws and regulations and their interpretation and application may also change from time to time and those changes could have a material
adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations,
as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our
initial Business Combination, and results of operations.
If we have not consummated an initial Business
Combination within 24 months from the closing of our Initial Public Offering, our public shareholders may be forced to wait beyond such
24 months before redemption from our trust account.
If we have not
consummated an initial Business Combination within 24 months from the closing of our Initial Public Offering, the proceeds then on
deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to
pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of
our public shares, as further described herein. Any redemption of public shareholders from the trust account will 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 Law. In that case, investors may be forced to wait beyond 24 months from the closing our Initial Public Offering before
the redemption proceeds of our trust account become available to them, and they receive the return of their pro rata portion of the
proceeds from our trust account. We have no obligation to return funds to investors prior to the date of our redemption or
liquidation unless, prior thereto, we consummate our initial Business Combination or amend certain provisions of our amended and
restated memorandum and articles of association, and only then in cases where investors have sought to redeem their Class A ordinary
shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we do not complete our
initial Business Combination and do not amend certain provisions of our amended and restated memorandum and articles of association.
Our amended and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the
consummation of our initial Business Combination, we will follow the foregoing procedures with respect to the liquidation of the
trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman
Islands law.
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, 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 for a fine of $18,292.68 and 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.
In accordance with the NYSE
corporate governance requirements, we are not required to hold an annual general meeting until one year after our first fiscal year end
following our listing on the NYSE. There is no requirement under the Companies Law for us to hold annual or extraordinary general meetings
to appoint directors. Until we hold an annual general meeting, public shareholders may not be afforded the opportunity to appoint directors
and to discuss company affairs with management. Our board of directors is divided into three classes with only one class of directors
being appointed in each year and each class (except for those directors appointed prior to our first annual general meeting) serving a
three-year term.
Holders of Class A ordinary shares will not
be entitled to vote on any appointment of directors we hold prior to our initial Business Combination.
Prior to our initial Business
Combination, only holders of our founder shares will have the right to vote on the appointment of directors. Holders of our public shares
will not be entitled to vote on the appointment of directors during such time. In addition, prior to our initial Business Combination,
holders of a majority of our founder shares may remove a member of the board of directors for any reason. Accordingly, you may not have
any say in the management of our company prior to the consummation of an initial Business Combination.
We are not registering the Class A ordinary
shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration
may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants
except on a cashless basis and potentially causing such warrants to expire worthless.
We are not registering
the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this
time. However, under the terms of the warrant agreement, we have agreed that, as soon as practicable, but in no event later than 20
business days after the closing of our initial Business Combination, we will use our commercially reasonable efforts to file with
the SEC a registration statement covering the issuance of such shares, and we will use our commercially reasonable efforts to cause
the same to become effective within 60 business days after the closing of our initial Business Combination and to maintain the
effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants
expire or are redeemed. We cannot assure you that we will be able to do so if, for example, any facts or events arise which
represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements
contained or incorporated by reference therein are not current, complete or correct or the SEC issues a stop order. If the shares
issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the above requirements, we
will be required to permit holders to exercise their warrants on a cashless basis, in which case, the number of Class A ordinary
shares that you will receive upon cashless exercise will be based on a formula subject to a maximum amount of shares equal to 0.361
Class A ordinary shares per warrant (subject to adjustment). 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 from registration is available. Notwithstanding the above, if our Class A ordinary shares are at the time of any exercise
of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security”
under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants
to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect,
we will not be required to file or maintain in effect a registration statement, but we will use our commercially reasonable efforts
to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. Exercising the
warrants on a cashless basis could have the effect of reducing the potential “upside” of the holder’s investment
in our company because the warrant holder will hold a smaller number of Class A ordinary shares upon a cashless exercise of the
warrants they hold. 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. There
may be a circumstance where an exemption from registration exists for holders of our private placement warrants to exercise their
warrants while a corresponding exemption does not exist for holders of the public warrants included as part of units sold in our
Initial Public Offering. In such an instance, our sponsor, the Zimmer Entity, and their permitted transferees (which may include our
directors and executive officers) would be able to exercise their warrants and sell the ordinary shares underlying their warrants
while holders of our public warrants would not be able to exercise their warrants and sell the underlying ordinary shares. If and
when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the
underlying Class A ordinary shares for sale under all applicable state securities laws. As a result, we may redeem the warrants as
set forth above even if the holders are otherwise unable to exercise their warrants.
The 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 warrants may become exercisable for a security other than
the Class A ordinary shares. As a result, if the surviving company redeems your warrants for securities pursuant to the warrant agreement,
you may receive a security in a company of which you do not have information at this time. Pursuant to the warrant agreement, the surviving
company will be required to use commercially reasonable efforts to register the issuance of the security underlying the warrants within
twenty business days of the closing of an initial Business Combination.
The grant of registration rights to our sponsor,
our independent directors and the Zimmer Entity 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 prior to the closing of our Initial Public Offering, our sponsor, our independent directors and the Zimmer
Entity, and their permitted transferees can demand that we register the resale of the Class A ordinary shares into which founder
shares are convertible, the private placement warrants and the Class A ordinary shares issuable upon exercise of the private
placement warrants, and warrants that may be issued upon conversion of working capital loans and the Class A ordinary shares
issuable upon conversion of such warrants. Pursuant to the Forward Purchase Agreements, we have agreed to use reasonable best
efforts (i) to file within 30 days after the closing of the initial Business Combination a registration statement with the SEC for a
secondary offering of the forward purchase shares and the forward purchase warrants (and underlying Class A ordinary shares), (ii)
to cause such registration statement to be declared effective promptly thereafter but in no event later than sixty (60) days after
the initial filing, (iii) to maintain the effectiveness of such registration statement until the earliest of (A) the date on which
our sponsor, the Zimmer Entity or their respective assignees cease to hold the securities covered thereby, and (B) the date all of
the securities covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act and
(iv) after such registration statement is declared effective, cause us to conduct firm commitment underwritten offerings, subject to
certain limitations. In addition, the Forward Purchase Agreements provide for certain “piggy-back” registration rights
to the holders of forward purchase securities to include their securities in other registration statements filed by us. 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 securities that is expected when the securities owned by our
sponsor or its permitted transferees are registered for resale.
Because we are neither limited to evaluating
a target business in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial
Business Combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
We may pursue Business Combination
opportunities in any sector, except that we will not, under our amended and restated memorandum and articles of association, be permitted
to effectuate our initial Business Combination solely with another blank check company or similar company with nominal operations. Because
we have not yet selected any specific target business with respect to a Business Combination, there is no basis to evaluate the possible
merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition
or prospects. To the extent we complete our initial Business Combination, we may be affected by numerous risks inherent in the business
operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established
record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development
stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot
assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete
due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances
that those risks will adversely impact a target business. We also cannot assure you that an investment in our units will ultimately prove
to be more favorable to investors than a direct investment, if such opportunity were available, in a Business Combination target. Accordingly,
any holders who choose to retain their securities following the Business Combination could suffer a reduction in the value of their securities.
Such holders are unlikely to have a remedy for such reduction in value.
We may seek acquisition opportunities in industries
or sectors which may or may not be outside of our management’s area of expertise.
We will consider a Business
Combination outside of our management’s area of expertise if a Business Combination target is presented to us and we determine that
such candidate offers an attractive acquisition opportunity for our company. Although our management will endeavor to evaluate the risks
inherent in any particular Business Combination target, we cannot assure you that we will adequately ascertain or assess all of the significant
risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in
our Initial Public Offering than a direct investment, if an opportunity were available, in a Business Combination target. 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 herein 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 holders who choose to retain their securities
following the Business Combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy
for such reduction in value.
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 stock exchange listing requirements, or we decide to obtain shareholder approval for business or other
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 have not consummated our initial Business Combination within the required
time period, our public shareholders may receive only $10.00 per public share, or less in certain circumstances, on the liquidation
of our trust account and our warrants will expire worthless.
We are not required to obtain an opinion from
an independent accounting or investment banking firm, and consequently, you may have no assurance from an independent source that the
price we are paying for the business is fair to our shareholders from a financial point of view.
Unless we complete our initial
Business Combination with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm or
another independent entity that commonly renders valuation opinions that the price we are paying is fair to our shareholders 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 proxy
solicitation or tender offer materials, as applicable, related to our initial Business Combination.
We may issue additional Class A ordinary shares
or preference shares to complete our initial Business Combination or under an employee incentive plan after completion of our initial
Business Combination. We may also issue Class A ordinary shares upon the conversion of the founder 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 will authorize the issuance of up to 500,000,000 Class A ordinary shares, par value $0.0001 per share, 50,000,000
Class B ordinary shares, par value $0.0001 per share, and 5,000,000 preference shares, par value $0.0001 per share. There are currently
60,750,000 and 15,187,500 authorized and issued Class A ordinary shares and Class B ordinary shares, respectively, which amount does not
take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the Class B
ordinary shares, if any. The Class B ordinary shares will automatically convert into Class A ordinary shares (which such Class A ordinary
shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the trust account
if we fail to consummate an initial Business Combination) at the time of our initial Business Combination or earlier at the option of
the holders thereof as described herein and in our amended and restated memorandum and articles of association. There are no preference
shares issued and outstanding.
We may issue a substantial
number of additional Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive
plan after completion of our initial Business Combination. We may also issue Class A ordinary shares in connection with our redeeming
the warrants or 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 as set forth herein. However, our amended and restated memorandum and articles
of association will provide, among other things, that prior to or in connection with our initial Business Combination, we may not issue
additional shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial Business
Combination or on any other proposal presented to shareholders prior to or in connection with the completion of an initial Business Combination.
These provisions of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum
and articles of association, may be amended with a shareholder vote. The issuance of additional ordinary or preference shares:
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may significantly dilute the equity interest of investors in
our Initial Public Offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in
the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;
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may subordinate the rights of holders of Class A ordinary shares
if preference shares are issued with rights senior to those afforded our Class A ordinary shares;
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could cause a change in control if a substantial number of Class
A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any,
and could result in the resignation or removal of our present officers and directors;
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may have the effect of delaying or preventing a change of control
of us by diluting the share ownership or voting rights of a person seeking to obtain control of us;
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may adversely affect prevailing market prices for our units,
Class A ordinary shares and/or warrants; and
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may not result in adjustment to the exercise price of our warrants.
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Unlike some other similarly structured blank
check companies, our sponsor will receive additional Class A ordinary shares if we issue shares to consummate an initial Business Combination.
The founder shares will automatically
convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have any redemption rights
or be entitled to liquidating distributions from the trust account if we fail to consummate an initial Business Combination) at the time
of our initial Business Combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary
shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the
total number of ordinary shares issued and outstanding upon completion of our Initial Public Offering, plus (ii) the total number of Class
A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or
deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination (including the
forward purchase shares, but not the forward purchase warrants), excluding any Class A ordinary shares or equity-linked securities exercisable
for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial Business Combination
and any private placement warrants issued to our sponsor, any of its affiliates or any members of our management team upon conversion
of working capital loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.
This is different than some other similarly structured blank check companies in which the initial shareholders will only be issued an
aggregate of 20% of the total number of shares to be outstanding prior to the initial Business Combination.
Resources could be wasted in researching acquisitions
that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.
If we have not consummated our initial Business Combination within the required time period, our public shareholders may receive only
$10.00 per public share, or less 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 have
not consummated our initial Business Combination within the required time period, our public shareholders may receive only $10.00 per
public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
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 Class A ordinary shares or
warrants, the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting
requirements. Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up
exception. Depending on the particular circumstances the application of the start-up exception may be subject to uncertainty, and
there cannot be any assurance that we will qualify for the start-up exception. Accordingly, there can be no assurances with respect
to our status as a PFIC for our current taxable year or any subsequent taxable year. Our actual PFIC status for any taxable year,
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, upon written request, we will endeavor to provide to a U.S. Holder such information as the Internal Revenue Service
(“IRS”) may require, including a PFIC Annual Information Statement, in order to enable the U.S. Holder to make and
maintain a “qualified electing fund” election, but there can be no assurance that we will timely provide such required
information, and such election would be unavailable with respect to our warrants in all cases. We urge U.S. investors to consult
their tax advisors regarding the possible application of the PFIC rules. For a more detailed discussion of the tax consequences of
PFIC classification to U.S. Holders.
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 Law, reincorporate in the jurisdiction
in which the target company or business is located or in another jurisdiction. The transaction may require a shareholder or warrant holder
to recognize taxable income in the jurisdiction in which the shareholder or warrant holder is a tax resident or in which its members are
resident if it is a tax transparent entity. We do not intend to make any cash distributions to shareholders or warrant holders to pay
such taxes. Shareholders or warrant holders may be subject to withholding taxes or other taxes with respect to their ownership of us after
the reincorporation.
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.
We are dependent upon our executive officers
and directors and their loss could adversely affect our ability to operate.
Our operations are dependent
upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe that our success depends
on the continued service of our officers and directors, at least until we have completed our initial Business Combination. In addition,
our executive 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 their 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 executive officers.
The unexpected loss of the
services of one or more of our directors or executive officers could have a detrimental effect on us.
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, director 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.
Our key personnel may negotiate employment
or consulting agreements with a target business in connection with a particular Business Combination, and a particular Business Combination
may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to receive compensation
following our initial Business Combination and as a result, may cause them to have conflicts of interest in determining whether a particular
Business Combination is the most advantageous.
Our key personnel may be able
to remain with our 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. Such negotiations also could make such key personnel’s
retention or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence their
motivation in identifying and selecting a target business. In addition, pursuant to an agreement to entered into prior to the closing
of our Initial Public Offering, our sponsor, upon and following consummation of an initial Business Combination, is entitled to nominate
three individuals for appointment to our board of directors, as long as the sponsor holds any securities covered by the registration and
shareholder rights agreement.
We may have a limited ability to assess the
management of a prospective target business and, as a result, may affect our initial Business Combination with a target business whose
management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability
of effecting our initial Business Combination with a prospective target business, our ability to assess the target business’s management
may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target business’s management,
therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target
business’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and
profitability of the post-combination business may be negatively impacted. Accordingly, any holders who choose to retain their securities
following the Business Combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy
for such reduction in value.
The officers and directors of an acquisition
candidate may resign upon completion of our initial Business Combination. The loss of a Business Combination target’s key personnel
could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition
candidate’s key personnel upon the completion of our initial Business Combination cannot be ascertained at this time. Although we
contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate
following our initial Business Combination, it is possible that members of the management of an acquisition candidate will not wish to
remain in place.
Our executive officers and directors will allocate
their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs.
This conflict of interest could have a negative impact on our ability to complete our initial Business Combination.
Our executive officers
and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest
in allocating their time between our operations and our search for 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. Each of our executive officers
is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers
are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors also serve as
officers and board members for other entities. If our executive 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.
Our officers and directors presently have,
and any of them in the future may have, additional, fiduciary or contractual obligations to other entities, including another blank check
company, and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Until we consummate our initial
Business Combination, we intend to engage in the business of identifying and combining with one or more businesses or entities. Each of
our officers and directors presently has, and any of them in the future may have, additional fiduciary or contractual obligations to other
entities pursuant to which such officer or director is or will be required to present a Business Combination opportunity to such entity,
subject to his or her fiduciary duties under Cayman Islands law. Accordingly, they may have conflicts of interest in determining to which
entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target
business may be presented to another entity prior to its presentation to us, subject to their fiduciary duties under Cayman Islands law.
In addition, our sponsor, officers
and directors may in the future become affiliated with other blank check companies that may have acquisition objectives that are similar
to ours. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
These conflicts may not be resolved in our favor and a potential target business may be presented to such other blank check companies
prior to its presentation to us, subject to our officers’ and directors’ fiduciary duties under Cayman Islands law. Our amended
and restated memorandum and articles of association will provide that we renounce our interest in any Business Combination opportunity
offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director
or officer of the company and it is an opportunity that we are able to complete on a reasonable basis.
Our executive 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, executive 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 sponsor, our directors or executive
officers, although we do not intend to do so. 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.
The personal and financial
interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing
a Business Combination. Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target
business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular Business Combination
are appropriate and in our shareholders’ best interest. If this were the case, it would be a breach of their fiduciary duties to
us as a matter of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing on our shareholders’
rights. However, we might not ultimately be successful in any claim we may make against them for such reason.
We may engage in a Business Combination with
one or more target businesses that have relationships with entities that may be affiliated with our sponsor, executive officers, directors,
initial shareholders or the forward purchasers which may raise potential conflicts of interest.
In light of the
involvement of our sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses
affiliated with our sponsor, executive officers, directors, initial shareholders or forward purchasers. Our directors also serve as
officers and board members for other entities. Pursuant to an agreement to be entered into in connection with our Initial Public
Offering, Greg Gordon will serve as a non-voting board observer until the consummation of an initial Business Combination. Other
than certain customary confidentiality obligations, he is not required to devote any time to our affairs and will not be a party to
the letter agreement and has other affiliations. Our sponsor, officers and directors may sponsor, form or participate in other blank
check companies similar to ours during the period in which we are seeking an initial Business Combination. Such entities may compete
with us for Business Combination opportunities. Our sponsor, officers and directors are not currently aware of any specific
opportunities for us to complete our initial Business Combination with any entities with which they are affiliated, and there have
been no substantive 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 and guidelines for a Business Combination and such transaction was approved
by a majority of our independent and disinterested directors. Despite our agreement to obtain an opinion from an independent
investment banking firm or another independent entity that commonly renders valuation opinions 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
sponsor, executive officers, directors or initial shareholders, 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, executive officers and directors
will lose their entire investment in us if our initial Business Combination is not completed (other than with respect to public shares
they may acquire during or after our Initial Public Offering), a conflict of interest may arise in determining whether a particular Business
Combination target is appropriate for our initial Business Combination.
On July 13, 2020, our sponsor
paid $25,000 to cover certain expenses on our behalf in consideration of 20,125,000 Class B ordinary shares, par value $0.0001. On October
23, 2020, our sponsor surrendered 3,593,750 shares, resulting in an aggregate of 16,531,250 Class B ordinary shares outstanding. As
a result of the underwriters’ election to partially exercise their over-allotment option, 1,343,750 additional Founder Shares were
forfeited, resulting 15,187,500 Founder Shares outstanding as of December 31, 2020. Prior to the initial investment in the company
of $25,000 by the sponsor, the company had no assets, tangible or intangible. The per share price of the Founder Shares was determined
by dividing the amount contributed to the company by the number of founder shares issued. Founder Shares have been surrendered so as to
maintain the number of Founder Shares, on an as converted basis, at 20% of our issued and outstanding ordinary shares. The Founder Shares
will be worthless if we do not complete an initial Business Combination. In addition, our sponsor and the Zimmer Entity pursuant to written
agreements, purchased an aggregate of 14,150,000 private placement warrants in private placements (13,500,000 simultaneously with the
Initial Public Offering and 650,000 additional in connection with the underwriters’ over-allotment option exercise), each exercisable
to purchase one Class A ordinary share at $11.50 per share, subject to adjustment, at a price of $1.00 per warrant ($14,150,000 in the
aggregate). If we do not consummate an initial Business Combination within 24 months from the closing of our Initial Public Offering,
the private placement warrants will expire worthless. The personal and financial interests of our executive officers and directors may
influence their motivation in identifying and selecting a target Business Combination, completing an initial Business Combination and
influencing the operation of the business following the initial Business Combination. This risk may become more acute as the 24-month
anniversary of the closing of our Initial Public Offering nears, which is the deadline for our consummation of an initial Business Combination.
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 current
commitments to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt
to complete our initial Business Combination. We and our officers have agreed that we will not incur any indebtedness unless we have obtained
from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no
issuance of debt will affect the per-share amount available for redemption from the trust account. Nevertheless, the incurrence of debt
could have a variety of negative effects, including:
•default and
foreclosure on our assets if our operating revenues after an initial Business Combination are insufficient to repay our debt obligations;
• acceleration
of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants
that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
• our immediate
payment of all principal and accrued interest, if any, if the debt is payable on demand;
• our inability
to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt
is outstanding;
• our inability
to pay dividends on our Class A ordinary shares;
• using a
substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on
our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
• limitations
on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
• increased
vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
and
• limitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of
our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
We may only be able to complete one Business
Combination with the proceeds of our Initial Public Offering and the sale of the private placement warrants, which will cause us to be
solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively
impact our operations and profitability.
The net proceeds from our Initial
Public Offering, the underwriters’ over-allotment option exercise, and the sale of the private placement warrants provided us with
proceeds that we may use to complete our initial Business Combination. In addition, prior to the consummation of our Initial Public Offering,
we entered into Forward Purchase Agreements with our sponsor providing for the purchase of up to 3,000,000 forward purchase units, and
with the Zimmer Entity providing for the purchase of up to 27,000,000 forward purchase units, at a purchase price of $10.00 per unit,
in private placements to occur concurrently with the closing of our initial Business Combination. The forward purchase securities will
be issued only in connection with the closing of the initial Business Combination. The proceeds from the sale of forward purchase securities
may be used as part of the consideration to the sellers in our initial Business Combination, expenses in connection with our initial Business
Combination or for working capital in the post-transaction company. There can be no assurance that the purchase of the forward purchase
securities will close.
We may effectuate our initial
Business Combination with a single-target business or multiple-target businesses simultaneously or within a short period of time. However,
we may not be able to effectuate our initial Business Combination with more than one target business because of various factors, including
the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that
present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By
completing our initial Business Combination with only a single entity, our lack of diversification may subject us to numerous economic,
competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading
of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different
industries or different areas of a single industry. Accordingly, the prospects for our success may be:
• solely dependent
upon the performance of a single business, property or asset; or
• dependent
upon the development or market acceptance of a single or limited number of products, processes or services.
This lack of diversification
may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon
the particular industry in which we may operate subsequent to our initial Business Combination.
We may attempt to simultaneously complete Business
Combinations with multiple prospective targets, which may hinder our ability to complete our initial Business Combination and give rise
to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously
acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its
business is contingent on the simultaneous closings of the other Business Combinations, which may make it more difficult for us, and delay
our ability, to complete our initial Business Combination. With multiple Business Combinations, we could also face additional risks, including
additional burdens and costs with respect to possible multiple negotiations and due diligence (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.
Our management may not be able to maintain
control of a target business after our initial Business Combination. Upon the loss of control of a target business, new management may
not possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial
Business Combination so that the post-business combination 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-business combination
company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in
the target business sufficient for us not to be required to register as an investment company under the Investment Company Act. We will
not consider any transaction that does not meet such criteria. Even if the post-business combination company owns 50% or more of the voting
securities of the target, our shareholders prior to our initial Business Combination may collectively own a minority interest in the post-business
combination company, depending on valuations ascribed to the target and us in the Business Combination. For example, we could pursue a
transaction in which we issue a substantial number of new Class A ordinary shares in exchange for all of the outstanding ordinary shares,
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 Class A ordinary shares, our shareholders immediately prior to such transaction could own less
than a majority of our outstanding Class A 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 control of the 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 target business
and its operations, we may not be able to properly ascertain or assess all of the significant risk factors until we complete our
Business Combination. If we are not able to achieve our desired operational improvements, or the improvements take longer to
implement than anticipated, we may not achieve the gains that we anticipate. Furthermore, some of these risks and complexities may
be outside of our control and leave us with no ability to control or reduce the chances that those risks and complexities will
adversely impact a target business. Such combination may not be as successful as a combination with a smaller, less complex
organization.
We do not have a specified maximum redemption
threshold. The absence of such a redemption threshold may make it possible for us to complete our initial Business Combination with which
a substantial majority of our shareholders do not agree.
Our amended and restated memorandum
and articles of association will not provide a specified maximum redemption threshold, except that in no event will we redeem our public
shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the
SEC’s “penny stock” rules). As a result, we may be able to complete our initial Business Combination even though a substantial
majority of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder approval
of our initial Business Combination and do not conduct redemptions in connection with our initial Business Combination pursuant to the
tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors
or their affiliates. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are
validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed Business Combination
exceed the aggregate amount of cash available to us, we will not complete the Business Combination or redeem any shares, all Class A ordinary
shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate Business Combination.
In order to effectuate an initial Business
Combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing instruments,
including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated 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 recent past, amended various provisions of their charters and governing instruments, including
their warrant agreements. For example, blank check companies have amended the definition of Business Combination, increased redemption
thresholds, extended the time to consummate an initial Business Combination and, with respect to their warrants, amended their warrant
agreements to require the warrants to be exchanged for cash and/or other securities. 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, meaning the
approval of holders of at least two-thirds of our ordinary shares 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 50% of the public warrants and, solely with respect to any amendment
to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants,
50% of the number of the then outstanding private placement warrants, and, solely with respect to any amendment to the terms of the forward
purchase warrants or any provision of the warrant agreement with respect to the forward purchase warrants, 50% of the then-outstanding
forward purchase warrants. In addition, our amended and restated memorandum and articles of association will 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) that would modify the substance or timing of our obligation to provide holders of our Class
A ordinary shares the right to have their shares redeemed in connection with our initial Business Combination or to redeem 100% of our
public shares if we do not complete our initial Business Combination within 24 months from the closing of our Initial Public Offering
or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. To the extent any of such
amendments would be deemed to fundamentally change the nature of any of the securities offered through this registration statement, we
would register, or seek an exemption from registration for, the affected securities.
The provisions of our amended and restated
memorandum and articles of association that relate to the rights of holders of our Class A ordinary shares (and corresponding provisions
of the agreement governing the release of funds from our trust account) may be amended with the approval of a special resolution which
requires the approval of the holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company,
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 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 the rights
of a company’s shareholders, without approval by a certain percentage of the company’s shareholders. In those companies, amendment
of these provisions typically requires approval by between 90% and 100% of the company’s shareholders. Our amended and restated
memorandum and articles of association will provide that any of its provisions related to the rights of holders of our Class A ordinary
shares (including the requirement to deposit proceeds of our Initial Public Offering and the 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)
may be amended if approved by special resolution, meaning holders of at least two-thirds of our ordinary shares who attend and vote at
a general meeting of the company, and corresponding provisions of the trust agreement governing the release of funds from our trust account
may be amended if approved by holders of at least 65% of our ordinary shares; provided that the provisions of our amended and restated
memorandum and articles of association governing the appointment or removal of directors prior to our initial Business Combination may
only be amended by a special resolution passed by not less than two-thirds of our ordinary shares who attend and vote at our general meeting
which shall include the affirmative vote of a simple majority of our Class B ordinary shares. Our sponsor and its permitted transferees,
if any, who will collectively beneficially own, on an as-converted basis, 20% of our Class A ordinary shares upon the closing of our Initial
Public Offering, 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 they choose. As a result, we may be able to amend the provisions of our amended and
restated memorandum and articles of association which govern our pre-business combination behavior more easily than some other blank check
companies, and this may increase our ability to complete 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.
Our sponsor, executive officers
and directors have agreed, pursuant to agreements with us, that they will not propose any amendment to our amended and restated memorandum
and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary
shares the right to have their shares redeemed in connection with our initial Business Combination or to redeem 100% of our public shares
if we do not complete our initial Business Combination within 24 months from the closing of our Initial Public Offering or (B) with respect
to any other provision relating to the rights of holders of our Class A ordinary shares, 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 earned on the funds held in the trust account and not
previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares. Our shareholders
are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against
our sponsor, executive officers and directors for any breach of these agreements. As a result, in the event of a breach, our shareholders
would need to pursue a shareholder derivative action, subject to applicable law.
We may be unable to obtain additional financing
to complete our initial Business Combination or to fund the operations and growth of a target business, which could compel us to restructure
or abandon a particular Business Combination. If we have not consummated our initial Business Combination within the required time period,
our public shareholders may receive only $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account
and our warrants will expire worthless.
Although we believe that
the net proceeds of our Initial Public Offering and the sale of the private placement warrants will be sufficient to allow us to
complete our initial Business Combination, because we have not yet selected any prospective target business we cannot ascertain the
capital requirements for any particular transaction. If the net proceeds of our Initial Public Offering and the sale of the private
placement warrants prove to be insufficient, either because of the size of our initial Business Combination, the depletion of the
available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares from
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. The
current economic environment may make it difficult for companies to obtain acquisition financing. To the extent that additional
financing proves to be unavailable when needed to complete our initial Business Combination, we would be compelled to either
restructure the transaction or abandon that particular Business Combination and seek an alternative target business candidate. If we
have not consummated our initial Business Combination within the required time period, our public shareholders may receive only
$10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire
worthless. In addition, even if we do not need additional financing to complete our initial Business Combination, we may require
such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a
material adverse effect on the continued development or growth of the target business. None of our officers, directors or
shareholders is required to provide any financing to us in connection with or after our initial Business Combination.
Our sponsor controls a substantial interest
in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support.
Our sponsor owns, on an as-converted
basis, 20% of our issued and outstanding ordinary shares. Accordingly, it may exert a substantial influence on 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.
If our sponsor purchases any additional Class A ordinary shares in the aftermarket or in privately negotiated transactions, this would
increase its control. Neither our sponsor nor, to our knowledge, any of our officers or directors, have any current intention to purchase
additional securities, other than as disclosed in this document. 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, our board of directors, whose members
were elected by our sponsor, is and will be divided into three classes, each of which will generally serve for a term of three years with
only one class of directors being appointed in each year. We may not hold an annual general meeting to appoint new directors prior to
the completion of our initial Business Combination, in which case all of the current directors will continue in office until at least
the completion of the Business Combination. If there is an annual general meeting, as a consequence of our “staggered” board
of directors, only a minority of the board of directors will be considered for election and our sponsor, because of its ownership position,
will control the outcome, as only holders of our Class B ordinary shares will have the right to vote on the election of directors and
to remove directors prior to our initial Business Combination. Accordingly, our sponsor will continue to exert control at least until
the completion of our initial Business Combination. In addition, we have agreed not to enter into a definitive agreement regarding an
initial Business Combination without the prior consent of our sponsor.
Our sponsor contributed $25,000 and, accordingly,
you will experience immediate and substantial dilution from the purchase of our Class A ordinary shares.
Upon closing of our Initial
Public Offering, and assuming no value is ascribed to the warrants included in the units, public shareholders incurred an immediate and
substantial dilution of approximately 97.0% (or $9.70 per share, assuming no exercise of the underwriters’ over-allotment option)
due to the issuance of founder shares. This dilution would increase to the extent that the anti-dilution provisions of the founder shares
result in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the founder shares at the time
of our initial Business Combination and would become exacerbated to the extent that public shareholders seek redemptions from the trust
for their public shares. In addition, because of the anti-dilution protection in the founder shares, any equity or equity-linked securities
issued in connection with our initial Business Combination would be disproportionately dilutive to our Class A ordinary shares.
We may amend the terms of the warrants in a
manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then-outstanding public
warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of
our Class A ordinary shares purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants will be
issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and
us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose
of (i) curing any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description
of the terms of the warrants and the warrant agreement set forth herein, or defective provision (ii) amending the provisions
relating to cash dividends on ordinary shares as contemplated by and in accordance with the warrant agreement or (iii) adding or
changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant
agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of
the warrants, provided that the approval by the holders of at least 50% of the then-outstanding public warrants is required to make
any change that adversely affects the interests of the registered holders of 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 and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the
warrant agreement with respect to the private placement warrants, 50% of the number of the then outstanding private placement
warrants. Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then-outstanding
public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of
the warrants, convert the warrants into cash, shorten the exercise period or decrease the number of Class A ordinary shares
purchasable upon exercise of a warrant.
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 will
provide 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 the forum provisions
of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the
Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed
to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with
any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of
process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign
action as agent for such warrant holder.
This choice-of-forum provision
may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company,
which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable
with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving
such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations
and result in a diversion of the time and resources of our management and board of directors.
We may redeem unexpired warrants prior to their
exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to
redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01
per warrant, provided that the closing price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for
adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) for any 20 trading days within a 30
trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other
conditions are met. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to
register or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem the
warrants as set forth above even if the holders are otherwise unable to exercise the warrants. Redemption of the outstanding
warrants could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous
for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or
(iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect would be
substantially less than the market value of your warrants.
In addition, we have the ability
to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10
per warrant upon a minimum of 30 days’ prior written notice of redemption provided that the closing price of our Class A ordinary
shares equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise
price of a warrant) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such
redemption and provided that certain other conditions are met, including that holders will be able to exercise their warrants prior to
redemption for a number of Class A ordinary shares determined based on the redemption date and the fair market value of our Class A ordinary
shares. The value received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised
their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the
warrants, including because the number of ordinary shares received is capped at 0.361 Class A ordinary shares per warrant (subject to
adjustment) irrespective of the remaining life of the warrants.
None of the private placement
warrants will be redeemable by us as so long as they are held by our sponsor or its permitted transferees.
Our warrants may have an adverse effect on
the market price of our Class A ordinary shares and make it more difficult to effectuate our initial Business Combination.
We issued warrants to purchase
30,375,000 of our Class A ordinary shares in our Initial Public Offering and in connection with the underwriters’ over-allotment
option exercise. We also issued an aggregate of 14,150,000 private placement warrants (13,500,000 simultaneous with the Initial Public
Offering and 650,000 in connection with the underwriters’ over-allotment option exercise), each exercisable to purchase one Class
A ordinary share at $11.50 per share, subject to adjustment. In addition, if the sponsor, its affiliates or a member of our management
team makes any working capital loans, it may convert up to $1,500,000 of such loans into up to an additional 1,500,000 private placement
warrants, at the price of $1.00 per warrant. We may also issue up to 15,000,000 forward purchase warrants pursuant to the Forward Purchase
Agreements. We may also issue Class A ordinary shares in connection with our redemption of our warrants.
To the extent we issue ordinary
shares for any reason, including to effectuate a Business Combination, the potential for the issuance of a substantial number of additional
Class A ordinary shares upon exercise of these warrants could make us a less attractive acquisition vehicle to a target business. Such
warrants, when exercised, 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 may make it more difficult to effectuate a business
transaction or increase the cost of acquiring the target business.
Because each unit contains one-half of one
redeemable warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
Each unit contains one-half
of one redeemable warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and
only whole units will trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share,
we will, upon exercise, round down to the nearest whole number the number of Class A ordinary shares to be issued to the warrant holder.
We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of
a Business Combination since the warrants will be exercisable in the aggregate for one-half of the number of shares compared to units
that each contain a whole warrant to purchase one whole 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 a unit included a warrant to purchase one whole
share.
A provision of our warrant agreement may make
it more difficult for us to consummate an initial Business Combination.
Unlike some blank check companies,
if (i) we issue additional Class A ordinary shares or equity-linked securities, excluding the forward purchase 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 ordinary
share, (ii) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon,
available for the funding of our initial Business Combination on the date of the consummation of our initial Business Combination (net
of redemptions), and (iii) the Market Value is below $9.20 per share, then the exercise price of the warrants will be adjusted to be equal
to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger prices will be adjusted
(to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption
trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price. This may
make it more difficult for us to consummate an initial Business Combination with a target business.
Because we must furnish our 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 GAAP,
or international financial reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances
and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting
Oversight Board (United States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we
may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with
federal proxy rules and complete our initial Business Combination within the prescribed time frame.
We are an emerging growth company and a smaller
reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements
available to “emerging growth companies” or “smaller reporting companies,” this could make our securities less
attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth
company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions
from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”
including, but not limited to, not being required to comply with the auditor 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 Class A 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 accounting standards used.
Additionally, we are a “smaller
reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced
disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller
reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds
$250 million as of the prior June 30, 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 30. To the extent we take advantage of such
reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.
Compliance obligations under the Sarbanes-Oxley
Act may make it more difficult for us to effectuate a Business Combination, require substantial financial and management resources, and
increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley
Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year
ending December 31, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated filer and no longer qualify
as an emerging growth company, will we not be required to comply with the independent registered public accounting firm attestation requirement
on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of
the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business with which we seek
to complete our initial Business Combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy
of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act
may increase the time and costs necessary to complete any such acquisition.
Our warrants are accounted for as liabilities
and the changes in value of our warrants could have a material effect on our financial results.
On April 12, 2021, the Acting
Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting
and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting
and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC
Statement”). Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers
following a business combination, which terms are similar to those contained in the warrant agreement governing our warrants. As a result
of the SEC Statement, we reevaluated the accounting treatment of our 30,375,000 Public Warrants and our 14,150,000 Private Placement Warrants,
and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value each period reported
in earnings.
As a result, included on our
balance sheet as of December 31, 2020 contained elsewhere in this Annual Report are derivative liabilities related to embedded features
contained within our warrants. Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), provides for the
remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the
change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair value measurement,
our financial statements and results of operations may fluctuate quarterly based on factors which are outside of our control. Due to the
recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our warrants each reporting period and
that the amount of such gains or losses could be material.
In
connection with the restatement, we reassessed the effectiveness of our disclosure controls and procedures for the periods affected by
the restatement. As a result of that reassessment and in light of the SEC Staff Statement, we determined that our disclosure controls
and procedures for such periods were not effective with respect to the classification of the company’s warrants as components
of equity instead of as derivative liabilities. We plan to enhance our processes and controls to better evaluate our research and
understanding of the nuances of the complex accounting standards that apply to our financial statements. Our plans at this time
include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel
and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can
only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.
We have identified material weaknesses in our
internal control over financial reporting as of December 31, 2020. If we are unable to develop and maintain an effective system of internal
control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely
affect investor confidence in us and materially and adversely affect our business and operating results.
Following the issuance of the
SEC Statement on April 12, 2021, our management and our audit committee concluded that, in light of the SEC Statement, it was appropriate
to restate our previously issued audited financial statements as of and for the period ended December 31, 2020 (the “Restatement”).
See “Our warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our
financial results.” As part of such process, we identified a material weakness in our internal controls over financial reporting.
Management subsequently identified
errors made in its historical financial statements where the Company improperly classified some of its Class A common stock subject to
possible redemption. In accordance with ASC 480-10-S99, redemption provisions not solely within the control of the Company would require
common stock subject to redemption to be classified outside of permanent equity. Historically, a
portion of the Class A ordinary shares was classified as permanent equity to maintain net tangible assets greater than $5,000,000 on the
basis that the Company will consummate its initial business combination only if the Company has net tangible assets of at least $5,000,001.
Our management and our audit committee concluded that, it was appropriate to restate our previously issued audited financial statements
as of and for the period ended December 31, 2020. See “Our Class A ordinary shares are classified
as temporary equity, outside of permanent equity, at each period.” As part of such process, we identified an additional material
weakness in our internal controls over financial reporting.
A material weakness is a deficiency,
or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material
misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely basis.
Effective internal controls
are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material
weaknesses. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately
have the intended effects.
If we identify any new material
weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our
accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may
be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable
stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result.
We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential
future material weaknesses.
We may face litigation
and other risks as a result of the material weaknesses in our internal control over financial reporting.
As
a result of these material weaknesses and the related restatements to the change in accounting for the Warrants, and the reclassification
of Class A ordinary shares as temporary equity outside of permanent equity at each period, and other matters raised or that may in the
future be raised by the SEC, we face potential for litigation or other disputes which may include, among others, claims invoking the federal
and state securities laws, contractual claims or other claims arising from the restatements and material weaknesses in our internal control
over financial reporting and the preparation of our financial statements. As of the date of this Amendment, we have no knowledge of any
such litigation or dispute. However, we can provide no assurance that such litigation or dispute will not arise in the future. Any such
litigation or dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial
condition or our ability to complete a Business Combination.
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 executive officers, or enforce judgments obtained in the United States courts against our directors
or officers.
Our corporate affairs
will be governed by our amended and restated memorandum and articles of association, the Companies Law (as the same may be
supplemented or amended from time to time) and the common law of the Cayman Islands. We will also be subject to the federal
securities laws of the United States. 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 Maples
and Calder, 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.
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 will contain provisions that may discourage unsolicited takeover proposals that shareholders may consider
to be in their best interests. These provisions will include a staggered board of directors, the ability of the board of directors to
designate the terms of and issue new series of preference shares, and the fact that prior to the completion of our initial Business Combination
only holders of our Class B ordinary shares, which have been issued to our sponsor, are entitled to vote on the appointment of directors,
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.
An investment in us may result in uncertain
or adverse U.S. federal income tax consequences.
An investment in us may result
in uncertain U.S. federal income tax consequences. For instance, because there are no authorities that directly address instruments similar
to our units, the allocation an investor makes with respect to the purchase price of a unit between the Class A ordinary shares and the
one-half of a warrant to purchase one Class A ordinary share included in each unit could be challenged by the IRS or courts. Furthermore,
the U.S. federal income tax consequences of a cashless exercise of warrants included in the units we issued in our Initial Public Offering
is unclear under current law. Finally, it is unclear whether the redemption rights with respect to our ordinary shares suspend the running
of a U.S. Holder’s holding period for purposes of determining whether any gain or loss realized by such holder on the sale or exchange
of Class A ordinary shares is long-term capital gain or loss and for determining whether any dividend we pay would be considered “qualified
dividends” for U.S. federal income tax purposes. Investors are urged to consult their tax advisors with respect to these and other
tax consequences when purchasing, holding or disposing of our securities.
Cyber incidents or attacks directed at us could
result in information theft, data corruption, operational disruption and/or financial loss.
We depend on digital
technologies, including information systems, infrastructure and cloud applications and services, including those of third parties
with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the
systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary
information and sensitive or confidential data. As an early stage company without significant investments in data security
protection, we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately
protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these
occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss.
Since only holders of our founder shares will
have the right to vote on the appointment of directors, the NYSE may consider us to be a “controlled company” within the meaning
of the NYSE rules and, as a result, we may qualify for exemptions from certain corporate governance requirements.
Only holders of our founder
shares will have the right to vote on the appointment of directors. As a result, the NYSE may consider us to be a “controlled company”
within the meaning of the NYSE corporate governance standards. Under the NYSE corporate governance standards, a company of which more
than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not
to comply with certain corporate governance requirements, including the requirements that:
• we have
a board that includes a majority of “independent directors,” as defined under the rules of the NYSE;
• we have
a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s
purpose and responsibilities; and
• we have
a nominating and corporate governance committee of our board that is comprised entirely of independent directors with a written charter
addressing the committee’s purpose and responsibilities.
We do not intend to utilize
these exemptions and intend to comply with the corporate governance requirements of the NYSE, subject to applicable phase-in rules. However,
if we determine in the future to utilize some or all of these exemptions, you will not have the same protections afforded to shareholders
of companies that are subject to all of the NYSE corporate governance requirements.
Risks Associated with Acquiring and Operating
a Business in Foreign Countries
If we pursue a target company with operations
or opportunities outside of the United States for our initial Business Combination, we may face additional burdens in connection with
investigating, agreeing to and completing such initial Business Combination, and if we effect such initial Business Combination, we would
be subject to a variety of additional risks that may negatively impact our operations.
If we pursue a target a company
with operations or opportunities outside of the United States for our initial Business Combination, we would be subject to risks associated
with cross-border Business Combinations, including in connection with investigating, agreeing to and completing our initial Business Combination,
conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies
and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial Business
Combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an
international setting, including any of the following:
• costs and
difficulties inherent in managing cross-border business operations;
• rules and
regulations regarding currency redemption;
• complex
corporate withholding taxes on individuals;
• claws governing
the manner in which future Business Combinations may be effected;
• exchange
listing and/or delisting requirements;
• tariffs
and trade barriers;
• regulations
related to customs and import/export matters;
• local or
regional economic policies and market conditions;
• unexpected
changes in regulatory requirements;
• longer payment
cycles;
• tax issues,
such as tax law changes and variations in tax laws as compared to the United States;
• currency
fluctuations and exchange controls;
• rates of
inflation;
• challenges
in collecting accounts receivable;
• cultural
and language differences;
• employment
regulations;
• underdeveloped
or unpredictable legal or regulatory systems;
• corruption;
• protection
of intellectual property;
• social unrest,
crime, strikes, riots and civil disturbances;
• regime changes
and political upheaval;
• terrorist
attacks, natural disasters and wars; and
• deterioration
of political relations with the United States.
We may not be able to adequately
address these additional risks. If we were unable to do so, we may be unable to complete such initial Business Combination, or, if we
complete such combination, our operations might suffer, either of which may adversely impact our business, financial condition and results
of operations.
If our management following our initial Business
Combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws,
which could lead to various regulatory issues.
Following our initial Business
Combination, our management may resign from their positions as officers or directors of the company and the management of the target business
at the time of the Business Combination will remain in place. Management of the target business may not be familiar with United States
securities laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming
familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect
our operations.
After our initial Business Combination, substantially
all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations in any such
country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and
social conditions and government policies, developments and conditions in the country in which we operate.
The economic, political and
social conditions, as well as government policies, of the country in which our operations are located could affect our business. Economic
growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future.
If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand
for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our
ability to find an attractive target business with which to consummate our initial Business Combination and if we effect our initial Business
Combination, the ability of that target business to become profitable.
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.
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.
We are subject to changing law and regulations
regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.
We are subject to rules and
regulations by various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight
of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply
with new and changing laws and regulations have resulted in and are likely to continue to result in, increased general and administrative
expenses and a diversion of management time and attention from seeking a Business Combination target.
Moreover, because these laws,
regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes
available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing
revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes,
we may be subject to penalty and our business may be harmed.