Item 1. Business.
Overview
We are a blank check company incorporated on March 31,
2020, as a Cayman Islands exempted company, for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share
purchase, reorganization or other similar business combination with one or more businesses, which we refer to as our initial business
combination. While we may pursue an initial business combination target in any industry or geographic location, we focused our search
for a target business in the IT infrastructure software and semiconductor sector. Our sponsor is ACE Convergence Acquisition LLC, a Delaware
limited liability company (our “Sponsor”).
Our registration statement for our initial public
offering (the “Initial Public Offering”) was declared effective on July 27, 2020. On July 30, 2020, we consummated
our Initial Public Offering of 23,000,000 units (the “Units” and, with respect to the Class A ordinary shares included
in the Units offered, the “Public Shares”), which includes the full exercise by the underwriters of their over-allotment option
in the amount of 3,000,000 Units, at $10.00 per Unit, generating gross proceeds of $230,000,000.
Simultaneously with the consummation of the Initial
Public Offering, we consummated the sale of 6,600,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per
Private Placement Warrant in a private placement to our Sponsor (the “Private Placement”), generating gross proceeds of $6,600,000.
Upon the closing of the Initial Public Offering
and the Private Placement, an amount of $230,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public
Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) with Continental
Stock Transfer & Trust Company acting as trustee, which was invested in U.S. government securities, within the meaning set forth
in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity
of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund investing solely in U.S. Treasuries
and meeting certain conditions under Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earliest of:
(i) the completion of an initial business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s
shareholders, 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 the Private Placement Warrants, although
substantially all of the net proceeds are intended to be applied generally toward consummating a business combination. The Nasdaq listing
rules require that the initial business combination must be with one or more operating businesses or assets with a fair market value
equal to at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the
income earned on the Trust Account). We will only complete a business combination if the post-business combination company owns or acquires
50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business
sufficient for it not to be required to register as an investment company under the Investment Company Act.
We intend to effectuate a business combination
using the proceeds from the Initial Public Offering and Private Placement, and from additional issuances of, if any, our capital stock
and our debt, or a combination of cash, stock and debt. As of December 31, 2020, we had not commenced any operations. All activities
from inception to December 31, 2020, were organizational activities, those necessary to prepare for the Initial Public Offering and,
after the Initial Public Offering, identifying a target company for a business combination. We will not generate any operating revenues
until after the completion of a business combination, at the earliest. We will generate non-operating income in the form of interest income
from the proceeds derived from the Initial Public Offering. Based on our business activities, we are a “shell company” as
defined under the Exchange Act of 1934, as amended (the “Exchange Act”), because we have no operations and nominal assets
consisting almost entirely of cash.
We will provide the holders of the public shares
(the “Public Shareholders”) with the opportunity to redeem all or a portion of their public shares upon the completion of
the business combination, either (i) in connection with a general meeting called to approve the business combination or (ii) by
means of a tender offer. The decision as to whether we will seek shareholder approval of a Business Combination or conduct a tender offer
will be made by us, solely in our discretion. The Public Shareholders will be entitled to redeem their Public Shares, equal to the aggregate
amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of the Business Combination
(initially to be $10.00 per Public Share), including interest (which interest shall be net of taxes payable), divided by the number of
then issued and outstanding public shares, subject to certain limitations as described in the prospectus. The per-share amount to be
distributed to the Public Shareholders who properly redeem their shares will not be reduced by the deferred underwriting commissions
that we will pay to the underwriters.
We have until January 30, 2022 (the “Combination
Period”) as may be extended from time to time by us as a result of a shareholder vote to amend our Amended and Restated Memorandum
and Articles of Association (an “Extension Period”) to consummate a Business Combination. However, if we have not completed
a Business Combination within the Combination Period or any Extension 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 100% of the Public
Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
(less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number
of then issued and outstanding Public Shares, which redemption will completely extinguish the rights of the Public Shareholders as shareholders
(including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following
such redemption, subject to the approval of our remaining Public Shareholders and Board of Directors, liquidate and dissolve, subject
in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to
complete a Business Combination within the Combination Period or any Extension Period.
Proposed Achronix Business Combination
On January 7, 2021, we entered into an Agreement
and Plan of Merger (the “Merger Agreement”) with Achronix Semiconductor Corp., a Delaware corporation (“Achronix”),
and ACE Convergence Subsidiary Corp., a Delaware corporation and our wholly owned subsidiary (“Merger Sub”).
Pursuant to the transactions contemplated by the
terms of the Merger Agreement (the “Achronix Business Combination”), and subject to the satisfaction or waiver of certain
conditions set forth therein, Merger Sub will merge with and into Achronix, with Achronix surviving the merger as a wholly owned subsidiary
of the Company (the “Merger”). Prior to the closing of the Achronix Business Combination (the “Closing”), the
Company shall domesticate as a Delaware Corporation (the “Domestication”) and shall immediately be renamed “Achronix
Semiconductor Corporation.”
In connection with the execution of the Merger
Agreement, (a) we entered into subscription agreements (the “Subscription Agreements”) with certain investors (collectively,
the “PIPE Investors”) pursuant to, and on the terms and subject to the conditions of which, the PIPE Investors have collectively
subscribed for 15,000,000 shares of ACE Common Stock (as defined below) for an aggregate purchase price equal to $150,000,000 (the “PIPE
Investment”), a portion of which is expected to be funded by one or more affiliates of the Sponsor, and which will be consummated
substantially concurrently with the Closing, subject to the terms and conditions contemplated by the Subscription Agreements; (b) certain
affiliates of the Sponsor (the “Backstop Investor”) entered into a backstop subscription agreement (the “Backstop Subscription
Agreement”) with the Company, pursuant to, and on the terms and subject to the conditions on which, the Backstop Investor has committed
to purchase, following the Domestication and prior to the Closing, shares of the Company’s common stock, par value $0.001 per share,
as such shares will exist as common stock following the Domestication, in a private placement for a purchase price of $10.00 per share
to backstop certain redemptions by the Company’s shareholders; and (c) the Company also announced entry into a Support Agreement
(the “Sponsor Support Agreement”), by and among the Company, the Sponsor, Achronix and certain other parties thereto, pursuant
to which the Sponsor and each director and officer of the Company agreed to, among other things, vote in favor of the Merger Agreement
and the transactions contemplated thereby, in each case, subject to the terms and conditions contemplated by the Sponsor Support Agreement.
In addition, we have entered into a Support Agreement (the “Achronix Stockholder Support Agreement”) by and among the Company,
Achronix and certain stockholders of Achronix (the “Key Stockholders”), pursuant to which the Key Stockholders have agreed
to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, in each case, subject to the
terms and conditions contemplated by the Achronix Stockholder Support Agreement.
The Merger Agreement contains customary representations,
warranties and covenants by the parties thereto and the Closing is subject to certain conditions as further described in the Merger Agreement.
For more information about the Merger Agreement
and the proposed Achronix Business Combination, see our Current Report on Form 8-K filed with the SEC on January 7, 2021, as
amended on January 8, 2021, and the Achronix Disclosure Statement that we filed with the SEC. Unless specifically stated, this Annual
Report does not give effect to the proposed Achronix Business Combination and does not contain the risks associated with the proposed
Achronix Business Combination. Such risks and effects relating to the proposed Achronix Business Combination will be included in the
Achronix Disclosure Statement.
Effecting a Business Combination
Our Business Strategy
Our strategy is to identify and complete a business
combination with an emerging leader in the IT infrastructure software/system and system on chip (“SoC”) markets that is well
positioned to capture significant value as the current industrial environment is digitally transformed.
Industrial enterprises, or more broadly enterprises,
are being ushered into an era of digital transformation catalysed by key technological advances in infrastructure IT. All of these mega-trends,
set against the backdrop of the shakeouts in the global economy in 2020, partially due to the outbreak of COVID-19, create a window for
the emergence of a new round of winners and losers among private infrastructure IT software and hardware companies. We believe these macroeconomic
disruptions will make legacy on-premise technology incumbents more determined to catch up and re-position for a migration path to address
opportunities in the cloud-based environment. Instead of accepting another dilutive round of private growth or venture capital, innovative
companies in need of capital to expand to the next level may prefer alternative funding from the public market, where they also can use
the public currency to pursue acquisitions, provide liquidity for employee stock options, tap into cheaper debt financing sources, and
enhance the corporate profile. Investors would also be hard-pressed to seek liquidity, especially those that have invested in private
companies for a long time. All of these conditions are favorable to our acquisition and value creation strategy, and we believe a business
combination with our company would be uniquely attractive to promising private infrastructure IT software and hardware companies fitting
certain of the above-described conditions, for the following reasons:
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Proceeds raised from our initial public offering provides a significant cash pool to a business combination target in need of growth capital which is critical to scaling the business and achieving its next level of development;
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Compared to traditional initial public offerings, a business combination with our company allows a target’s shareholders to achieve a higher percentage of cash realization;
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Our company and a target are able to mutually determine the price of the combination, allowing for greater protection against the volatility of the public market than in traditional initial public offerings;
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Compared with a traditional trade-sale, depending on the design of the deal structure, a business combination with our company may allow shareholders and management of a target to retain significant influence over the combined business and, given their equity stake in the combined business, capture more of the capital appreciation upside;
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Working with our management team may improve a target’s decision-making, particularly in a highly turbulent global economy;
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Our management team’s collective expertise will also be valuable to a target in developing strategy on re-positioning, cross-border corporate actions and business development.
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Business Combination Criteria
We intend to focus on target businesses with
valuations of $500 million or more. We may use other criteria and guidelines as well. Any evaluation relating to the merits of a particular
initial business combination may be based on these general criteria and guidelines as well as other considerations, factors and criteria
that our management may deem relevant. In the event that we decide to enter into an initial business combination with a target business
that does not meet the criteria and guidelines described herein, we will disclose that fact in our shareholder communications related
to the acquisition, which would be in the form of proxy solicitation materials or tender offer documents that we would file with the
SEC. The following general selection criteria will guide our screening of prospective targets:
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The business operates in industries in which our management team have technical, strategic and operational expertise to impart significant value;
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The company’s existing product portfolio already commands certain leading position in a well-defined subset of the market, where the company sustains certain competitive advantage over its competitors;
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The business proposition of the target can be clearly communicated to the capital market, with value-drivers that can be articulated clearly for the public market to monitor;
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The business presents a multi-year value-creation opportunity for which the expansionary funding from the business combination can be a powerful catalyst;
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The business is positioned in a market with under-addressed growth opportunities, or the business presents opportunities for strategic re-positioning through changes in its product portfolio, sales model, customer and contract priorities, quality of cash flow and capital structure and its geographical resource allocation, etc.;
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Particularly with the funding from the business combination and the immediate value-enhancement initiatives provided by our management team, the target business should demonstrate a clear short-term potential to achieve positive cashflow as demanded by the public market; and
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The business must have a governance and control system in place, and a management team that is mentally prepared, to live up to the standards of a US listed company.
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Additional Disclosures
Our Acquisition Process
Each of our directors and officers presently has,
and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer
or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our directors
or officers becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary
or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such business combination
opportunity to such entity, subject to his or her fiduciary duties under Cayman Islands law. We do not believe, however, that the fiduciary
duties or contractual obligations of our directors or officers will materially affect our ability to identify and pursue business combination
opportunities (if we do not consummate the proposed Achronix Business Combination) or complete our initial business combination, including
the proposed Achronix Business Combination.
Our Sponsor, directors and officers have agreed,
pursuant to a written agreement, not to participate in the formation of, or become an officer or director of, any other special purpose
acquisition company with a class of securities registered under the Exchange Act until we have entered into a definitive agreement regarding
our initial business combination or we have failed to complete our initial business combination within 18 months after the closing of
our Initial Public Offering.
Initial Business Combination
Nasdaq listing rules require that our initial
business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets
held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account).
We refer to this as the 80% fair market value test. If our board of directors is not able to independently determine the fair market value
of the target business or businesses, we will obtain an opinion from an independent investment banking firm or another independent entity
that commonly renders valuation opinions with respect to the satisfaction of such criteria. We do not currently intend to purchase multiple
businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the
case.
We anticipate structuring our initial business
combination so that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the issued and
outstanding equity interests or assets of the target business or businesses. We may, however, structure our initial business combination
such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to
meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination
if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise
acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under
the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target,
our shareholders prior to our initial business combination may collectively own a minority interest in the post-transaction company,
depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction
in which we issue a substantial number of new shares in exchange for all of the issued and outstanding capital stock, shares or other
equity securities of a target business or issue a substantial number of new shares to third-parties in connection with financing our
initial business combination. 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 issued and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets
of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses
that is owned or acquired is what will be valued for purposes of the 80% fair market value test. If our initial business combination
involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the target businesses.
Competition
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. Additionally, the number of blank check companies looking for business combination targets has
increased compared to recent years and many of these blank check companies are sponsored by entities or persons that have significant
experience with completing business combinations. While we believe there are numerous target businesses we could potentially acquire with
the net proceeds from our Initial Public Offering and Private Placement, if the proposed Achronix Business Combination is not consummated,
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, in the event we seek shareholder approval of our initial business combination and we are obligated to pay cash for our Class A
ordinary shares, it will potentially reduce the resources available to us for our initial business combination. Any of these obligations
may place us at a competitive disadvantage in successfully negotiating a business combination. If we have not completed our initial business
combination within the required time period, our public shareholders may receive only approximately $10.00 per share, or less in certain
circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
Employees
We currently have four officers and do not intend
to have any full-time employees prior to the completion of our initial business combination. Members of our management team are not obligated
to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs
until we have completed our initial business combination. The amount of time that any such person will devote in any time period will
vary based on the status of the proposed Achronix Business Combination and, if the proposed Achronix Business Combination is not consummated,
whether a different target business has been selected for our initial business combination and the current stage of the business combination
process.
Item 1.A. Risk Factors.
An investment in our securities involves a
high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in
this Annual Report, including our financial statements and related notes, before making a decision to invest in our securities. If any
of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event,
the trading price of our securities could decline, and you could lose all or part of your investment. The risks and uncertainties described
below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material,
may also become important factors that adversely affect our business, financial condition and operating results. For risk factors related
to the proposed Achronix Business Combination, see the “Risk Factors” section of the Achronix Disclosure Statement that we
have filed with the SEC.
Risks Relating to Our Search for, and Consummation
of or Inability to Consummate, a Business Combination
Our public shareholders may not be afforded
an opportunity to vote on our proposed business combination, which means we may complete our initial business combination even though
a majority of our public shareholders do not support such a combination.
We may not hold a shareholder vote to approve
our initial business combination unless the business combination would require shareholder approval under applicable law or stock exchange
rules or if we decide to hold a shareholder vote for business or other reasons. For instance, Nasdaq listing rules currently
allow us to engage in a tender offer in lieu of a general meeting, but would still require us to obtain shareholder approval if we were
seeking to issue more than 20% of our issued and outstanding shares to a target business as consideration in any business combination.
Therefore, if we were structuring a business combination that required us to issue more than 20% of our issued and outstanding shares,
we would seek shareholder approval of such business combination. However, except as required by applicable law or stock exchange rules,
the decision as to whether we will seek shareholder approval of a proposed business combination or will allow shareholders to sell their
shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing
of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. Accordingly, we
may consummate our initial business combination even if holders of a majority of the issued and outstanding ordinary shares do not approve
of the business combination we consummate.
If we seek shareholder approval of our initial
business combination, our initial shareholders, directors and officers have agreed to vote in favor of such initial business combination,
regardless of how our public shareholders vote.
Unlike some other blank check companies in which
the initial shareholders agree to vote their founder shares in accordance with the majority of the votes cast by the public shareholders
in connection with an initial business combination, our initial shareholders, directors and officers have agreed (and their permitted
transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote their founder shares and any public
shares held by them in favor of our initial business combination. As a result, in addition to our initial shareholders’ founder
shares, we would need 8,625,001, or 37.5% (assuming all issued and outstanding shares are voted) of the 23,000,000 public shares sold
in the Initial Public Offering to be voted in favor of an initial business combination in order to have such initial business combination
approved, assuming no resolution or other approval is required pursuant to Cayman Islands or other applicable law. We expect that our
initial shareholders and their permitted transferees will own at least 20% of our issued and outstanding ordinary shares at the time of
any such shareholder vote. Accordingly, if we seek shareholder approval of our initial business combination, it is more likely that the
necessary shareholder approval will be received than would be the case if such persons agreed to vote their founder shares in accordance
with the majority of the votes cast by our public shareholders.
Your only opportunity to affect the investment
decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash,
unless we seek shareholder approval of such business combination.
Since our board of directors may complete a business
combination without seeking shareholder approval, public shareholders may not have the right or opportunity to vote on the business combination,
unless we seek such shareholder approval. Accordingly, if we do not seek shareholder approval, your only opportunity to affect the investment
decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which
will be at least 20 business days) set forth in our tender offer documents mailed to our public shareholders in which we describe our
initial business combination.
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. The amount of the deferred underwriting commissions payable to the
underwriters will not be adjusted for any shares that are redeemed in connection with a business combination and such amount of deferred
underwriting discount is not available for us to use as consideration in an initial business combination. If we are able to consummate
an initial business combination, the per-share value of shares held by non-redeeming shareholders will reflect our obligation to pay and
the payment of the deferred underwriting commissions. 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 following such redemptions, or any greater net tangible asset or cash requirement
that may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted
redemption requests would cause our net tangible assets to be less than $5,000,001 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.
The ability of our public shareholders to
exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination
or optimize our capital structure.
At the time we enter into an agreement for our
initial business combination, we will not know how many shareholders may exercise their redemption rights and, therefore, we will need
to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial
business combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us
to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the Trust Account to meet such requirements,
or arrange for third-party financing. In addition, if a larger number of shares is submitted for redemption than we initially expected,
we may need to restructure the transaction to reserve a greater portion of the cash in the Trust Account or arrange for third-party financing.
Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable
levels. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize
our capital structure.
The ability of our public shareholders to
exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination
would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination agreement
requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount of cash
at closing, the probability that our initial business combination would be unsuccessful increases. If our initial business combination
is unsuccessful, you would not receive your pro rata portion of the Trust Account until we liquidate the Trust Account. If you are in
need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a
discount to the pro rata amount per share in the Trust Account. In either situation, you may suffer a material loss on your investment
or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your shares in the
open market.
The requirement that we complete our initial
business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating a business
combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular
as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that
would produce value for our shareholders.
Any potential target business with which we enter
into negotiations concerning a business combination will be aware that we must complete our initial business combination within 18 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 end of the 18-month
period. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that
we would have rejected upon a more comprehensive investigation.
We may not be able to complete our initial
business combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up
and we would redeem our public shares and liquidate, in which case our public shareholders may receive only $10.00 per share, or less
than such amount in certain circumstances, and our warrants will expire worthless.
Our Sponsor, directors and officers have agreed
that we must complete our initial business combination within 18 months from the closing of our Initial Public Offering. We may not be
able to find a suitable target business and complete our initial business combination within such time period. Our ability to complete
our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and
the other risks described herein, including as a result of terrorist attacks, natural disasters or a significant outbreak of infectious
diseases. 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 and other events (such as terrorist attacks, natural disasters or a significant
outbreak of other infectious diseases) may negatively impact businesses we may seek to acquire.
If we have not completed our initial business
combination within such time period or during any Extension Period, we will: (1) cease all operations except for the purpose of
winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a
per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (less up to
$100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued
and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including
the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption,
subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our
obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such case, our
public shareholders may receive only $10.00 per share, or less than $10.00 per share, on the redemption of their shares, and our warrants
will expire worthless. See “— If third parties bring claims against us, the proceeds held in the Trust Account could be reduced
and the per-share redemption amount received by shareholders may be less than $10.00 per share” and other risk factors herein.
Our search for a business combination, and
any target business with which we ultimately consummate a business combination, may be materially adversely affected by the coronavirus
(“COVID-19”) outbreak and other events and the status of debt and equity markets.
In December 2019, a novel strain of coronavirus
was reported to have surfaced, which has and is continuing to spread throughout parts of the world, including the United States. On January 30,
2020, the World Health Organization declared the outbreak of 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 adversely affected, and other events (such as terrorist attacks, natural
disasters or a significant outbreak of other infectious diseases) could adversely affect, economies and financial markets worldwide, business
operations and the conduct of commerce generally, and the business of any potential target business with which we consummate a Business
Combination could be, or may already have been, materially and adversely affected. Furthermore, we may be unable to complete a Business
Combination if concerns relating to COVID-19 continue to restrict travel or 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 events (such as terrorist attacks,
natural disasters or a significant outbreak of other infectious diseases) 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 (such as terrorist
attacks, natural disasters or a significant outbreak of other infectious diseases), including as a result of increased market volatility
and decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all.
Finally, the outbreak of COVID-19 may also have
the effect of heightening many of the other risks described in this “Risk Factors” section, such as those related to the market
for our securities and crossborder transactions.
If we seek shareholder approval of our initial
business combination, our sponsor, directors, officers, advisors or any of their respective affiliates may elect to purchase shares or
warrants from public shareholders, which may influence a vote on a proposed business combination and reduce the public “float”
of our securities.
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer
rules, our Sponsor, directors, officers, advisors or any of their respective 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.
Any such price per share may be different than
the amount per share a public shareholder would receive if it elected to redeem its shares in connection with our initial business combination.
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, officers, advisors or any of their respective 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, our sponsor, directors, officers, advisors or any of their respective
affiliates are under no obligation or duty to do so and they have no current commitments, plans or intentions to engage in such purchases
or other transactions and have not formulated any terms or conditions for any such purchases or other transactions. The purpose of such
purchases could be to vote such shares in favor of our initial business combination and thereby increase the likelihood of obtaining
shareholder approval of our initial business combination or to satisfy a closing condition in an agreement with a target that requires
us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that
such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public
warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial
business combination. This may result in the completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public
“float” of our securities and the number of beneficial holders of our securities may be reduced, possibly making it difficult
to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
If a shareholder fails to receive notice
of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for
tendering its shares, such shares may not be redeemed.
We will comply with the tender offer rules or
proxy rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with
these rules, if a shareholder fails to receive our tender offer or proxy materials, as applicable, such shareholder may not become aware
of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that we will furnish
to holders of our public shares in connection with our initial business combination will describe the various procedures that must be
complied with in order to validly tender or redeem public shares. In the event that a shareholder fails to comply with these procedures,
its shares may not be redeemed.
You are not entitled to protections normally
afforded to investors of many other blank check companies.
Because we had net tangible assets in excess of
$5,000,000 upon the successful completion of the Initial Public Offering and the Private Placement and filed a Current Report on Form 8-K,
including an audited balance sheet of the company demonstrating this fact, we are exempt from rules promulgated by the SEC to protect
investors in blank check companies, such as Rule 419. Accordingly, investors are not 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 the Initial Public Offering was subject to Rule 419, that rule would prohibit the release
of any interest earned on funds held in the Trust Account to us unless and until the funds in the Trust Account were released to us in
connection with our completion of an initial Business Combination.
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders
are deemed to hold in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess
of 15% of our Class A ordinary shares.
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer
rules, our amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate
of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under
Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the
shares sold in the 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 completed our initial business combination within the required time period, our public shareholders may receive only approximately
$10.00 per share, or less in certain circumstances, on our redemption of their shares, and our warrants will expire worthless.
We expect to encounter intense competition from
other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships),
other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire.
Many of these individuals and entities are well established and have extensive experience in identifying and effecting, directly or indirectly,
acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical,
human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted
with those of many of these competitors. Additionally, the number of blank check companies looking for Business Combination targets has
increased compared to recent years and many of these blank check companies are Sponsored by entities or persons that have significant
experience with completing Business Combinations. While we believe there are numerous target businesses we could potentially acquire
with the net proceeds of the Initial Public Offering and the sale of the private placement 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, in the event
we seek shareholder approval of our initial business combination and we are obligated to pay cash for our Class A ordinary shares,
it will potentially reduce the resources available to us for our initial business combination. Any of these obligations may place us
at a competitive disadvantage in successfully negotiating a business combination. If we have not completed our initial business combination
within the required time period, our public shareholders may receive only approximately $10.00 per 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 share” and other risk factors herein.
As the number of special purpose acquisition
companies increases, there may be more competition to find an attractive target for an initial Business Combination. This could increase
the costs associated with completing our initial Business Combination and may result in our inability to find a suitable target for our
initial Business Combination.
In recent years, the number of special purpose
acquisition companies that have been formed has increased substantially. Many companies have entered into Business Combinations with special
purpose acquisition companies, and there are still many special purpose acquisition companies seeking targets for their initial Business
Combination, as well as many additional special purpose acquisition companies currently in registration. As a result, at times, fewer
attractive targets may be available, and it may require more time, effort and resources to identify a suitable target for an initial Business
Combination.
In addition, because there are more special purpose
acquisition companies seeking to enter into an initial Business Combination with available targets, the competition for available targets
with attractive fundamentals or business models may increase, which could cause target companies to demand improved financial terms. Attractive
deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions or increases in
the cost of additional capital needed to close Business Combinations or operate targets post-Business Combination. This could increase
the cost of, delay or otherwise complicate or frustrate our ability to find a suitable target for and/or complete our initial Business
Combination.
If the funds not being held in the Trust
Account are insufficient to allow us to operate for at least the 18 months following the closing of the Initial Public Offering, we may
be unable to complete our initial business combination.
The funds available to us outside of the Trust
Account may not be sufficient to allow us to operate for at least the 18 months following the closing of our Initial Public Offering,
assuming that our initial business combination is not completed during that time. We expect to incur significant costs in pursuit of our
acquisition plans. Management’s plans to address this need for capital through potential loans from certain of our affiliates are
discussed in “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations.” However,
our affiliates are not obligated to make loans to us in the future, and we may not be able to raise additional financing from unaffiliated
parties necessary to fund our expenses.
Of the funds available to us, we could use a portion
of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion
of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target
businesses from “shopping” around for transactions with other companies 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 have not completed our initial business combination within the required
time period, our public shareholders may receive only approximately $10.00 per 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 share”
and other risk factors herein.
Changes in the market for directors and
officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination.
In recent months, the market for directors and
officers liability insurance for special purpose acquisition companies has changed in ways adverse to us and our management team. Fewer
insurance companies are offering quotes for directors and officers liability coverage, the premiums charged for such policies have generally
increased and the terms of such policies have generally become less favorable. These trends may continue into the future.
The increased cost and decreased availability
of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial
business combination. In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public
company, the post-business combination entity might need to incur greater expense and/or accept less favorable terms. Furthermore, any
failure to obtain adequate directors and officers liability insurance could have an adverse impact on the post-business combination’s
ability to attract and retain qualified officers and directors.
In addition, after completion of any initial business
combination, our directors and officers could be subject to potential liability from claims arising from conduct alleged to have occurred
prior to such initial business combination. As a result, in order to protect our directors and officers, the post-business combination
entity may need to purchase additional insurance with respect to any such claims (“run-off insurance”). The need for run-off
insurance would be an added expense for the post-business combination entity and could interfere with or frustrate our ability to consummate
an initial business combination on terms favorable to our investors.
If 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 share.
Our placing of funds in the Trust Account may
not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our
independent auditors), 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 enter into an agreement
with a third party that has not executed a waiver only if management believes that such third party’s engagement would be significantly
more beneficial to us than any alternative.
Examples of possible instances where we may engage
a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills
are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases
where we are unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will
agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with
us and will not seek recourse against the Trust Account for any reason. Upon redemption of our public shares, if we have not completed
our initial business combination within the required time period, or upon the exercise of a redemption right in connection with our initial
business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against
us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public shareholders could be less
than the $10.00 per public share initially held in the Trust Account, due to claims of such creditors.
Our sponsor has agreed that it will be liable
to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to
us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in
the Trust Account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the Trust Account
as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest
which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access
to the Trust Account and except as to any claims under our indemnity of the underwriters of the Initial Public Offering against certain
liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable
against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently
verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets
are securities of our company. Our sponsor may not have sufficient funds available to satisfy those obligations. We have not asked our
sponsor to reserve for such obligations, and therefore, no funds are currently set aside to cover any such obligations. As a result,
if any such claims were successfully made against the Trust Account, the funds available for our initial business combination and redemptions
could be reduced to less than $10.00 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 directors or
officers 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 (1) $10.00 per public share or (2) such lesser amount per public share held in the Trust Account
as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest
which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification
obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor
to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf
against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their
business judgment may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification
obligations, the amount of funds in the Trust Account available for distribution to our public shareholders may be reduced below $10.00
per share.
The securities in which we invest the funds
held in the Trust Account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the
per-share redemption amount received by public shareholders may be less than $10.00 per share.
The proceeds held in the Trust Account are invested
only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under
Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S.
government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent
years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal
Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we
are unable to complete our initial business combination or make certain amendments to our Amended and Restated Certificate of Incorporation,
our public shareholders are entitled to receive their pro-rata share of the proceeds held in the Trust Account, plus any interest income
not released to us, net of taxes payable. Negative interest rates could impact the per-share redemption amount that may be received by
public shareholders.
If, after we distribute the proceeds in
the Trust Account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition
is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors
may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us
to claims of punitive damages.
If, after we distribute the proceeds in the Trust
Account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is
filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or
insolvency laws as a voidable preference. As a result, a liquidator 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
by paying public shareholders from the Trust Account prior to addressing the claims of creditors, thereby exposing itself and us to claims
of punitive damages.
If, before distributing the proceeds in
the Trust Account to our public shareholders, we file a winding-up petition or a 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 winding-up petition or a winding-up petition is filed against us that is not dismissed,
the proceeds held in the Trust Account could be subject to applicable insolvency law, and may be included in our liquidation estate and
subject to the claims of third parties with priority over the claims of our shareholders. To the extent any liquidation claims deplete
the Trust Account, the per-share amount that would otherwise be received by our shareholders in connection with our liquidation would
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:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities; each of which may make it difficult for us to complete our initial business combination.
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In addition, we may have imposed upon us burdensome
requirements, including:
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registration as an investment company with the SEC;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to.
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We do not believe that our anticipated principal
activities will subject us to the Investment Company Act. The proceeds held in the Trust Account may be invested by the trustee only in
U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting
certain conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the proceeds will be restricted to
these instruments, we believe we will meet the requirements for the exemption provided in Rule 3a-1 promulgated under the Investment
Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would
require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination. If we
have not completed our initial business combination within the required time period, our public shareholders may receive only approximately
$10.00 per share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
Changes in laws or regulations, or a failure
to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial
business combination, and results of operations.
We are and will be 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,
our initial business combination may be contingent on our ability to comply with certain laws and regulations and any post-business combination
company may be subject to additional laws and regulations. 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 completed our initial business
combination within 18 months of the closing of our Initial Public Offering or during any Extension Period, our public shareholders may
be forced to wait beyond such 18 months before redemption from our Trust Account.
If we have not completed our initial business
combination within 18 months from the closing of our Initial Public Offering or during any Extension Period, we will distribute the aggregate
amount then on deposit in the Trust Account, including interest (less up to $100,000 of interest to pay dissolution expenses and which
interest shall be net of taxes payable), pro rata to our public shareholders by way of redemption and cease all operations except for
the purposes of winding up of our affairs, as further described herein. Any redemption of public shareholders from the Trust Account shall
be effected automatically by function of our amended and restated memorandum and articles of association prior to any voluntary winding
up. If we are required to windup, liquidate the Trust Account and distribute such amount therein, pro rata, to our public shareholders,
as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies
Act. In that case, investors may be forced to wait beyond the initial 18 months before the redemption proceeds of our Trust Account become
available to them and they receive the return of their pro rata portion of the proceeds from our Trust Account. We have no obligation
to return funds to investors prior to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business
combination or amend certain provisions of our amended and restated memorandum and articles of association and then only in cases where
investors have properly sought to redeem their Class A ordinary shares. Only upon our redemption or any liquidation will public shareholders
be entitled to distributions if we have not completed our initial business combination within the required time period and do not amend
certain provisions of our amended and restated memorandum and articles of association prior thereto.
Our shareholders may be held liable for
claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an insolvent liquidation,
any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date
on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result,
a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors may be viewed as having
breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, and thereby exposing themselves and our company
to claims, by paying public shareholders from the Trust Account prior to addressing the claims of creditors. We cannot assure you that
claims will not be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized or
permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the
ordinary course of business would be guilty of an offense and may be liable for a fine of up to approximately $18,300 and to imprisonment
for up to 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 Nasdaq corporate governance
requirements, we are not required to hold an annual general meeting until one year after our fiscal year end following our listing on
Nasdaq. There is no requirement under the Companies Act for us to hold annual or extraordinary general meetings to appoint directors.
Until we hold an annual general meeting, public shareholders may not be afforded the opportunity to discuss company affairs with management.
The grant of registration rights to our
initial shareholders and their permitted transferees 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.
At or after the time of our initial business combination,
our initial shareholders and their permitted transferees can demand that we register the resale of their founder shares after those shares
convert to our Class A ordinary shares. In addition, our sponsor and its permitted transferees can demand that we register the resale
of the private placement warrants and the Class A ordinary shares issuable upon exercise of the private placement warrants, and holders
of warrants that may be issued upon conversion of working capital loans may demand that we register the resale of such warrants or the
Class A ordinary shares issuable upon exercise of such warrants. We will bear the cost of registering these securities. The registration
and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market
price of our Class A ordinary shares. In addition, the existence of the registration rights may make our initial business combination
more costly or difficult to conclude. This is because the shareholders of the target business may increase the equity stake they seek
in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A ordinary
shares that is expected when the ordinary shares owned by our initial shareholders or their permitted transferees, our private placement
warrants or warrants issued in connection with working capital loans are registered for resale.
Because we are not limited to a particular
industry, sector or geographic area or any specific target businesses with which to pursue our initial business combination, you will
be unable to ascertain the merits or risks of any particular target business’s operations.
We may seek to complete a business combination
with an operating company of any size (subject to our satisfaction of the 80% fair market value test) and in any industry, sector or geographic
area. However, 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. 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 development stage entity. Although our directors and
officers 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 securities will not ultimately prove to be less favorable to our
investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any shareholder
or warrant holder who chooses to remain a shareholder or warrant holder, respectively, following our initial business combination could
suffer a reduction in the value of their securities. Such shareholders and warrant holders are unlikely to have a remedy for such reduction
in value.
We may seek acquisition opportunities in
industries outside of our management’s areas of expertise.
We will consider a business combination in industries
outside of our management’s areas of expertise, if a business combination candidate is presented to us and we determine that such
candidate offers an attractive acquisition opportunity for our company. In the event we elect to pursue an acquisition outside of the
areas of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operation,
and 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 relevant to such acquisition. Accordingly,
any shareholder or warrant holder who chooses to remain a shareholder or warrant holder, respectively, following our initial business
combination could suffer a reduction in the value of their securities. Such shareholders and warrant holders are unlikely to have a remedy
for such reduction in value.
Although we have identified general criteria
and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination
with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial
business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria and
guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business
combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not
meet some or all of these criteria and guidelines, such combination may not be as successful as a combination with a business that does
meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does
not meet our general criteria and guidelines, a greater number of 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 completed
our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per share,
or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
We may seek acquisition opportunities with
an early stage company, a financially unstable business or an entity lacking an established record of revenue or earnings.
To the extent we complete our initial business
combination with an early stage company, a financially unstable business or an entity lacking an established record of sales or earnings,
we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include investing in
a business without a proven business model and with limited historical financial data, volatile revenues or earnings, intense competition
and difficulties in obtaining and retaining key personnel. Although our directors and officers will endeavor to evaluate the risks inherent
in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not
have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability
to control or reduce the chances that those risks will adversely impact a target business.
We are not required to obtain an opinion
from an independent investment banking firm or from an independent accounting firm regarding fairness. Consequently, you may have no assurance
from an independent source that the price we are paying for the business is fair to our company from a financial point of view.
Unless we complete our initial business combination
with an affiliated entity, we are not required to obtain an opinion that the price we are paying is fair to our company from a financial
point of view. If no opinion is obtained, our shareholders will be relying on the judgment of our board of directors, who will determine
fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our tender
offer documents or proxy solicitation materials, as applicable, related to our initial business combination.
We may issue additional Class A ordinary
shares or preferred shares to complete our initial business combination or under an employee incentive plan after completion of our initial
business combination. We may also issue Class A ordinary shares upon the conversion of the Class B ordinary shares at a ratio
greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended
and restated memorandum and articles of association. Any such issuances would dilute the interest of our shareholders and likely present
other risks.
Our amended and restated memorandum and articles
of association authorizes 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 undesignated preferred shares, par value $0.0001 per share. As of December 31,
2020, there were 41,100,000 and 5,750,000 authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively,
available for issuance, which amount takes into account shares reserved for issuance upon exercise of outstanding warrants but not upon
conversion of the Class B ordinary shares. Class B ordinary shares are convertible into Class A ordinary shares, initially
at a one-for-one ratio but subject to adjustment as set forth herein. As of December 31, 2020, there were no preferred shares issued
and outstanding.
We may issue a substantial number of additional
Class A ordinary shares, and may issue preferred shares, in order to complete our initial business combination or under an employee
incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares upon conversion of
the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the
anti-dilution provisions contained in our amended and restated memorandum and articles of association. However, our amended and restated
memorandum and articles of association provide, among other things, that prior to our initial business combination, we may not issue additional
ordinary shares that would entitle the holders thereof to (1) receive funds from the Trust Account or (2) vote as a class with
our public shares on any initial business combination. The issuance of additional ordinary shares or preferred shares:
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may significantly dilute the equity interest of investors in the Initial Public Offering, which dilution would increase if the anti-dilution provisions in the Class B 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 ordinary shares if preferred shares are issued with rights senior to those afforded our ordinary shares;
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could cause a change of control if a substantial number of our ordinary shares is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present directors and officers;
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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, 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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Our initial business combination or reincorporation
may result in taxes imposed on shareholders or warrant holders.
We may, subject to requisite shareholder approval
by special resolution under the Companies Act, effect a business combination with a target company in another jurisdiction, reincorporate
in the jurisdiction in which the target company or business is located, or reincorporate in another jurisdiction. Such transactions may
result in tax liability for a shareholder or warrant holder 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), in which the target company is located, or in which we reincorporate.
In the event of a reincorporation pursuant to our initial business combination, such tax liability may attach prior to any consummation
of redemptions. We do not intend to make any cash distributions to pay such taxes.
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 completed our initial business combination within the required time period, our public shareholders may receive
only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation of our Trust Account and our
warrants will expire worthless.
We anticipate that the investigation of each specific
target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require
substantial management time and attention and substantial costs for accountants, attorneys 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 completed
our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per share,
or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
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, directors or officers
which may raise potential conflicts of interest.
In light of the involvement of our sponsor, directors
and officers with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, directors and officers.
Certain of our directors and officers also serve as officers and/or board members for other entities, including those described under
“Item 10. Director, Executive Officer and Corporate Governance — Conflicts of Interest.” Such entities
may compete with us for business combination opportunities. 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 that we, or a committee of independent and disinterested directors, will obtain an opinion from an independent investment banking
firm that is a member of FINRA or from an independent accounting firm, regarding the fairness to our company from a financial point of
view of a business combination with one or more domestic or international businesses affiliated with our Sponsor, directors or officers,
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 initial shareholders will lose
their entire investment in us if our initial business combination is not completed, a conflict of interest may arise in determining whether
a particular business combination target is appropriate for our initial business combination.
Our initial shareholders hold 5,750,000 founder
shares as of the date of this Annual Report, including 5,595,000 held by our Sponsor. The founder shares will be worthless if we do not
complete an initial Business Combination. In addition, our Sponsor purchased an aggregate of 6,600,000 Private Placement Warrants, each
exercisable for one Class A ordinary share, for a purchase price of $6.6 million in the aggregate, or $1.00 per warrant, that will
also be worthless if we do not complete a Business Combination. Each Private Placement Warrant may be exercised for one Class A ordinary
share at a price of $11.50 per share, subject to adjustment as provided herein.
The founder shares are identical to the ordinary
shares included in the Units sold in the Initial Public Offering except that: (1) the founder shares are subject to certain transfer
restrictions; (2) our initial shareholders, directors and officers have entered into a letter agreement with us, pursuant to which
they have agreed to waive: (i) their redemption rights with respect to any founder shares and public shares held by them, as applicable,
in connection with the completion of our initial business combination; (ii) their redemption rights with respect to any founder shares
and public shares held by them 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 allow redemption 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 18 months from the closing of the Initial
Public Offering or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination
activity; and (iii) their rights to liquidating distributions from the Trust Account with respect to any founder shares they hold
if we fail to complete our initial business combination within 18 months from the closing of the Initial Public Offering or during any
Extension Period (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); (3) the founder shares will
automatically convert into our Class A ordinary shares at the time of our initial business combination, or earlier at the option
of the holder, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described in more detail below;
and (4) the founder shares are entitled to registration rights. If we submit our initial business combination to our public shareholders
for a vote, our initial shareholders have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement
entered into with us, to vote their founder shares and any public shares held by them purchased during or after the Initial Public Offering
in favor of our initial business combination.
The personal and financial interests of our Sponsor,
directors and officers may influence their motivation in identifying and selecting a target business combination, completing an initial
business combination and influencing the operation of the business following the initial business combination. This risk may become more
acute as the 18-month deadline following the closing of our Initial Public Offering nears, which is the deadline for the completion of
our 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.
We may choose to incur substantial debt to complete
our initial business combination. We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver
of any right, title, interest or claim of any kind in or to the monies held in the Trust Account. As such, no issuance of debt will affect
the per-share amount available for redemption from the Trust Account. Nevertheless, the incurrence of debt could have a variety of negative
effects, including:
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default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
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our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
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our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
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our inability to pay dividends on our ordinary shares;
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
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We may be able to complete only one business
combination with the proceeds of the Initial Public Offering and Private Placement, 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.
We may effectuate our initial business combination
with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able
to effectuate our initial business combination with more than one target business because of various factors, including the existence
of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating
results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial
business combination with only a single entity our lack of diversification may subject us to numerous economic, competitive and regulatory
risks. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses,
unlike other entities which may have the resources to complete several business combinations in different industries or different areas
of a single industry. Accordingly, the prospects for our success may be:
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solely dependent upon the performance of a single business, property or asset; or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
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This lack of diversification may subject us to
numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry
in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete
business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and
give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several
businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent
on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete
our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens
and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional
risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating
business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial business
combination with a private company about which little information is available, which may result in a business combination with a company
that is not as profitable as we suspected, if at all.
In pursuing our acquisition strategy, we may seek
to effectuate our initial business combination with a privately held company. Very little public information generally exists about private
companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of
limited information, which may result in a business combination with a company that is not as profitable as we suspected, if at all.
We do not have a specified maximum redemption
threshold. The absence of such a redemption threshold may make it possible for us to complete a business combination with which a substantial
majority of our shareholders do not agree.
Our amended and restated memorandum and articles
of association do not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an
amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions, or any greater net tangible asset
or cash requirement that may be contained in the agreement relating to our initial business combination. As a result, we may be able
to complete our initial business combination even though a substantial majority of our public shareholders do not agree with the transaction
and have redeemed their shares or, if we seek shareholder approval of our initial business combination and do not conduct redemptions
in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements
to sell their shares to our sponsor, directors, officers, advisors or any of their respective affiliates. In the event the aggregate
cash consideration we would be required to pay for all public 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 ordinary shares submitted for redemption will be returned
to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial business
combination, blank check companies have, in the past, amended various provisions of their charters and modified governing instruments,
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
some of our shareholders may not support.
In order to effectuate an initial business combination,
blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments, including
their warrant agreements. For example, blank check companies have amended the definition of business combination, increased redemption
thresholds and extended the time to consummate an initial business combination and, with respect to their warrants, amended their warrant
agreements to require the warrants to be exchanged for cash and/or other securities. Amending our amended and restated memorandum and
articles of association requires at least a special resolution of our shareholders as a matter of Cayman Islands law. A resolution is
deemed to be a special resolution as a matter of Cayman Islands law where it has been approved by either (1) holders of at least
two-thirds (or any higher threshold specified in a company’s articles of association) of a company’s ordinary shares at a
general meeting for which notice specifying the intention to propose the resolution as a special resolution has been given or (2) if
so authorized by a company’s articles of association, by a unanimous written resolution of all of the company’s shareholders.
Our amended and restated memorandum and articles of association provide that special resolutions must be approved either by holders of
at least two-thirds of our ordinary shares who attend and vote in person or by proxy at a general meeting (i.e., the lowest threshold
permissible under Cayman Islands law), or by a unanimous written resolution of all of our shareholders. The warrant agreement provides
that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision,
but requires the approval by the holders of at least 65% of the then issued and outstanding public warrants to make any change that adversely
affects the interests of the registered holders of 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, 65% of the number of the
then outstanding private placement warrants. We cannot assure you that we will not seek to amend our amended and restated memorandum and
articles of association or governing instruments, including the warrant agreement, or extend the time to consummate an initial business
combination in order to effectuate our initial business combination. 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.
Certain provisions of our amended and restated
memorandum and articles of association that relate to our pre-business combination activity (and corresponding provisions of the agreement
governing the release of funds from our Trust Account) may be amended with the approval of holders of at least two-thirds of our ordinary
shares who attend and vote in person or by proxy at a quorate general meeting, which is a lower amendment threshold than that of some
other blank check companies. It may be easier for us, therefore, to amend our amended and restated memorandum and articles of association
and the trust agreement to facilitate the completion of an initial business combination that some of our shareholders may not support.
Some other blank check companies have a provision
in their charter which prohibits the amendment of certain of its provisions, including those which relate to a company’s pre-business
combination activity, without approval by holders of a certain percentage of the company’s shares. In those companies, amendment
of these provisions typically requires approval by holders holding between 90% and 100% of the company’s public shares. Our amended
and restated memorandum and articles of association provide that any of its provisions, including those related to pre-business combination
activity (including the requirement to deposit proceeds of the Initial Public Offering and Private Placement into the Trust Account and
not release such amounts except in specified circumstances), may be amended if approved by holders of at least two-thirds of our ordinary
shares who attend and vote in person or by proxy at a general meeting, and corresponding provisions of the trust agreement governing
the release of funds from our Trust Account may be amended if approved by holders of 65% of our ordinary shares. Our initial shareholders,
who collectively beneficially own 20% of our ordinary shares, may 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 our initial business combination
with which you do not agree. In certain circumstances, our shareholders may pursue remedies against us for any breach of our amended
and restated memorandum and articles of association.
We may 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 the net proceeds of the Initial Public Offering
and the sale of the private placement warrants available to us prove to be insufficient, either because of the size of our initial business
combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant
number of shares from shareholders who elect redemption in connection with our initial business combination or the terms of negotiated
transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or
to abandon the proposed business combination. We cannot assure you that such financing will be available on acceptable terms, if at all.
To the extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be
compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business
candidate.
In addition, even if we do not need additional
financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business.
The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business.
None of our directors, officers or shareholders is required to provide any financing to us in connection with or after our initial business
combination. If we have not completed our initial business combination within the required time period, our public shareholders may receive
only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our Trust Account, and our warrants will
expire worthless.
Our initial shareholders hold a substantial
interest in us. As a result, they may exert a substantial influence on actions requiring shareholder vote, potentially in a manner that
you do not support.
Our initial shareholders own 20% of our issued
and outstanding ordinary shares. In addition, as a result of their substantial ownership in our company, our initial shareholders may
exert a substantial influence on other actions requiring a shareholder vote, potentially in a manner that you do not support, including
appointment of directors, amendments to our amended and restated memorandum and articles of association and approval of major corporate
transactions. If our initial shareholders purchase any Class A ordinary shares in the aftermarket or in privately negotiated transactions,
this would increase their influence over these actions. In addition, we may not hold an annual meeting of shareholders to elect new directors
prior to the completion of our initial business combination, in which case all of the current directors will continue in office until
at least the completion of our initial business combination. Accordingly, our initial shareholders will exert significant influence over
actions requiring a shareholder vote at least until the completion of our initial business combination.
A provision of our warrant agreement may
make it more difficult for us to consummate an initial business combination.
Unlike some blank check companies, if
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we issue additional ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial business combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any founder shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”),
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the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the completion of our initial business combination (net of redemptions), and
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the volume weighted average trading price of our Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.20 per share,
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then the exercise price of the warrants will be
adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger
price applicable to our warrants will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the
Newly Issued Price. This may make it more difficult for us to consummate an initial business combination with a target business.
Our warrants and founder shares may have
an adverse effect on the market price of our Class A ordinary shares and make it more difficult to effectuate our initial business
combination.
We have issued warrants to purchase 11,500,000
Class A ordinary shares at a price of $11.50 per whole share (subject to adjustment as provided herein), as part of the Units and,
simultaneously with the closing of the Initial Public Offering, we issued in the Private Placement an aggregate of 6,600,000 private placement
warrants, each exercisable to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as provided
herein. Our initial shareholders currently hold 5,750,000 Class B ordinary shares. The Class B ordinary shares are convertible
into Class A ordinary shares on a one-for-one basis, subject to adjustment as set forth herein. In addition, if our Sponsor, an affiliate
of our sponsor or certain of our directors and officers make any working capital loans, up to 1,500,000 of such loans may be converted
into warrants, at the price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement
warrants. To the extent we issue Class A ordinary shares to effectuate a business combination, the potential for the issuance of
a substantial number of additional Class A ordinary shares upon exercise of these warrants or conversion rights could make us a less
attractive acquisition vehicle to a target business. Any such issuance will increase the number of issued and outstanding Class A
ordinary shares and reduce the value of the Class A ordinary shares issued to complete the business combination. Therefore, our warrants
and founder shares may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business.
The private placement warrants are identical to
the warrants sold as part of the Units, except that, so long as they are held by our Sponsor or its permitted transferees: (1) they
will not be redeemable by us; (2) they (including the Class A ordinary shares issuable upon exercise of these warrants) may
not, subject to certain limited exceptions, be transferred, assigned or sold by our Sponsor until 30 days after the completion of our
initial business combination; (3) they may be exercised by the holders on a cashless basis; and (4) they (including the ordinary
shares issuable upon exercise of these warrants) are entitled to registration rights.
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 (“U.S.
GAAP”), or international financial reporting standards as issued by the International Accounting Standards Board (“IFRS”),
depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards
of the Public Company Accounting Oversight Board (United States) (“PCAOB”). These financial statement requirements may limit
the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time
for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination
within the prescribed time frame.
Compliance obligations under the Sarbanes-Oxley
Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources,
and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act requires
that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending
December 31, 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 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.
If our management team pursues a 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 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 our management team pursues 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 market, 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 how relevant governments respond to such factors), including any of the following:
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costs and difficulties inherent in managing cross-border business operations and complying with commercial and legal requirements of overseas markets;
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rules and regulations regarding currency redemption;
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complex corporate withholding taxes on individuals;
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laws governing the manner in which future business combinations may be effected;
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tariffs and trade barriers;
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regulations related to customs and import/export matters;
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tax consequences, such as tax law changes, including termination or reduction of tax and other incentives that the applicable government provides to domestic companies, and variations in tax laws as compared to the United States;
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currency fluctuations and exchange controls, including devaluations and other exchange rate movements;
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rates of inflation, price instability and interest rate fluctuations;
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liquidity of domestic capital and lending markets;
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challenges in collecting accounts receivable;
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cultural and language differences;
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employment regulations;
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crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters, wars and other forms of social instability;
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deterioration of political relations with the United States;
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obligatory military service by personnel; and
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government appropriation of assets.
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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 combination or, if we complete such combination, our
operations might suffer, either of which may adversely impact our results of operations and financial condition.
Risks Relating to the Post-Business Combination
Company
We may face risks related to companies in
the technology industries.
Business combinations with companies in the technology
industries entail special considerations and risks. If we are successful in completing a business combination with such a target business,
we may be subject to, and possibly adversely affected by, the following risks:
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an inability to compete effectively in a highly competitive environment with many incumbents having substantially greater resources;
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an inability to manage rapid change, increasing customer expectations and growth; an inability to build strong brand identity and improve subscriber or customer satisfaction and loyalty;
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a reliance on proprietary technology to provide services and to manage our operations, and the failure of this technology to operate effectively, or our failure to use such technology effectively;
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an inability to deal with our subscribers’ or customers’ privacy concerns;
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an inability to attract and retain subscribers or customers;
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an inability to license or enforce intellectual property rights on which our business may depend;
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any significant disruption in our computer systems or those of third parties that we may utilize or rely on in our operations;
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an inability by us, or a refusal by third parties, to license content to us upon acceptable terms;
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potential liability for negligence, copyright, or trademark infringement or other claims based on the nature and content of materials that we may distribute;
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competition for advertising revenue;
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competition for the leisure and entertainment time and discretionary spending of subscribers or customers, which may intensify in part due to advances in technology and changes in consumer expectations and behavior;
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disruption or failure of our networks, systems or technology as a result of computer viruses, “cyber-attacks,” misappropriation of data or other malfeasance, as well as outages, natural disasters, terrorist attacks, accidental releases of information or similar events;
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an inability to obtain necessary hardware, software and operational support; and
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reliance on third-party vendors or service providers.
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Any of the foregoing could have an adverse impact
on our operations following a business combination. However, our efforts in identifying prospective target businesses will not be limited
to the technology industries. Accordingly, if we acquire a target business in another industry, these risks we will be subject to risks
attendant with the specific industry in which we operate or target business which we acquire, which may or may not be different than
those risks listed above. For risk factors related to the proposed Achronix Business Combination, see the “Risk Factors”
section of the Achronix Disclosure Statement that we filed with the SEC.
Subsequent to our completion of our initial
business combination, we may be required to subsequently 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 that may be present
with a particular target business that it would be possible to uncover all material issues through a customary amount of due diligence,
or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be
forced to later write down or write off assets, restructure our operations, or incur impairment or other charges that could result in
our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known
risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and
not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions
about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be
subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing.
Accordingly, any shareholder or warrant holder who chooses to remain a shareholder or warrant holder, respectively, following our initial
business combination could suffer a reduction in the value of their securities. Such shareholders and warrant holders are unlikely to
have a remedy for such reduction in value.
After our initial business combination,
our results of operations and prospects could be subject, to a significant extent, to the economic, political, social and government policies,
developments and conditions in the country in which we operate.
The economic, political and social conditions,
as well as government policies, of the country in which our operations are located could affect our business. Economic growth could be
uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future. If in the future
such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in
certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find
an attractive target business with which to consummate our initial business combination and if we effect our initial business combination,
the ability of that target business to become profitable.
Our management may not be able to maintain
control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target
business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination
so that the post-transaction company in which our public shareholders own shares will own less than 100% of the equity interests or assets
of a target business, but we will complete such business combination only if the post-transaction company owns or acquires 50% or more
of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient
for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction
that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our 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 our initial business combination transaction. For example, we could pursue a transaction
in which we issue a substantial number of new ordinary shares in exchange for all of the issued and outstanding capital stock, shares
or other equity securities of a target, or issue a substantial number of new shares to third-parties in connection with financing our
initial business combination. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a
substantial number of new ordinary shares, our shareholders immediately prior to such transaction could own less than a majority of our
issued and outstanding ordinary shares subsequent to such transaction. In addition, other minority shareholders may subsequently combine
their holdings resulting in a single person or group obtaining a larger share of the company’s shares than we initially acquired.
Accordingly, this may make it more likely that our management will not be able to maintain our control of the target business.
We may have 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’s management, therefore,
may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s
management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability
of the post-combination business may be negatively impacted. Accordingly, any shareholder or warrant holder who chooses to remain a shareholder
or warrant holder, respectively, following our initial business combination could suffer a reduction in the value of their securities.
Such shareholders and warrant holders are unlikely to have a remedy for such reduction in value.
The directors and officers of an acquisition
candidate may resign upon completion of our initial business combination. The departure of a business combination target’s key
personnel could negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s
key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that
certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our
initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
After our initial business combination,
it is possible that a majority of our directors and officers will live outside the United States and all or substantially 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 or substantially all of our assets
will be located outside of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United
States to enforce their legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United
States courts predicated upon civil liabilities and criminal penalties on our directors and officers under United States laws.
If our management following our initial
business combination is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws,
which could lead to various regulatory issues.
Following our initial business combination, any
or all of our management could resign from their positions as officers of the company, and the management of the target business at the
time of the business combination could remain in place. Management of the target business may not be familiar with U.S. securities laws.
If new management is unfamiliar with U.S. 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.
Risks Relating to Our Management Team
We are dependent upon our directors and
officers and their departure could adversely affect our ability to operate.
Our operations are dependent upon a relatively
small group of individuals and in particular, Behrooz Abdi, our Chief Executive Officer and Chairman of the board of directors, Dr. Sunny
Siu, our President and one of our directors, and Denis Tse, our Secretary and one of our directors. We believe that our success depends
on the continued service of our directors and officers, at least until we have completed our initial business combination. In addition,
our directors and officers are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts
of interest in allocating 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 officers.
The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.
Our ability to successfully effect our initial
business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us
following our initial business combination. The loss of our or a target’s key personnel could negatively impact the operations and
profitability of our post-combination business.
Our ability to successfully effect our initial
business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however,
cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory
positions following our initial business combination, it is likely that some or all of the management of the target business will remain
in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you
that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating
a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
In addition, the directors and officers of an
acquisition candidate may resign upon completion of our initial business combination. The departure of a business combination target’s
key personnel could negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s
key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that
certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our
initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
Our key personnel may negotiate employment
or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for
them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest
in determining whether a particular business combination is the most advantageous.
Our key personnel may be able to remain with the
company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements
in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination
and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would
render to us after the completion of our initial business combination. The personal and financial interests of such individuals may influence
their motivation in identifying and selecting a target business, subject to his or her fiduciary duties under Cayman Islands law. However,
we believe the ability of such individuals to remain with us after the completion of our initial business combination will not be the
determining factor in our decision as to whether or not we will proceed with any potential business combination. There is no certainty,
however, that any of our key personnel will remain with us after the completion of our initial business combination. We cannot assure
you that any of our key personnel will remain in senior management or advisory positions with us. The determination as to whether any
of our key personnel will remain with us will be made at the time of our initial business combination.
Certain of our directors and officers are
now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be
conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should
be presented.
Until we consummate our initial business combination,
we intend to engage in the business of identifying and combining with one or more businesses. Our Sponsor and directors and officers are,
or may in the future become, affiliated with entities that are engaged in a similar business, although they may not participate in the
formation of, or become an officer or director of, any other special purpose acquisition companies with a class of securities registered
under the Exchange Act until we have entered into a definitive agreement regarding our initial business combination or we have failed
to complete our initial business combination within 18 months after the closing of the Initial Public Offering.
Our directors and officers also may become aware
of business opportunities which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary or
contractual duties or otherwise have an interest in, including any other special purpose acquisition company in which they may become
involved with. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should
be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to other entities prior
to its presentation to us, subject to his or her fiduciary duties under Cayman Islands law. Our amended and restated memorandum and articles
of association provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity
is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity that
we are able to complete on a reasonable basis.
For a complete discussion of our officers’
and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see “Item
10. Directors, Executive Officer and Corporate Governance,” “Item 10. Directors, Executive Officer and Corporate Governance—Conflicts
of Interest” and “Item 13—Certain Relationships and Related Party Transactions—Support Services Agreement.”
Our directors, officers, security holders
and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits
our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment
to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business
combination with a target business that is affiliated with our sponsor, our directors or officers. Nor do we have a policy that expressly
prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such
persons or entities may have a conflict between their interests and ours.
In particular, affiliates of our Sponsor have
invested in the technology industry, including in several software companies. As a result, there may be substantial overlap between companies
that would be a suitable business combination for us and companies that would make an attractive target for such other affiliates.
Risks Relating to Our Securities
You will not have any rights or interests
in funds from the Trust Account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced
to sell your public shares and/or warrants, potentially at a loss.
Our public shareholders will be entitled to receive
funds from the Trust Account only upon the earliest to occur of: (1) 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; (2) the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended
and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in
connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination
within 18 months from the closing of the Initial Public Offering or (B) with respect to any other provision relating to shareholders’
rights or pre-initial business combination activity; and (3) the redemption of our public shares if we have not completed an initial
business combination within 18 months from the closing of the Initial Public Offering, subject to applicable law. In no other circumstances
will a shareholder have any right or interest of any kind to or in the Trust Account. 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 and/or warrants, potentially at a loss.
Nasdaq may delist our securities from trading
on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading
restrictions.
We cannot assure you that our securities will
continue to be listed on Nasdaq in the future or prior to our initial business combination. In order to continue listing our securities
on Nasdaq prior to our initial business combination, we must maintain certain financial, distribution and share price levels. In general,
we must maintain a minimum amount in shareholders’ equity (generally $2,500,000) and a minimum of 300 public shareholders. Additionally,
in connection with our initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial listing
requirements, which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing
of our securities on Nasdaq. We cannot assure you that we will be able to meet those initial listing requirements at that time.
If Nasdaq delists any of our securities from trading
on its exchange and we are not able to list our securities on another national securities exchange, we expect such securities could be
quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
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a limited availability of market quotations for our securities;
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reduced liquidity for our securities;
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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;
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a limited amount of news and analyst coverage; and
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a decreased ability to issue additional securities or obtain additional financing in the future.
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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.” Our Units, Class A ordinary shares and warrants currently qualify as covered securities
under such statute. Although the states are preempted from regulating the sale of covered securities, the federal statute does allow
the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states
can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to
prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities
regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of
securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not qualify
as covered securities under such statute and we would be subject to regulation in each state in which we offer our securities.
You will not be permitted to exercise your
warrants unless we register and qualify the issuance of the underlying Class A ordinary shares or certain exemptions are available.
Under the terms of the warrant agreement, we have
agreed that, as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination,
we will use our 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. 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. 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 that were included
as part of Units sold in the Initial Public Offering. In such an instance, our Sponsor and its permitted transferees (which may include
our directors and executive officers) would be able to exercise their private placement warrants and sell the ordinary shares underlying
such 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.
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 65% 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 in the prospectus related to the Initial Public Offering, or defective provision or (ii) 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 interest of the registered holders of the warrants,
provided that the approval by the holders of at least 65% 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 65% 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, 65% 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 65% 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.
We may redeem unexpired warrants prior to
their exercise at a time that is disadvantageous to the warrant holders, thereby making such warrants worthless.
We have the ability to redeem the outstanding
warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant if, among other things,
the last reported sale price of Class A ordinary shares for any 20 trading days within a 30-trading day period ending on the third
trading day prior to the date on which the Company sends the notice of redemption to the warrant holders (the “Reference Value”)
equals or exceeds $18.00 per share (as adjusted). 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 as described above could force you to: (1) exercise your warrants and pay the exercise price therefor at a time when it
may be disadvantageous for you to do so; (2) sell your warrants at the then-current market price when you might otherwise wish to
hold your warrants; or (3) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption,
we expect would be substantially less than the market value of your warrants.
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 warrants
will trade. This is different from other offerings similar to ours whose units include one ordinary share and one whole warrant or
a greater fraction of one whole warrant to purchase one share. We have established the components of the units in this way in order
to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the
aggregate for a 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 business combination partner for target businesses. Nevertheless, this Unit structure may cause
our Units to be worth less than if they included one whole warrant or a greater fraction of one whole warrant to purchase one whole
share.
Because we are incorporated under the laws
of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S.
Federal courts may be limited.
We are an exempted company incorporated under
the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon
our directors or officers, or enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs will be governed by our
amended and restated memorandum and articles of association, the Companies Act (as the same may be supplemented or amended from time to
time) and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders
and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of
the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman
Islands as well as from English common law and other common law jurisdictions, 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 our Cayman Islands legal
counsel, that the courts of the Cayman Islands are unlikely (1) 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 (2) 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 contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best
interests. These provisions include two-year director terms and the ability of the board of directors to designate the terms of and issue
new series of preferred shares, which may make more difficult the removal of management and may discourage transactions that otherwise
could involve payment of a premium over prevailing market prices for our securities.
General Risk Factors
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 11,500,000 public warrants and 6,600,000 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.
We have identified
a material weakness 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 this issuance
of the SEC Statement, on May 4, 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.
A material weakness is
a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility
that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely
basis.
Effective internal controls
are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material
weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately
have the intended effects.
If we identify any new
material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement
of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case,
we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable
stock exchange listing requirements, investors may lose confidence in our financial reporting and our 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 have identified
a material weakness in our internal control over financial reporting. This material weakness could continue to adversely affect our ability
to report our results of operations and financial condition accurately and in a timely manner.
Our management and our
audit committee concluded that it was appropriate to restate previously issued financial statements as of and for the period ended December 31,
2020.
Our management is responsible
for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our
management is likewise required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes
and material weaknesses identified through such evaluation in those internal controls. 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 on a timely basis.
As described elsewhere
in this Amendment No. 2, we have identified a material weakness in our internal control over financial reporting related to the
Company’s application of ASC 480-10-S99-3A to its accounting classification of the Public Shares. As a result of this material
weakness, our management has concluded that our internal control over financial reporting was not effective as of December 31, 2020.
Historically, a portion of the Public Shares was classified as permanent equity to maintain stockholders’ equity greater than $5
million on the basis that the Company will not redeem its Public Shares in an amount that would cause its net tangible assets to be less
than $5,000,001, as described in the Charter. Pursuant to the Company’s re-evaluation of the Company’s application of ASC
480-10-S99-3A to its accounting classification of the Public Shares, the Company’s management has determined that the Public Shares
include certain provisions that require classification of all of the Public Shares as temporary equity regardless of the net tangible
assets redemption limitation contained in the Charter. For a discussion of management’s consideration of the material weakness
identified related to the Company’s application of ASC 480-10-S99-3A to its accounting classification of the Public Shares, see
“Note 2” to the accompanying financial statements, as well as Part II, Item 9A: Controls and Procedures included
in this Amendment No. 2.
The Company intends
to take steps to remediate this material weakness, including increasing the depth and experience within its accounting and finance organization,
as well as designing and implementing improved processes and internal controls. However, its efforts to remediate this material weakness
may not be effective or prevent any future material weakness or significant deficiency in the Company’s internal control over financial
reporting. If the Company’s efforts are not successful or other material weaknesses or control deficiencies occur in the future,
the Company may be unable to report its financial results accurately on a timely basis, which could cause the Company’s reported
financial results to be materially misstated and result in the loss of investor confidence and cause the market price of the Company’s
common stock to decline.
Efforts to remediate
this material weakness may not be effective or prevent any future material weakness or significant deficiency in the Company’s internal
control over financial reporting. If the Company’s efforts are not successful or other material weaknesses or control deficiencies
occur in the future, the Company may be unable to report its financial results accurately on a timely basis, which could cause the Company’s
reported financial results to be materially misstated and result in the loss of investor confidence and cause the market price of the
Company’s common stock to decline. Ineffective internal controls could also cause investors to lose confidence in the Company’s
reported financial information, which could have a negative effect on the trading price of its stock.
We can give no assurance
that the measures we have taken or that the Company plans to take in the future will remediate the material weakness identified or that
any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and
maintain adequate internal control over financial reporting or circumvention of these controls. The Company will be required, pursuant
to Section 404 of the Sarbanes-Oxley Act, to annually furnish a report by management on, among other things, the effectiveness of
its internal control over financial reporting. This assessment will need to include disclosure of any material weaknesses identified by
the Company’s management in its internal control over financial reporting. The Company’s independent registered public accounting
firm may be required to attest to the effectiveness of its internal control over financial reporting depending on the Company’s
reporting status. The Company will be required to disclose changes made in its internal control and procedures on a quarterly basis. To
comply with the requirements of being a public company, the Company may need to undertake various actions, such as implementing new internal
controls and procedures and hiring accounting or internal audit staff.
We may face litigation and other risks
as a result of the material weakness in our internal control over financial reporting.
Following the issuance
of the SEC Statement, our management and our audit committee concluded that it was appropriate to restate our previously issued audited
financial statements as of December 31, 2020 and for the period ended December 31, 2020. 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 the Restatement, we identified a material weakness in our internal controls over financial reporting.
Our management and our
audit committee also concluded that it was appropriate to restate previously issued financial statements as of and for the period ended
December 31, 2020 based on the classification of a portion of the Company’s Public Shares as temporary versus permanent equity.
See “—We have identified a material weakness in our internal control over financial reporting. This material weakness could
continue to adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner.”
As a result of such
material weaknesses, the Restatement, the change in accounting for the warrants, the change in the classification of all of the Public
Shares as temporary equity, 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 Restatement and material weaknesses in our internal control over financial reporting and the preparation of our
financial statements. As of the date of this Annual Report, we have no knowledge of any such litigation or dispute. However, we can provide
no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not,
could have a material adverse effect on our business, results of operations and financial condition or our ability to complete a Business
Combination.
We are a newly 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 newly incorporated company incorporated
under the laws of the Cayman Islands with no operating results. 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 may be unable to complete our initial business combination. If we fail to complete our initial business combination, we will never
generate any operating revenues.
Past performance by our management team
and their respective affiliates may not be indicative of future performance of an investment in the company.
Information regarding performance by our management
team and their respective affiliates is presented for informational purposes only. Past performance by our management team and their respective
affiliates is not a guarantee either (1) that we will be able to identify a suitable candidate for our initial business combination
or (2) of success with respect to any business combination we may consummate. You should not rely on the historical record of our
management team or their respective affiliates or any related investment’s performance as indicative of the future performance of
an investment in the company or the returns the company will, or is likely to, generate going forward.
We may be a passive foreign investment company,
or “PFIC,” which could result in adverse U.S. federal income tax consequences to U.S. investors.
If we are a PFIC for any taxable year (or portion
thereof) that is included in the holding period of a U.S. Holder of our ordinary shares or warrants, the U.S. Holder may be subject to
adverse U.S. federal income tax consequences and may be subject to additional reporting requirements. Our PFIC status for our taxable year
ended December 31, 2020, our current taxable year, and our subsequent taxable years may depend upon the status of an acquired company
pursuant to a business combination and 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 taxable year ended December 31,
2020, our current taxable year or any subsequent taxable year. Our actual PFIC status for any taxable year, moreover, will not be determinable
until after the end of such taxable year. If we determine we are a PFIC for any taxable year, 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 likely be unavailable with respect to our warrants in all cases.
We urge U.S. Holders to consult their own tax advisors regarding the possible application of the PFIC rules to holders of our ordinary
shares and warrants.
We are an emerging growth company 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 Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”),
and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that
are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports
and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder
approval of any golden parachute payments not previously approved. As a result, our shareholders may not have access to certain information
they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose
that status earlier, including if the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the
end of any second quarter of a fiscal year, in which case we would no longer be an emerging growth company as of the end of such fiscal
year. We cannot 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 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 equals or exceeds $250 million as of the end of that year’s second fiscal quarter, and (2) our annual
revenues equal or exceed $100 million during such completed fiscal year or the market value of our ordinary shares held by non-affiliates
equals or exceeds $700 million as of the end of that year’s second fiscal quarter. 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.