Introduction
We are a blank check company incorporated as a Cayman Islands exempted company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or
similar business combination with one or more businesses or entities, which we refer to throughout this Annual Report as our initial business combination. We have generated no operating revenues to date and we do not expect that we will generate
operating revenues until we consummate our initial business combination.
Company History
On October 18, 2021, we completed our initial public offering (“IPO”) of 14,375,000 units. Each unit (“Unit”) consists of one Class A ordinary share and one-half of one Warrant, with each Warrant
entitling the holder thereof to purchase one ordinary share for $11.50 per share. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $143,750,000.
Concurrent with the closing of the IPO, the Company completed the private sale of (i) an aggregate of 4,950,000 warrants (the “Sponsor Private Placement Warrants”) to Rose Hill Sponsor LLC at a
purchase price of $1.25 per Private Placement Warrant, generating gross proceeds to the Company of $6,187,500, and (ii) an aggregate of 345,000 warrants (the “CCM Private Placement Warrants”) to J.V.B. Financial Group, LLC at a purchase price of
$1.25 per Private Placement Warrant, generating gross proceeds to the Company of $431,250. In addition, simultaneously with the closing of the IPO, the Company completed the private sale of an aggregate of 805,000 warrants (the “UW Private
Placement Warrants” and together with the Sponsor Private Placement Warrants and the CCM Private Placement Warrants, the “Private Placement Warrants”) to Cantor at a purchase price of $1.25 per Private Placement Warrant, generating gross proceeds
to the Company of $1,006,250.
The Private Placement Warrants are identical to the Warrants sold in the IPO, except that the Private Placement Warrants are, so long as the Sponsor, J.V.B. Financial Group, LLC, or Cantor or their
permitted transferees hold such warrants, subject to certain transfer restrictions and the holders thereof are entitled to certain registration rights, and: (1) will not be redeemable by the Company (except as described in the Company’s IPO
prospectus filed with SEC on October 13, 2021); and (2) may be exercised by the holders on a cashless basis. No underwriting discounts or commissions were paid with respect to such sales. The issuance of the Private Placement Warrants were made
pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.
The proceeds from the IPO in the amount of $146,625,000 was placed in a U.S.-based trust account (the “Trust Account”) at J.P. Morgan Chase Bank, N.A., maintained by Continental Stock Transfer
& Trust Company, acting as trustee for the benefit of our public shareholders. Except with respect to interest earned on the funds in the Trust Account that may be released to the Company to pay its taxes, the funds held in the Trust Account
will not be released from the Trust Account until the earliest of (i) the completion of the Company’s initial business combination, (ii) the redemption of any Class A ordinary shares included in the Units sold in the IPO properly submitted in
connection with a shareholder vote to amend our amended and restated memorandum and articles of association to modify the substance or timing of the Company’s obligation to redeem 100% of the public shares if the Company does not complete its
initial business combination within 21 months from the closing of the IPO or such later date as approved by our shareholders, or with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination
activity, and (iii) the redemption of the public shares if the Company is unable to complete an initial business combination within 21 months from the closing of the IPO or such later date as approved by our shareholders, subject to applicable law.
On November 29, 2021, we announced that holders of the public Units may elect to separately trade the Class A ordinary shares and Warrants. Those Units not separated will continue to trade on The
Nasdaq Global Market (“Nasdaq”) under the symbol “ROSEU,” and the Class A ordinary shares and redeemable warrants that are separated will trade on the Nasdaq under the symbols “ROSE” and “ROSEW,” respectively.
Our IPO prospectus and amended and restated articles of association provided that we had until January 18, 2023 (the date which was 15 months after the consummation of the IPO) to complete an
initial business combination. As stated in the Current Report on Form 8-K filed with the SEC on January 13, 2023, an extraordinary general meeting was held on January 12, 2023 (“Extension Meeting”) where our shareholders approved a proposal to
amend our amended and restated articles of association (together with our amended and restated memorandum “Articles”) to extend the date by which we must consummate an initial business combination from January 18, 2023, to July 18, 2023 (the
“Extension Period”). In connection with the Extension Meeting, holders of the Class A ordinary shares were permitted to exercise their right to redeem their shares for a pro rata portion of the Trust Account. Shareholders holding 14,118,106 Class A
ordinary shares elected to have their shares redeemed leaving an aggregate of approximately $2.8 million in the Trust Account following the Extension Meeting.
Business Combination with Prize
Business Combination Agreement
On October 20, 2022, we entered into a Business Combination Agreement with Inversiones e Inmobilaria GHC Ltda, a limited liability company organized under the laws of Chile (“Prize”) and, for
certain limited purposes, Alejandro García Huidobro Empresario Individual (“AGH”) (as it may be amended and/or restated from time to time, the “Business Combination Agreement”), pursuant to which, and subject to the terms and conditions set forth
therein, prior to the consummation of the Business Combination (as defined below), (i) Prize will cause to be incorporated under the laws of the Cayman Islands, (a) an exempted company with limited liability to serve as “PubCo” for all purposes
under the Business Combination Agreement and (b) an exempted company with limited liability to serve as “Merger Sub” for all purposes under the Business Combination Agreement, (ii) Prize and AGH will cause to be incorporated under the laws of
Chile, a simplified stock corporation that will serve as “HoldCo” for all purposes under the Business Combination Agreement, in each case, as a direct wholly owned subsidiary of Prize and (iii) promptly following the incorporation of PubCo, Merger
Sub and HoldCo, Prize and AGH will consummate a pre-closing restructuring pursuant to which, among other things, all subsidiaries of Prize will become direct or indirect subsidiaries of HoldCo, HoldCo will become a wholly owned subsidiary of Merger
Sub, and Merger Sub will become a wholly owned subsidiary of Prize (collectively, the “Pre-Closing Restructuring”).
Following the Pre-Closing Restructuring, at the closing of the Business Combination, (i) the Company will be merged with and into PubCo with PubCo continuing as the surviving entity (the “First
Merger”) and (ii) subsequent to the First Merger, Merger Sub will be merged with and into PubCo with PubCo continuing as the surviving entity (the “Second Merger” and, together with the First Merger, the “Mergers”) (such transactions and those
otherwise contemplated by the Business Combination Agreement, collectively, the “Business Combination”).
The terms of the Business Combination Agreement, which contains customary representations and warranties, covenants, closing conditions and other terms relating to the Business Combination, are
summarized below. Capitalized terms used in this Annual Report but not otherwise defined herein have the meanings given to them in the Business Combination Agreement, which is included as an exhibit to this Annual Report.
Consideration
In accordance with the terms and subject to the conditions of the Business Combination Agreement, by virtue of the First Merger, (i) each Rose Hill ordinary share that is issued and outstanding
immediately prior to the First Merger will be converted into one validly issued, fully paid and non-assessable PubCo ordinary share, and (ii) all outstanding warrants to purchase ordinary shares of Rose Hill will be converted into warrants to
purchase the same number of PubCo ordinary shares and all rights with respect to Rose Hill ordinary shares under such Rose Hill warrants will be converted into rights with respect to the applicable PubCo ordinary shares.
In accordance with the terms and subject to the conditions of the Business Combination Agreement, by virtue of the Second Merger, each Merger Sub ordinary share that is issued and outstanding
immediately prior to the Second Merger will be converted into a number of PubCo ordinary shares equal to the quotient of (i) the Equity Value, divided by (ii) the number of Merger Sub ordinary shares that are issued and outstanding immediately
prior to the Second Merger, divided by (iii) $10.00. The “Equity Value” under the Business Combination Agreement is an amount equal to (i) $328,000,000, minus (ii) the lesser of (a) the aggregate amount of transaction expenses (the “Specified
Transaction Expenses”) of Prize and the Company (other than those expenses incurred in respect of obtaining an equity line of credit or similar financing arrangement to be in place and available to PubCo as of the closing of the Business
Combination (“Closing”)) and (b) $10,000,000.
In the event that the Specified Transaction Expenses exceed $10,000,000, then the number of PubCo ordinary shares otherwise issuable to Rose Hill Sponsor LLC (the “Sponsor”) under the Business
Combination Agreement will be decreased by a number of shares equal to the amount of such excess divided by $10.00.
Earn-Out Shares
If, at any time following the Closing, the daily volume-weighted average price (“VWAP”) of PubCo ordinary shares is greater than or equal to (a) $18.00, (b) $22.00, (c) $26.00, or (d) $30.00 in
each case, over any thirty (30) days on which the PubCo ordinary shares are tradeable on NASDAQ (“Trading Days”) within any consecutive forty-five (45) Trading Day period then PubCo will issue 2,948,800 PubCo ordinary shares to Prize (“Earn-Out
Shares”) after the occurrence of each such consecutive forty-five (45) Trading Day period. For the avoidance of doubt, Prize may be entitled to receive a maximum of 11,795,200 Earn-Out Shares in the aggregate in respect of the occurrence of all
four Earn-Out events.
Registration Rights and Lock-up Agreement
In connection with the Closing of the Business Combination Agreement, PubCo, the Sponsor, Prize and certain other parties thereto will enter into a registration rights and lock-up agreement (the
“Registration Rights and Lock-Up Agreement”), which, among other things, (i) effective as of the Closing, terminates and replaces the current registration rights agreement, dated as of October 13, 2021, by and among Rose Hill, the Sponsor and the
other parties thereto, (ii) provides that PubCo will be obligated to file a registration statement to register the resale of certain PubCo ordinary shares held by Sponsor, Prize and certain other parties thereto, at the consummation of the business
combination, (iii) provides certain parties thereto including Prize, certain demand and piggyback registration rights, and (iv) provides for certain restrictions on transfer relating to PubCo ordinary shares and warrants to purchase PubCo ordinary
shares held by Sponsor, Prize and certain parties thereto.
Company Support Agreement
In connection with the execution of the Business Combination Agreement, Rose Hill, Prize and AGH have entered into a company support agreement (the “Company Support Agreement”) pursuant to which,
among other things, AGH has agreed to (a) vote his Merger Sub ordinary shares in favor of the approval and adoption of the Business Combination Agreement and the Business Combination and (b) certain transfer restrictions with respect to his Merger
Sub ordinary shares and shares of Prize.
Sponsor Support Agreement
In connection with the execution of the Business Combination Agreement, the Sponsor entered into a sponsor support agreement (the “Sponsor Support Agreement”) pursuant to which the Sponsor has
agreed, among other things, to (i) certain restrictions on transfer relating to its ordinary shares of Rose Hill prior to the Closing as set forth therein, (ii) not redeem any of its shares of Rose Hill in connection with the vote to approve the
Business Combination or any proposal to extend the date by which Rose Hill must complete an initial business combination, (iii) vote in favor of the Mergers and the other transactions and against any alternative transaction, (iv) waive certain
anti-dilution provisions contained in Rose Hill’s Articles in connection with the Mergers and (v) subject a certain number of its Class B ordinary shares of Rose Hill to vesting.
Standby Equity Purchase Agreement
In connection with the execution of the Business Combination Agreement and for purposes of obtaining equity financing on behalf of PubCo at Closing, Prize entered into a standby equity purchase
agreement with a financial investor and affiliate of Yorkville Advisors (the “Investor”), pursuant to which, among other things, at the Closing, PubCo will have the right (but not the obligation) to sell to the Investor, and the Investor will
purchase from PubCo, up to $150,000,000 of PubCo ordinary shares at a purchase price of 97% of the Market Price (as defined therein) of the PubCo ordinary shares, subject to the terms and conditions set forth therein.
For additional information regarding the Business Combination and the transactions contemplated thereby, see the Current Report on Form 8-K filed with the SEC on October 25, 2022.
Other than as specifically discussed, this Annual Report does not assume the closing of the Business Combination.
Rose Hill’s Purpose and Competitive Advantage
We believe that the Latin American region holds a diverse base of numerous public-ready businesses seeking capital to fund their operations and achieve long-term growth. However, most companies in
the region face hurdles in their pursuit of equity capital through traditional avenues. Late private funding for emerging companies in Latin America remains scarce and expensive, while the local public capital markets outside Brazil have
historically been inefficient, illiquid, and limited in depth as compared to the U.S. capital markets. We plan to capitalize on this pent-up demand for growth equity and market access to provide an attractive capital solution for the region’s
high-growth private companies. We strongly believe that the growth path for many of these emerging private companies can be accelerated through a Nasdaq listing, access to the broad U.S. institutional investor base, and the type of strategic
partnership that our company offers.
In pursuit of this goal, our investment thesis is based on three core principles to complete a business combination in Latin America: (i) successful navigation of these markets requires a dedicated
team of individuals with long track records of success investing and operating in the region; (ii) successfully capitalizing on the Special Purpose Acquisition Company, or “SPAC”, as a vehicle which requires transaction expertise with the SPAC
product and ample experience in structuring business combinations; and (iii) long-term value creation post business combination requires deep understanding of both U.S. public market dynamics and Latin American operating requirements. Based on
these principles, Rose Hill was founded and strategically structured to provide a comprehensive array of both regional and product know-how that collectively maximizes our probability of success.
Our management team is comprised of individuals that collectively possess: (i) over 30 years of experience leading publicly traded companies and conglomerates in Latin America; (ii) more than $130
billion of completed mergers and acquisitions transactions across Latin American markets, including leading and managing the Investment Banking practice at Scotiabank in Mexico, and Latin American coverage at Morgan Stanley and Barclays Capital;
(iii) deep investment expertise from a partner at a $1.5 billion asset manager in the region; and (iv) experience underwriting and advising SPAC offerings and business combinations.
Our independent board of directors was selected to provide expertise across our five main Latin American target markets: Mexico, Colombia, Brazil, Chile, and Peru. These individuals bring over 100
years of combined investing and advising experience across dozens of industries in the region. Our independent directors are industry leaders with substantial operational expertise, partners and presidents at leading private equity firms in Latin
America, former country CEOs at consulting firms in the region, and former public company senior executives.
Our strategic investor in Latin America, Ameris Capital, brings (i) a deep understanding and track record of success investing in the region across multiple asset classes and industries; (ii)
relationships with premier long-only investors in Latin America; (iii) an extensive background in creatively structuring deals in the region; and (iv) a wide breadth of public markets expertise.
We have thoughtfully integrated these principles across all layers of our structure. In our view, these structural advantages position Rose Hill as a well-rounded SPAC team with a deep
understanding of every step of the business combination process, from deal sourcing and negotiating in Latin American markets, to forging a long-term successful partnership with a target company, like Prize, that will be well received by the U.S.
public markets.
Our Management Team
Throughout their careers, members of our management team have:
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Led and managed major public and private companies in Latin America including Axtel, Grupo Alfa, Sigma Alimentos and Hylsamex;
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Built partnerships and relationships with multinational corporations, best-in-class financial sponsors, family-owned businesses, and family offices across the region;
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Sourced, negotiated, and executed multi-billion-dollar M&A, transactions and equity and debt capital raisings in Latin America for over 18 years;
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Developed investing and operational expertise in Latin America through private equity investments, entrepreneurial endeavors, and board memberships;
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Recruited, retained, and managed high-performing management teams with proven track records; and
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Participated in the underwriting, co-sponsoring, and business combination efforts of SPAC transactions.
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Our Independent Directors
We have strategically selected our board of directors to provide expertise across Latin America’s primary markets: Mexico, Brazil, Colombia, Chile, and Peru. For these countries, each board member
provides (i) a proprietary network of family and private equity owned businesses that gives us superior target sourcing capabilities; (ii) operational know-how to successfully navigate each country’s unique macroeconomic landscape and specific
industry dynamics; and (iii) a strategic and network support post business combination for each of those countries and across Latin America.
Our independent directors include:
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Partners and former CEOs at private equity firms with substantial presence in Latin America, such as Ameris Capital, Portland Private Equity, Rio Bravo Investimentos, among others;
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Operators of major Latin American conglomerates, including Intercorp Perú Ltd, and former country Managing Partner for Brazil Accenture, a globally recognized consulting firm;
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Top investment bankers in the region such as the Head of Investment Banking at Santander Bank Mexico, the third largest bank in Mexico by assets, and former Head of UBS and Citigroup Investment Banking in Colombia.
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Our Strategic Investor
Ameris Capital, our strategic investor with deep expertise and experience in Latin America, is a Chilean-based
alternative asset manager focused on private and public equities, real estate, private debt, and infrastructure investments with $1.5 billion in assets under management and over 50 investment professionals. Recognized as one of the leading
alternative asset managers in the Andean region, Ameris Capital brings over 100 years of combined advisory, investment, and operational experience through their partners, assisting companies in their entire journey to develop, grow, and build
long-lasting capabilities. As of December 31, 2022, Ameris’ portfolio was composed of over 30 funds with more than 50 investments as underlying assets. Their partners have been advisors to boards or board directors in companies across industries
such as fintech, energy, consumer, industrials, finance, B2B technologies, mining services, and agribusiness.
Our relationship with Ameris will be reinforced by the service of Christian Moreno, President of Ameris, on our board of directors and of Jose Mujica, a partner and Head of private equity at
Ameris, on our management team as Chief Strategy Officer. An affiliate of Ameris has made an investment in and is a member of our sponsor.
We will seek to leverage our strategic investor’s platforms, including the option to access its teams, deal prospects, and network to aid the management team in the identification, diligence and
operational support of a target for our initial business combination. We believe that we will benefit from our strategic investor’s deep experience as a leading investment firm in Latin America, bringing extensive networks of relationships that we
believe may provide us with a distinct advantage for sourcing opportunities and unlocking long-term shareholder value.
Latin America Market Opportunity
We believe that strong fundamentals across Latin America’s demographics support the convergence towards economic development, capital formation, and growth observed in developed countries such as
the U.S. and Canada. The region’s expanding middle class, growing young population, participation of women in the labor force, and increasing urbanization position the Latin American economies on a higher growth trajectory than developed countries
for the next decade. According to the World Bank, Latin America’s middle class grew by 48% from approximately 152 million people in 2009 to 225.3 million in 2020, signaling an increasing demand for new innovative products and services. In addition,
Latin America’s population is more than double that of the U.S. at over 658 million, almost half of which are under 30 years old. Moreover, urbanization rates above 80% remain among the highest in the world, migrating the region’s economies towards
higher needs for education, increased productivity, and stronger demand for financial, digitalization and telecommunication services.
We believe these favorable demographic trends combined with recent technological adoption, enable high growth industries such as fintech, e-commerce, telecommunications, clean technology, and
healthcare to thrive and expand across the region. As a result, Latin America’s private sector is expected to capitalize on these growth trends driven by:
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Infrastructure investments: Ongoing private and public investments in physical and digital infrastructure, such as (i)
logistics and transport network infrastructure (ii) sustainable and clean energy generation capacity (iii) healthcare infrastructure, and (iv) digital connectivity including fiber, wireless towers and data centers;
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Largely underpenetrated services and product markets: Low penetration of financial services, insurance, and e-commerce
services as a result of market inefficiencies, regulation, and economic underdevelopment. Wide and inexpensive mobile access is now available across the region (66% of Latin Americans own a smartphone) and increasing broadband penetration
in major cities provide an opportunity for digitalization adoption in products and services across these markets;
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Strong private equity and venture capital activity: Private equity funding in Latin America increased at a 20.2% CAGR
from 2011 to 2019 to $14.3 billion, while venture capital investment soared from $143.0 million in 2011 to $4.6 billion in 2019. We believe that these robust trends, along with the ongoing institutionalization for many family-owned and
private companies, are leading indicators of the upcoming requirements of growth capital in the region;
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Technological and digital expansion: The COVID-19 pandemic exacerbated the rapid technological assimilation,
digitalization, and cloud migration in Latin America, allowing companies to process and manage large quantities of information through big data and cloud adoption. In addition, enhanced automation in manufacturing continues to drive
productivity across Latin America;
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Favorable macroeconomic tailwinds: (i) inflation rates in the region remaining stable at 2.87% from 2011 to 2019,
excluding Argentina and Venezuela (ii) average unemployment rates remaining stable at approximately 7.0% from 2011 to 2019, (iii) low interest rates across Mexico, Brazil, Colombia, Chile and Peru, reducing companies’ cost of borrowing
and shifting the region’s investment appetite into equities, and (iv) sustained increase in foreign direct investments (FDI) as a percentage of GDP, from 2.75% in 2009 to 3.16% in 2019, accelerating the inflow of capital and investment;
and
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Favorable geopolitical environment: Existing trade tensions between the United States and China have resulted in new
tariffs decreasing the low-cost competitive advantage of China. As a result, multinationals are relocating supply chains out of Asia (accelerated by the COVID-19 pandemic) into Latin America driven by favorable trade agreements,
proximity, and cheap labor costs.
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Attractiveness of a U.S. Listing for Latin American Companies
In our view, the efficient and optimal path to maximize equity capital raising, liquidity, transparency and access to a diverse investor base is through a U.S. public listing instead of pursuing a
late private funding or listing on a local exchange. Additionally, inefficiencies and friction across local capital markets, limited depth, and concentrated institutional investment are challenges for domestic IPOs. We believe a U.S. listing
provides strong advantages compared to a local listing based on the following considerations:
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Broader investor base: U.S. listed Latin American companies have access to a broader and sophisticated pool of investors,
including emerging markets funds, Latin American long-only funds, qualified institutional buyers, Latin American pension funds, U.S. funds looking for emerging markets diversification, and retail investors. In contrast, Latin American
local listing investors outside Brazil tend to be limited to local pension funds and select institutional investors, while retail participation remains low;
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Higher liquidity levels: Access to a broader investor base in the U.S. allows for higher average daily trading volume
(ADTV) levels. For 2020, the total value traded in the NYSE and NASDAQ exchanges as a percentage of their market capitalization was 115%, compared to only 41% on average for the exchanges in Mexico, Brazil, Colombia, Chile, and Peru;
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Larger market size and higher risk appetite: The U.S. investor base has a vast breadth of experience analyzing and
investing on emerging growth stories, as well as funding complex business models.
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Limited depth of local markets: The region’s domestic equity markets have limited depth, with an average combined stock
market capitalization as a percentage of GDP of 51% in 2019 for the exchanges in Mexico, Brazil, Colombia, Chile, and Peru; compared to 175% for the U.S. markets; and
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Lower Market and Ownership Concentration: Latin America’s local markets are dominated by a few large company groups as a
percentage of total capitalization, while their ownership is largely concentrated in local pension funds. The U.S. markets provide lower levels of ownership and market concentration, which in turn fosters liquidity levels.
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Sector Opportunity
Although we will seek investments in all sectors and industries, we intend to focus on companies with distinct competitive advantages, leading market positions, and operations in fast-growing and
profitable sectors in Latin America. Our management team, board of directors, and strategic investors have ample experience and successful track records operating, investing, and advising Latin American companies across the following sectors, and
we expect to focus our primary search efforts on these:
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Healthcare: We intend to focus our search efforts on companies within the healthcare services, diagnostics, medical
equipment, generic pharmaceutical laboratories, digital and telehealth subsectors. In our view, limited government healthcare spending and insufficient coverage represents an opportunity for private companies to grow and capture
significant market share. In 2018, healthcare spending per capita in the region reached $666.9, compared to $4,899.6 for OECD countries, with out-of-pocket expenditures as a percentage of total health expenditures reaching 30.1%, compared
to 13.7% for OECD countries. In addition, improvements in basic infrastructure have shifted the region’s disease burden from communicable diseases to chronic diseases such as obesity, diabetes, cardiovascular diseases and cancer; greatly
increasing the demand potential for mobile health tracking, telemedicine, diagnostics, and cost-effective therapies. In 2020, subsector market sizes in Latin America for diagnostics and mobile health reached $2.72 billion and $3.53
billion respectively.
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Financial Services: We intend to target companies within the payments, transaction processing, asset management,
insurtech, alternative lending, and digital banking subsectors. We believe a substantial opportunity exists in the financial services sector, specifically in digital banking and payments, given the region’s vastly underpenetrated banking
systems coupled with an increase in both digitalization and broadband connectivity. As of May 1, 2021, approximately 50% of Latin Americans were unbanked, while 75% had access to internet connectivity, the majority being through mobile
phones. Additionally, government regulators in countries such as Mexico and Brazil continue to lower barriers to entry that have historically prevented fintech companies from obtaining bank charters and lending licenses, while
simultaneously promoting digital payment options and services. As a result, several fintech companies have emerged into traditionally underserved and untapped markets, providing efficient digital banking and B2B services for new consumers
and merchants. In 2020, fintech venture capital funding in Latin America totaled $2.1 billion, representing a growth of 690% over the past five years.
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Technology and Digital Infrastructure: We intend to focus on companies within the cloudtech, software, data center, IT
services, fiber and cell phone tower subsectors. We believe the young demographics, high penetration of smartphone usage, and large-scale digitalization of companies in Latin America have resulted in numerous technology companies emerging
and rapidly building digital infrastructure. Additionally, Latin American businesses are increasingly outsourcing their IT functions to more cost-efficient solutions through cloud service, cybersecurity, and IT providers. The region’s
cloud computing market is projected to increase at a CAGR of 22.4% from 2019 to 2023, primarily driven by the increase in demand for the hybrid cloud, IaaS, PaaS and SaaS segments. We will seek to capitalize on the region’s heavy wave of
technology investments experienced from 2009 to 2020, which saw $16 billion invested across 2,800 tech startups and $4.2 billion of which was raised in 2020 alone. This funding has resulted in numerous high-growth, disruptive companies,
now at a mature stage and well poised for a listing on public markets.
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Consumer Goods and E-commerce: We intend to focus on companies that access consumers through non-traditional digital
channels and are data driven in their commercial approach. As demographics and income segmentation become more transparent in the region due to higher digital penetration and urbanization rates, including lower costs of acquiring data and
accessing customer directly, we believe that e-commerce and e-services will continue gaining market share over traditional distribution and retail channels. As a percentage of total advertising expenditures, digital advertising in the
region grew from 18% in 2015 to 39.1% in 2020, compared to 62.9% for the U.S. in 2020. Retail e-commerce in Latin America grew at a 16.5% CAGR since 2015 to $95.8 billion in 2020. In addition, COVID-19 exacerbated the growth in the
e-commerce sector, with over 500 million consumers driven into lock-down regimes and 17% of such consumers attempting to execute an online purchase for the first time. Despite its recent expansion, the sector remains largely
underpenetrated compared to developed economies, with e-commerce sales as a percentage of retail sales in the region of 5.6% in 2020, compared to 21.3% in the U.S.
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Industrials and Manufacturing: We intend to target industrials and manufacturing companies that produce value added and
non-commoditized products, have unique competitive advantages, and cater to large domestic and export markets with emphasis on end-products in industries of high structural growth or requiring significant tacit knowledge, such as
aerospace & defense or electric vehicles. In our view, the lower labor costs, sizeable domestic and export markets, integrated production ecosystems, and relative ease of access to inputs offers substantial opportunity for profitable
manufacturing in the region. In addition, free trade agreements between the United States and 11 countries in Latin America and geographic proximity to the United States gives preferable access to the largest consumer end-market in the
world. From an enterprise standpoint, COVID-19’s disruption of just-in-time manufacturing that traditionally relied on Asian markets has caused western multinationals to look to diversify their supply-chains globally. We believe Latin
America is well poised to attract this diversification given its proximity, cost advantage and similar time zone to the U.S.
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Investment Criteria
We have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses, including Prize. While we intend to use these criteria
and guidelines in evaluating initial business combination opportunities, we may decide to enter into a business combination with a target that does not meet some or all of these criteria and guidelines.
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Size: We intend to target companies whose pre-money valuation is between $400 million and $1 billion, determined by the
sole discretion of our management team and according to reasonably accepted valuation standards and methodologies. We believe investing in companies of this size range offers, on average, higher growth potential and higher probability of
stronger post business combination share price performance than larger capitalization stocks, as well as potential for favorable opportunities to invest in companies not accessible to large institutional investors. According to S&P
data from 1990 to 2019, relative returns of small-cap indices such as S&P 600 and Russell 2000 have outperformed large-cap indices such as the S&P 500 Index.
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Growth: We intend to focus on companies with consistent and historical revenue and EBITDA growth. In addition, we will
seek companies that are well-positioned to capture additional market share;
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Profitability: We intend to target established companies with demonstrated track records of profitability and operating
cash flow through strong business fundamentals;
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Competitive Market Positioning: We expect to focus on companies that have achieved a strategic or sizable market position
in a large addressable and growing industry, and in which a partnership with Rose Hill would provide a tangible opportunity to become a market leader through geographical expansion and/or higher market penetration within existing markets;
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Public-listing Readiness: We intend to seek companies that have the appropriate corporate governance, financial controls,
and reporting processes in place to fulfill the regulatory requirements of a U.S. publicly traded entity;
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High-Quality Management Team: We expect to focus on companies with seasoned management teams with demonstrated track
records and prepared to run a publicly traded company. We will devote significant time and effort into analyzing and reaching consensus with the target’s management and stakeholders to ensure their long-term strategy is aligned with our
values and investment thesis; and
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Environmental, Social, and Governance (ESG): We intend to focus on companies which have a strong sense of commitment
towards solving key issues in their communities and making a significant impact to society and all key stakeholders. We will seek companies with a commitment to social, economic, and environmental stewardship and sustainability, a desire
to increase diversity, equality, and inclusion with their business, product, service offering, or the desire to serve a specific social purpose. We believe a strong commitment to purpose or identity, coupled with a sound underlying
business, often results in the delivery of long-term stakeholder value.
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These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general
guidelines as well as other considerations, factors and criteria that our management team may deem relevant.
Initial Business Combination
So long as our securities are then listed on the Nasdaq, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least
80% of the net assets held in the Trust Account (excluding the amount of deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of signing a definitive agreement in connection with our initial
business combination. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or an independent valuation or
appraisal firm with respect to the satisfaction of such criteria. While we consider it unlikely that our board will not be able to make an independent determination of the fair market value of a target business or businesses, it may be unable to do
so if the board is less familiar or experienced with the target company’s business, if there is a significant amount of uncertainty as to the value of the company’s assets or prospects, including if such company is at an early stage of development,
operations or growth, or if the anticipated transaction involves a complex financial analysis or other specialized skills and the board determines that outside expertise would be helpful or necessary in conducting such analysis. Since any opinion,
if obtained, would merely state that the fair market value of the target business meets the 80% of net assets threshold, unless such opinion includes material information regarding the valuation of a target business or the consideration to be
provided, it is not anticipated that copies of such opinion would be distributed to our shareholders. However, if required under applicable law, any proxy statement that we deliver to shareholders and file with the SEC in connection with a proposed
transaction will include such opinion.
We anticipate structuring our initial business combination so that the post-business combination company in which our public shareholders own shares will own or acquire 100% of the equity interests
or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-business combination company owns or acquires less than 100% of such interests or assets of the target business in order
to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-business combination company owns or acquires 50% or more of the outstanding voting
securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even
if the post-business combination company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-business combination company,
depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In
this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority
of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-business combination company, the portion of such
business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value
of all of the target businesses. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor. If our securities are not then listed on the Nasdaq for
whatever reason, we would no longer be required to meet the foregoing 80% of net asset test.
To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, we may be affected by numerous
risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently
ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in our incurring
losses and will reduce the funds we can use to complete another business combination.
We are not prohibited from pursuing an initial business combination or subsequent transaction with a company that is affiliated with our sponsor, officers or directors. In addition, in the event we
seek to complete our initial business combination with a company that is affiliated with our sponsor or any of our officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking
firm or another independent entity that commonly renders valuation opinions that such initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary and contractual duties to other entities pursuant to which such officer or director is
or will be required to present a business combination opportunity. As a result, if any of our officers or directors becomes aware of a business combination opportunity that is suitable for an entity to which he, she or it has then-current fiduciary
or contractual obligations, then, subject to their fiduciary duties under Cayman Islands law, he, she or it will need to honor such fiduciary or contractual obligations to present such business combination opportunity to such entity, before we can
pursue such opportunity. If these other entities decide to pursue any such opportunity, we may be precluded from pursuing the same. However, we do not expect these duties to materially affect our ability to complete our initial business
combination. Our Articles provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging
directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be
a corporate opportunity for any director or officer, on the one hand, and us, on the other, unless such opportunity is expressly offered to such person in their capacity as a director or officer of our company and the opportunity is one we are
permitted to complete on a reasonable basis. For the avoidance of doubt, business combination opportunities presented to our officers or directors in the context of their positions with any other entity to which they have fiduciary or contractual
obligations will in any event be deemed presented to him or her in his or her capacity as a representative of such other entity.
Our sponsor, officers and directors may sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial business combination. Any
such companies may present additional conflicts of interest in pursuing an acquisition target, particularly in the event there is overlap among investment mandates. However, we do not currently expect that any such other blank check company would
materially affect our ability to complete our initial business combination. In addition, our sponsor, officers and directors are not required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest
in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence.
Status as a Public Company
We believe our structure will make us an attractive business combination partner to a target business. As an existing public company, we offer a target business an alternative to the traditional
IPO through a merger or other business combination with us. In a business combination transaction with us, the owners of the target business may, for example, exchange their shares of stock, shares or other equity interests in the target business
for our Class A ordinary shares (or shares of a new holding company) or for a combination of our Class A ordinary shares and cash, allowing us to tailor the consideration to the specific needs of the sellers. We believe target businesses will find
this method a more expeditious and cost effective method to becoming a public company than the typical IPO. The typical IPO process can take a longer period of time than the typical business combination transaction process, and there are
significant expenses in the IPO process, including underwriting discounts and commissions, that may not be present to the same extent in connection with a business combination with us.
Furthermore, once a proposed business combination is completed, the target business will have effectively become public, whereas an IPO is always subject to the underwriters’ ability to complete
the offering, as well as general market conditions, which could delay or prevent the offering from occurring or have negative valuation consequences. Once public, we believe the target business would then have greater access to capital, an
additional means of providing management incentives consistent with shareholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further benefits by augmenting a company’s profile among
potential new customers and vendors and aid in attracting talented employees.
While we believe that our structure and our management team’s backgrounds will make us an attractive business partner, some potential target businesses may view our status as a blank check company,
such as our lack of an operating history and our ability to seek shareholder approval of any proposed initial business combination, negatively.
Emerging Growth Company
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various
reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder
approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more
volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act
for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take
advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth
anniversary of the completion of our IPO, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that
are held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Smaller Reporting Company
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations,
including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates
exceeds $250 million as of the prior June 30 and (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30.
Effecting Our Initial Business Combination
General
We intend to effectuate our initial business combination using cash from the proceeds of our IPO and the Private Placement Warrants, the proceeds of the sale of our shares or shares of a new
holding company in connection with our initial business combination (pursuant to subscription agreements, forward purchase agreements or backstop agreements), shares issued to the owners of the target, debt issued to bank or other lenders or the
owners of the target, or a combination of the foregoing or other sources. We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, which
would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for using equity or debt, or not all of the funds released from the Trust Account are used for payment of the consideration in connection with our
initial business combination or used for redemptions of our Class A ordinary shares, we may apply the balance of the cash released to us from the Trust Account for general corporate purposes, including for maintenance or expansion of operations of
the post-business combination company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
We may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our Trust
Account, or because we become obligated to redeem a significant number of our public shares upon the completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business
combination. There are no prohibitions on our ability to issue securities or incur debt in connection with our initial business combination. Other than the potential availability of the backstop arrangement with our sponsor, we are not currently a
party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities, the incurrence of debt or otherwise.
Sources of Target Businesses
We anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment market participants, private equity groups, investment banking
firms, consultants, accounting firms and large business enterprises. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may also introduce us
to target businesses in which they think we may be interested on an unsolicited basis, since some of these sources will have read our IPO prospectus or this Annual Report and know what types of businesses we are targeting. Our officers and
directors, as well as their affiliates, may also bring to our attention target business candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as
attending trade shows or conventions. In addition, we expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result of the business relationships of our officers and directors.
While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we may
pay a finder’s fee, consulting fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the extent our management determines that the use of a finder may bring
opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue. Payment of finder’s fees is customarily
tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the Trust Account. In no event, however, will our sponsor or any of our existing officers or directors, or their respective affiliates be paid by
us any finder’s fee or for any services they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction that it is).
We have agreed to pay our sponsor a total of $10,000 per month for office space, secretarial and administrative support and to reimburse our sponsor for any out-of-pocket expenses related to
identifying, investigating and completing an initial business combination. In addition, we may make payments of up to $13,000 per month to members of our management team for services rendered to us commencing on the date that our securities are
first listed on Nasdaq through the earlier of consummation of our initial business combination and our liquidation. Some of our officers and directors may enter into employment or consulting agreements with the post-business combination company
following our initial business combination. The presence or absence of any such fees or arrangements will not be used as a criterion in our selection process of an acquisition candidate.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In addition, in the event we seek to complete our
initial business combination with a company that is affiliated with our sponsor or any of our officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another
independent entity that commonly renders valuation opinions that such initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities, including entities that are affiliates
of our sponsor, pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity
that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, subject
to their fiduciary duties under Cayman Islands law. See “Management—Conflicts of Interest.”
Evaluation of a Target Business and Structuring of Our Initial Business Combination
In evaluating a prospective target business, we expect to conduct an extensive due diligence review that may encompass, as applicable and among other things, meetings with incumbent management and
employees, document reviews, interviews of customers and suppliers, inspection of facilities and a review of financial and other information about the target and its industry. We will also utilize our management team’s operational and capital
planning experience. If we determine to move forward with a particular target, we will proceed to structure and negotiate the terms of the business combination transaction.
The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently
ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of, and negotiation with, a prospective target business with which our initial business combination is not ultimately completed will
result in our incurring losses and will reduce the funds we can use to complete another business combination. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent
of our sponsor.
Lack of Business Diversification
For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike
other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single
line of business. By completing our initial business combination with only a single entity, our lack of diversification may:
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subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination; and
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cause us to depend on the marketing and sale of a single product or limited number of products or services.
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Limited Ability to Evaluate the Target’s Management Team
Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination with that business, our
assessment of the target business’s management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our
management team, if any, in the target business cannot presently be stated with any certainty. The determination as to whether any of the members of our management team will remain with the combined company will be made at the time of our initial
business combination. While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs
subsequent to our initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business.
We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will
remain with the combined company will be made at the time of our initial business combination.
Following a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to
recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Shareholders May Not Have the Ability to Approve Our Initial Business Combination
We may conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC, subject to the provisions of our Articles. However, we will seek shareholder approval if it is
required by applicable law or stock exchange listing requirement, or we may decide to seek shareholder approval for business or other reasons.
Under the Nasdaq’s listing rules, shareholder approval would typically be required for our initial business combination if, for example:
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We issue ordinary shares that will be equal to or in excess of 20% of the number of our ordinary shares then-outstanding (other than in a public offering);
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Any of our directors, officers or substantial security holder (as defined by the Nasdaq rules) has a 5% or greater interest, directly or indirectly, in the target business or assets to be acquired or otherwise and the present or
potential issuance of ordinary shares could result in an increase in issued and outstanding ordinary shares or voting power of 1% or more (or 5% or more if the related party involved is classified as such solely because such person is a
substantial security holder); or
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The issuance or potential issuance of ordinary shares will result in our undergoing a change of control.
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The decision as to whether we will seek shareholder approval of a proposed business combination in those instances in which shareholder approval is not required by law will be made by us, solely in
our discretion, and will be based on business and reasons, which include a variety of factors, including, but not limited to:
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the timing of the transaction, including in the event we determine shareholder approval would require additional time and there is either not enough time to seek shareholder approval or doing so would place the company at a disadvantage
in the transaction or result in other additional burdens on the company;
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the expected cost of holding a shareholder vote;
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the risk that the shareholders would fail to approve the proposed business combination;
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other time and budget constraints of the company; and
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additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to shareholders.
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Permitted Purchases and Other Transactions with Respect to Our Securities
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our
sponsor, directors, officers, advisors or their affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination.
Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors, executive officers, advisors or their affiliates
may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, they have no current
commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the Trust Account will be used to purchase public shares or warrants in such
transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by
Regulation M under the Exchange Act.
In the event that our sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise
their redemption rights or submitted a proxy to vote against our initial business combination, such selling shareholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial business
combination. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange
Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will be required to comply with such rules.
The purpose of any such transaction could be to (i) vote in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination, (ii)
reduce the number of public warrants outstanding or vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination or (iii) satisfy a closing condition in an agreement with a
target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. Any such purchases of our securities may result
in the completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float” of our Class A ordinary shares or public warrants may be reduced and the number of beneficial holders of our securities may be reduced,
which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our sponsor, officers, directors and/or their affiliates anticipate that they may identify the shareholders with whom our sponsor, officers, directors or their affiliates may pursue privately
negotiated transactions by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders (in the case of Class A ordinary shares) following our mailing of tender offer or proxy materials in
connection with our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into a private transaction, they would identify and contact only potential selling or redeeming shareholders
who have expressed their election to redeem their shares for a pro rata share of the Trust Account or vote against our initial business combination, whether or not such shareholder has already submitted a proxy with respect to our initial business
combination but only if such shares have not already been voted at the general meeting related to our initial business combination. Our sponsor, executive officers, directors, advisors or their affiliates will select which shareholders to purchase
shares from based on the negotiated price and number of shares and any other factors that they may deem relevant, and will be restricted from purchasing shares if such purchases do not comply with Regulation M under the Exchange Act and the other
federal securities laws.
Our sponsor, officers, directors and/or their affiliates will be restricted from making purchases of shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. We
expect any such purchases would be reported by such person pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.
Redemption Rights for Public Shareholders upon the Completion of Our Initial Business Combination
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial business combination, including interest earned on the funds held in the Trust
Account and not previously released to us to pay our income taxes, if any, divided by the number of then-outstanding public shares, subject to the limitations described herein. The per-share amount we will distribute to investors who properly
redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its
shares. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Further, we will not proceed with redeeming our public shares, even if a public shareholder has properly elected to
redeem its shares, if a business combination does not close. Our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder
shares and public shares held by them in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our Articles (A) that would modify the substance or timing of our obligation to
provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the
Extension Period and (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares.
Limitations on Redemptions
Our Articles provide that in no event, in connection with the approval of our initial business combination, will we redeem our public shares in an amount that would cause our net tangible assets to
be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). However, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to
the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would
be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash
available to us, we will not complete the business combination or redeem any shares, and all Class A ordinary shares submitted for redemption will be returned to the holders thereof.
Manner of Conducting Redemptions
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination either (i) in
connection with a general meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made
by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing
requirement or whether we were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval under SEC rules). Asset acquisitions and share purchases would not typically require shareholder
approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our issued and outstanding ordinary shares or seek to amend our Articles would typically require shareholder approval. We
currently intend to conduct redemptions in connection with a shareholder vote unless shareholder approval is not required by applicable law or stock exchange listing requirement or we choose to conduct redemptions pursuant to the tender offer rules
of the SEC for business or other reasons. So long as we obtain and maintain a listing for our securities on the Nasdaq, we will be required to comply with the Nasdaq rules.
If we held a shareholder vote to approve our initial business combination, we will, pursuant to our Articles:
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and
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file proxy materials with the SEC.
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In the event that we seek shareholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public shareholders with the
redemption rights described above upon the completion of the initial business combination.
If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative
vote of a majority of the shareholders who attend and vote at a general meeting of the Company. In such case, our sponsor and each member of our management team have agreed to vote their founder shares and Class A ordinary shares held by the
founders in favor of our initial business combination. As of January 31, 2023, our sponsor owns, on an as-converted basis, 95% of our outstanding ordinary shares. Therefore, we would not need any of the 256,984 public shares issued and outstanding
(assuming all issued and outstanding shares are voted or assuming only the minimum number of shares representing a quorum are voted) to be voted in favor of an initial business combination in order to have such initial business combination
approved. Our directors and officers have entered into an agreement, imposing the obligation on them to vote in favor of our initial business combination, including the Business Combination Agreement with respect to our initial purchaser’s founder
shares and Class A ordinary shares acquired by them. We expect that our initial shareholders and their permitted transferees will own at least 5% 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.
Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all. Our sponsor and each member of our
management team have also entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with (i) the completion of a business
combination and (ii) a shareholder vote to approve an amendment to our Articles (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection
with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the Extension Period (or such later date as may be approved by our shareholders) or (B) with respect to any
other provision relating to the rights of holders of our Class A ordinary shares.
If we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our Articles:
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conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and
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file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is
required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
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Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate any plan established in
accordance with Rule 10b5-1 to purchase Class A ordinary shares in the open market, in order to comply with Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act,
and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public shareholders not tendering more than the number of public shares
we are permitted to redeem. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination.
Limitation on Redemption upon the completion of Our Initial Business Combination If We Seek Shareholder Approval
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, then,
pursuant to our Articles, 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 Public Shares, which we refer to as “Excess Shares,” without our prior consent. We believe this restriction will discourage shareholders from accumulating
large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our management to purchase their shares at a significant
premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the Public Shares could threaten to exercise its redemption rights if such holder’s shares
are not purchased by us, our sponsor or our management at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders’ ability to redeem no more than 15% of the Public Shares without our prior consent, we
believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a
closing condition that we have a minimum net worth or a certain amount of cash.
However, we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Tendering Share Certificates in Connection with a Tender Offer or Redemption Rights
Public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” will be required to either tender their certificates (if any)
to our transfer agent prior to the date set forth in the proxy solicitation or tender offer materials, as applicable, mailed to such holders, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC
(Deposit / Withdrawal At Custodian) System, at the holder’s option, in each case up to two business days prior to the initially scheduled vote to approve the business combination. The proxy solicitation or tender offer materials, as applicable,
that we will furnish to holders of our public shares in connection with our initial business combination will indicate the applicable delivery requirements, which will include the requirement that a beneficial holder must identify itself in order
to validly redeem its shares. Accordingly, a public shareholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two business days prior to the initially scheduled vote on the
proposal to approve the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short period in which to exercise redemption rights, it
is advisable for shareholders to use electronic delivery of their public shares.
There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically
charge the tendering broker a fee of approximately $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to
exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.
The foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection with their business combinations, many blank check companies
would distribute proxy materials for the shareholders’ vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise
his or her redemption rights. After the business combination was approved, the company would contact such shareholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the shareholder then had an “option
window” after the completion of the business combination during which he or she could monitor the price of the company’s shares in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market
before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which shareholders were aware they needed to commit before the general meeting, would become “option” rights surviving past the
completion of the business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming shareholder’s election to redeem is irrevocable once the
business combination is approved.
Any request to redeem such shares, once made, may be withdrawn at any time up to two business days prior to the initially scheduled vote on the proposal to approve the business combination, unless
otherwise agreed to by us. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such
holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly
after the completion of our initial business combination.
If our initial business combination is not approved or completed for any reason, then our public shareholders who elected to exercise their redemption rights would not be entitled to redeem their
shares for the applicable pro rata share of the Trust Account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different target until the Extension Period (or such later date as
may be approved by our shareholders).
Redemption of Public Shares and Liquidation If No Initial Business Combination
Our Articles provide that we will have until the end of the Extension Period (or such later date as may be approved by our shareholders) to consummate an initial business combination. If we have
not consummated an initial business combination within the 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 the
public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our income taxes, if
any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive
further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in 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 consummate an initial business combination within the Extension Period. Our Articles provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures
with respect to the liquidation of the Trust Account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
Our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the Trust
Account with respect to any founder shares they hold if we fail to consummate an initial business combination within the Extension Period (or such later date as may be approved by our shareholders), 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 timeframe.
Our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our Articles (A) that would modify the substance or timing of
our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business
combination within the Extension Period (or such later date as may be approved by our shareholders) or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, unless we provide our public
shareholders with the opportunity to redeem their Class A shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds
held in the Trust Account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described herein. However, in connection with the approval of our
initial business combination, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules).
We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining held outside the Trust
Account plus up to $100,000 of funds from the Trust Account available to us to pay dissolution expenses, although we cannot assure you that there will be sufficient funds for such purpose.
If we were to expend all of the net proceeds of our IPO and the sale of the private placement warrants, other than the proceeds deposited in the Trust Account, and without taking into account
interest, if any, earned on the Trust Account, the per-share redemption amount received by shareholders upon our dissolution would be $10.89. The proceeds deposited in the Trust Account could, however, become subject to the claims of our creditors
which would have higher priority than the claims of our public shareholders. We cannot assure you that the actual per-share redemption amount received by shareholders will not be less than $10.89. While we intend to pay such amounts, if any, we
cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have all vendors, service providers, prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title,
interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be
prevented from bringing claims against the Trust Account including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case
in order to gain an advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management
will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to
us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be
significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will
agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason. In order to protect the amounts held in
the Trust Account, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us (other than our independent registered public accounting firm), or a prospective
target business with which we have discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below the lesser of (i) $10.89 per public share and (ii) the actual amount per public share held in the Trust Account as
of the date of the liquidation of the Trust Account if less than $10.89 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, provided that such liability will not apply to any claims by a third party or prospective target business that executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under our
indemnity of the underwriters or our IPO against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to
the extent of any liability for such third-party claims. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity
obligations and we believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by
third parties including, without limitation, claims by vendors and prospective target businesses.
In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.89 per public share and (ii) the actual amount per public share held in the Trust Account as of the date
of the liquidation of the Trust Account if less than $10.89 per public share due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay our income tax obligations, and our sponsor
asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce
its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in
exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.89 per public
share.
We will seek to reduce the possibility that our sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target
businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Our sponsor will also not be liable as to any claims under our
indemnity of the underwriters of our IPO against certain liabilities, including liabilities under the Securities Act. As of January 31, 2023, we have access to up to approximately $89,858 from funds held outside the Trust Account to pay any such
potential claims.
In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, shareholders who received funds from our Trust Account could be liable
for claims made by creditors, however such liability will not be greater than the amount of funds from our Trust Account received by any such shareholder.
If we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject
to applicable bankruptcy or insolvency law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the Trust Account, we
cannot assure you we will be able to return $10.89 per public share to our public shareholders. Additionally, if we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not
dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency
court could seek to recover some or all amounts received by our shareholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself
and our company to claims of punitive damages, by paying public shareholders from the Trust Account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public shareholders will be entitled to receive funds from the Trust Account only (i) in the event of the redemption of our public shares if we do not complete our initial business combination
within the Extension Period (or such later date as may be approved by our shareholders), (ii) in connection with a shareholder vote to amend our Articles (A) to modify the substance or timing of our obligation to provide holders of our Class A
ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the Extension Period or (B) with
respect to any other provision relating to the rights of holders of our Class A ordinary shares, or (iii) if they redeem their respective shares for cash upon the completion of the initial business combination. Public shareholders who redeem their
Class A ordinary shares in connection with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the Trust Account upon the subsequent completion of an initial business combination or liquidation
if we have not consummated an initial business combination within the Extension Period, with respect to such Class A ordinary shares so redeemed. In no other circumstances will a shareholder have any right or interest of any kind to or in the Trust
Account. In the event we seek shareholder approval in connection with our initial business combination, a shareholder’s voting in connection with the business combination alone will not result in a shareholder’s redeeming its shares to us for an
applicable pro rata share of the Trust Account. Such shareholder must have also exercised its redemption rights described above. These provisions of our Articles, like all provisions of our Articles, may be amended with a shareholder vote.
Competition
In identifying, evaluating and selecting a target business for our initial business combination, we may encounter intense competition from other entities having a business objective similar to
ours, including other blank check companies, private equity groups and leveraged buyout funds, public companies and operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience
identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than us. Our ability to acquire larger target businesses will be
limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection with our public shareholders who exercise their
redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of
these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Facilities
We currently maintain our executive offices at 981 Davis Dr NW, Atlanta, GA 30327. Our office space is currently included in the $10,000 per month fee we pay to our sponsor for office space,
administrative and support services pursuant to the Administrative Services Agreement. We consider our current office space adequate for our current operations.
Employees
We currently have five executive officers. Members of our management team are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as
they deem necessary to our affairs until we have completed our initial business combination. The amount of time they will devote in any time period will vary based the stage of the business combination process we are in.
Periodic Reporting and Financial Information
We have registered our Units, Class A ordinary shares and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current
reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will contain financial statements audited and reported on by our independent registered public accountants.
We will provide shareholders with audited financial statements of the prospective target business as part of the proxy solicitation or tender offer materials, as applicable, sent to shareholders.
These financial statements may be required to be prepared in accordance with, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of
the PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal
proxy rules and complete our initial business combination within the prescribed timeframe. We cannot assure you that any particular target business identified by us as a potential acquisition candidate will have financial statements prepared in
accordance with the requirements outlined above, or that the potential target business will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may
not be able to acquire the proposed target business. While this may limit the pool of potential acquisition candidates, we do not believe that this limitation will be material.
We are required to evaluate our internal control procedures under the Sarbanes-Oxley Act. Based on our assessment, we identified a material weakness in the design and operation of our internal
control over financial reporting because we did not maintain adequate controls over the classification and presentation of the statement of cash flows, specifically the classification of the purchase of marketable securities as operating activities
instead of investing activities. Based on this evaluation, our management has determined that our internal control over financial reporting was not effective as of December 31, 2022. For additional information please see Item 9A.—Controls and
Procedures.
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. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls.
The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
We are a Cayman Islands exempted company. Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying with
certain provisions of the Companies Act. As an exempted company, we have applied for and received, a tax exemption undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Act (2018 Revision) of the
Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition,
that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in
whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.
An investment in our securities involves a high degree of risk. In connection with any actual or proposed investment in our securities, you should consider carefully all of the
risks described below, together with the other information contained in this Annual Report. If any of the following risks occur, our business, financial condition or results may be materially and adversely affected. In that event, the trading price
of our securities could decline, and you could lose all or part of your investment. The risk factors described below are not necessarily exhaustive and you are encouraged to perform your own investigation with respect to us and our business.
Although we have entered into the Business Combination Agreement and currently intend to consummate our initial business combination with Prize (as discussed in “Part I, Item 1.
Business” of this Annual Report), we have not yet consummated the Business Combination. Accordingly, many of the risks set forth below are relevant to the consummation of the Business Combination with Prize, and certain risks will be relevant if,
for any reason, we do not consummate the Business Combination with Prize and are required to seek a new target business with which to consummate our initial business combination. You should therefore carefully consider all of the risks described
below, despite the fact that we currently intend to consummate our initial business combination with Prize. Risks related to the business of Prize will be included in the proxy statement/prospectus filed in connection with seeking shareholder
approval of the Business Combination with Prize.
Summary Risk Factors
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We have no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
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Management has performed an analysis of our ability to continue as a going concern and has identified substantial doubt about our ability to
continue as a “going concern.”
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Our shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our shareholders do not support such a
combination.
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Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares for cash which no assurance can be given will put you in a better
future economic position.
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If we seek shareholder approval of our initial business combination, our sponsor and members of our management team have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote.
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As the number of SPACs evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive targets. This could increase the cost of our initial business combination and could even result
in our inability to find a target or to consummate an initial business combination.
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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.
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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
agreement or consummate an initial business combination.
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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 and 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.
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The requirement that we consummate an initial business combination within the Extension Period (or such later date as approved by our shareholders) 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 which could undermine our ability to complete our initial business combination on terms that would produce value for our
shareholders.
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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, the global economy, financial markets
or otherwise resulting from the conflict in Ukraine or any other geopolitical tensions.
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We may not be able to consummate our initial business combination with Prize within the Extension Period, in which case (unless such date is extended by our shareholders) we would cease all operations except for the purpose of winding up
and we would redeem our public shares and liquidate.
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We have identified a material a material weakness in our internal controls over financial reporting and if we are unable to remediate the material weakness in a timely manner or if we experience additional material weaknesses in the
future, we may not be able to accurately or timely report our financial condition or results of operations.
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If we seek shareholder approval of our initial business combination, our sponsor, initial shareholders, directors, officers, advisors and their affiliates may elect to purchase public shares or warrants, which may influence a vote on a
proposed business combination and reduce the public “float” of our Class A ordinary shares or public warrants.
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Provisions in our Articles 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.
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The warrants may become exercisable and redeemable for a security other than the Class A ordinary shares, and you will not have any information regarding such other security at this time.
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Unlike some other similarly structured blank check companies, our sponsor will receive additional Class A ordinary shares if we issue shares to consummate an initial business combination.
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We may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us, which may include acting as financial advisor in connection with an initial business combination or as placement
agent in connection with a related financing transaction. Our underwriters are entitled to receive deferred underwriting commissions that will be released from the Trust Account only upon a completion of an initial business combination.
These financial incentives may cause them to have potential conflicts of interest in rendering any such additional services to us after this offering, including, for example, in connection with the sourcing and consummation of an initial
business combination.
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We may reincorporate in another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements and we may not be able to enforce our legal
rights.
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After our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations in any such country. Accordingly, our results of
operations and prospects will be subject, to a significant extent, to the economic, political and social conditions and government policies, developments and conditions in the country in which we operate.
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The Business Combination may not be completed in a timely manner, or at all, which may adversely affect the price of our ordinary shares.
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We may not be able to satisfy the conditions required to consummate the Business Combination or the post-combination business may be undercapitalized following the Business Combination if we are unable to complete a PIPE (as defined
below) transaction.
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Our shareholders will experience immediate dilution as a consequence of the issuance of PubCo ordinary shares as consideration for the Business Combination and future sales of PubCo ordinary shares may cause the market for PubCo ordinary
shares to drop significantly, even if the business is doing well.
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Litigation or legal proceedings could expose any of Rose Hill, Prize and, following the consummation of the Business Combination, PubCo, to significant liabilities which may exceed estimates or assessments of the costs and may, in the
case of PubCo, be excluded from covered by insurance.
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We may be the target of securities class action and derivative lawsuits, which could expose Rose Hill or Prize to substantial costs and impact Rose Hill or Prizes’ liquidity and financial condition.
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We may be, or PubCo may become, a passive foreign investment company (“PFIC”), which could result in adverse U.S. federal income tax consequences to U.S. Holders.
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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.
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You will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a
loss.
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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. In addition, there can be no assurance that the
PubCo ordinary shares will be approved for listing on Nasdaq which may make it more difficult for investors to sell the securities or obtain accurate quotations as to the market value of such securities.
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You will not be entitled to protections normally afforded to investors of many other blank check companies.
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Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we have not consummated our initial business
combination within the required time period, our public shareholders may receive only approximately $10.89 per public share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
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If the net proceeds from the offering and the sale of the private placement warrants not being held in the Trust Account are insufficient to allow us to operate for the Extension Period (or such later date as may be approved by our
shareholders), it could limit the amount available to fund our search for a target business or businesses and our ability to complete our initial business combination, and we will depend on loans from our sponsor, its affiliates or members
of our management team to fund our search and to complete our initial business combination.
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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.
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Risks Relating to our Search for, Consummation of, or Inability to Consummate, a Business Combination and Post-Business Combination Risks
We are a 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 company with operations limited to pursuing and reviewing potential opportunities for our initial business combination. Because we lack an operating history, you have no basis upon which
to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. If we fail to complete our initial business combination, we will never generate any operating revenues.
Our shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even
though a majority of our shareholders do not support such a combination.
Although we currently intend to hold a shareholder vote to approve the Business Combination with Prize, we may choose not to hold a shareholder vote before we complete our initial business
combination if the business combination would not require shareholder approval under applicable law or stock exchange listing requirement. For instance, if we were seeking to acquire a target business where the consideration we were paying in the
transaction was all cash, we would typically not be required to seek shareholder approval to complete such a transaction. Except for as required by applicable law or stock exchange listing requirement, the decision as to whether we will seek
shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the
transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. Accordingly, we may complete our initial business combination even if holders of a majority of our issued and outstanding ordinary shares
do not approve of the business combination we complete.
Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for
cash.
At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of any target businesses. Since our board of directors may complete a
business combination without seeking shareholder approval, public shareholders may not have the right or opportunity to vote on the business combination, unless we seek such shareholder approval. Accordingly, your only opportunity to affect the
investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public
shareholders in which we describe our initial business combination.
If we seek shareholder approval of our initial business combination, our sponsor and members of our management team have agreed to vote in favor of such initial business
combination, regardless of how our public shareholders vote.
Our Articles provide that, if we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law,
which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. As of January 31, 2023, our sponsor owns, on an as-converted basis, 95% of our outstanding ordinary shares. Our sponsor
and members of our management team also may from time to time purchase Class A ordinary shares prior to our initial business combination. As a result, we would not need any of the 256,984 public shares issued and outstanding (assuming all issued
and outstanding shares are voted or assuming only the minimum number of shares representing a quorum are voted) to be voted in favor of an initial business combination in order to have such initial business combination approved. Accordingly, if we
seek shareholder approval of our initial business combination, the agreement by our sponsor and each member of our management team to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite
shareholder approval for such initial business combination.
The ability of our public shareholders to redeem their shares for cash may make it difficult for us to consummate an initial business combination.
We may seek to enter into a business combination transaction agreement with a prospective target (as is the case with the Business Combination Agreement) that requires as a closing condition that
we have a minimum net worth or a certain amount of cash. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business
combination. Furthermore, in no event, in connection with the approval of our initial business combination, will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then
become subject to the SEC’s “penny stock” rules). Consequently, if accepting all properly submitted redemption requests in connection with the approval of our initial business combination 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. Moreover,
there can be no assurance that a prospective target would amend or waive the closing condition as described above and if such closing condition is not satisfied, amended or waived then the proposed business combination agreement would not be
consummated.
The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business
combination or optimize our capital structure.
At the time we enter into an agreement for our initial business combination, we will not know how many shareholders may exercise their redemption rights, and therefore will need to structure the
transaction based on our expectations as to the number of shares that will be submitted for redemption. If a large number of shares are submitted for redemption, we may need to restructure the transaction to reserve a greater portion of the cash in
the Trust Account or arrange for additional third-party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit
our ability to complete the most desirable business combination available to us or optimize our capital structure. The amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed
in connection with an initial business combination. The per-share amount we will distribute to shareholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and, after such redemptions, the
amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting commissions.
The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business
combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount of cash at closing (as
is the case for the Business Combination with Prize), the probability that our initial business combination would be unsuccessful is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the
funds in the Trust Account until we liquidate the Trust Account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to the pro rata amount
per share in the Trust Account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your shares in the open
market.
The requirement that we consummate an initial business combination within the Extension Period (or such later date as approved by our shareholders) may give potential target
businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could
undermine our ability to complete our initial business combination on terms that would produce value for our shareholders.
Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must consummate an initial business combination within the Extension
Period. 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 then we may be unable to complete
our initial business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination
on terms that we would have rejected upon a more comprehensive investigation.
Our search for a business combination, and any target business with which we ultimately consummate a business combination (including the Business Combination with Prize), may be
materially adversely affected by coronavirus (COVID-19) pandemic and other macroeconomic conditions.
The COVID-19 pandemic has adversely affected the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could
be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target company’s
personnel, vendors and services providers. In addition, our ability to complete our initial business combination may be negatively impacted by general market conditions and volatility in the capital and debt markets. For example, the trailing
effects from COVID-19 could limit our ability to complete our initial business combination as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all. The
full extent to which COVID-19 impacts our search for a business combination, our ability to successfully consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, will
depend on future developments, which are highly uncertain and cannot be predicted.
If we are unable to consummate an initial business combination within the Extension Period (unless such date is extended by our shareholders) we would cease all operations
except for the purpose of winding up and we would redeem our public shares and liquidate.
If we are unable to find a suitable target business and consummate an initial business combination within the Extension Period, we would cease all operations except for the purpose of winding up
and we would redeem our public shares and liquidate. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein.
For example, the outbreak of COVID-19 continues both in the U.S. and globally and, while the extent of the impact of the outbreak on us will depend on future developments, it could limit our ability to complete our initial business combination,
including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all. Additionally, the outbreak of COVID-19 may negatively impact businesses we may seek to
acquire. If we have not consummated an initial business combination within such applicable time period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business
days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us
to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders
(including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and
dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. Our Articles provides that, if we wind up for any other reason prior to the consummation of
our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the Trust Account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands
law. In either such case, our public shareholders may receive only $10.89 per public share, or less than $10.89 per public share, on the redemption of their shares, and our warrants will expire worthless. See “—If third parties bring claims against
us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be less than $10.89 per public share” and other risk factors herein.
If we seek shareholder approval of our initial business combination, our sponsor, initial shareholders, directors, officers, advisors and their affiliates may elect to purchase
public shares or warrants, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A ordinary shares or public warrants.
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our
sponsor, directors, officers, advisors or their affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although
they are under no obligation to do so. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the Trust Account
will be used to purchase public shares or warrants in such transactions. In the event that our sponsor, directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who
have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The purpose of any such transaction could be to (i) vote in favor of the business
combination and thereby increase the likelihood of obtaining shareholder approval of the business combination, (ii) reduce the number of public warrants outstanding or vote such warrants on any matters submitted to the warrant holders for approval
in connection with our initial business combination or (iii) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,
where it appears that such requirement would otherwise not be met. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are
made, the public “float” of our Class A ordinary shares or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of
our securities on a national securities exchange. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.
If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for
tendering its shares, such shares may not be redeemed.
We will comply with the proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules,
if a shareholder fails to receive our proxy solicitation or tender offer materials, as applicable, such shareholder may not become aware of the opportunity to redeem its shares. In addition, the proxy solicitation or tender offer materials, as
applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly redeem or tender public shares. In the event
that a shareholder fails to comply with these procedures, its shares may not be redeemed.
You will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced
to sell your public shares or warrants, potentially at a loss.
Our public shareholders will be entitled to receive funds from the Trust Account only upon the earliest to occur of: (i) our completion of an initial business combination, and then only in
connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend
our Articles (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public
shares if we do not complete our initial business combination within the Extension Period (or such later date as may be approved by our shareholders) or (B) with respect to any other provision relating to the rights of holders of our Class A
ordinary shares, and (iii) the redemption of our public shares if we have not consummated an initial business within the Extension Period, subject to applicable law and as further described herein. Public shareholders who redeem their Class A
ordinary shares in connection with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the Trust Account upon the subsequent completion of an initial business combination or liquidation if we
have not consummated an initial business combination within the Extension Period, with respect to such Class A ordinary shares so redeemed. In no other circumstances will a public shareholder have any right or interest of any kind in the Trust
Account. Holders of warrants also will not have any right to the proceeds held in the Trust Account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a
loss.
If we are unable to maintain compliance with Nasdaq continued listing requirements, our ordinary shares may be delisted from the Nasdaq Capital Market, which would likely cause
the liquidity and market price of our ordinary shares to decline, limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
Our ordinary shares, Units and warrants are currently listed on the Nasdaq Capital Market. Nasdaq will consider suspending dealings in, or delisting, securities of an issuer that does not meet its
continued listing standards. If we cannot meet Nasdaq’s continued listing requirements, Nasdaq may delist our ordinary shares, which could have an adverse impact on us and the liquidity and market price of our ordinary shares.
On January 24, 2023, we received a notice (the “Notice”) from the Listing Qualifications Department of the Nasdaq (the “Staff”)
indicating that we are no longer in compliance with certain requirements of the Nasdaq Listing Rules set forth in (i) 5450(b)(2)(B), requiring a minimum of 1,100,000 Publicly Held Shares, (ii) Listing Rule 5450(b)(2)(A), requiring a minimum of
$50 million Market Value of Listed Securities, (iii) Listing Rule 5450(b)(2)(C), requiring a minimum of $15 million in Market Value of Publicly Held Shares and (iv) Listing Rule 5450(a)(2), requiring a minimum of 400 Total Holders (collectively,
the “Nasdaq Listing Rules”). In order to maintain our listing on Nasdaq, the Staff requested we submit a plan of compliance (the “Plan”) addressing how we intended to regain compliance with the Nasdaq Listing Rules. On February 7, 2023, we
submitted to the Staff the Plan, which was later supplemented with additional information on February 22, 2023.
On March 24, 2023, Nasdaq granted us an extension until July 24, 2023, by which time we must file with the SEC and Nasdaq a
public document showing that we have regained compliance with the Nasdaq Listing Rules. If we are unable to regain compliance with the Nasdaq Listing Rules by July 24, 2023, we may be subject to delisting procedures as set forth in the Nasdaq
continued listing rules.
We cannot assure you that we will be successful in regaining compliance with the Nasdaq continued listing requirements and 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 the Nasdaq prior to our initial business combination, we must regain and continue to
maintain certain financial, distribution and share price levels. Generally, we must maintain a minimum market capitalization (generally $35,000,000) and a minimum number of holders of our securities (generally 300 public holders).
Additionally, our Units will not be traded after the completion of our initial business combination and, in connection with our initial business combination, we will be required to demonstrate
compliance with the Nasdaq initial listing requirements, which are more rigorous than the Nasdaq continued listing requirements, in order to continue to maintain the listing of our securities on the Nasdaq.
If the Nasdaq delists any of our securities from trading on its exchange and we are not able to list such securities on another national securities exchange, we expect such securities could be
quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
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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.” Because we expect that our Units and eventually our Class A ordinary shares and warrants will be listed on the Nasdaq, our Units, Class A ordinary shares and warrants will qualify as covered securities under the statute.
Although the states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the
states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of
Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer
listed on the Nasdaq, our securities would not qualify as covered securities under the statute and we would be subject to regulation in each state in which we offer our securities.
You 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 our IPO and the sale of the private placement warrants 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 IPO 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, then,
pursuant to our Articles, 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 this offering, which we refer to as the “Excess Shares,” without our prior consent. However, we would not be restricting our shareholders’
ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and
you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business
combination. And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially at a loss.
Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business
combination. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.89 per public share, or less in certain circumstances, on the liquidation of our
Trust Account and our warrants will expire worthless.
If we do not consummate the Business Combination with Prize, we expect to encounter intense competition from other entities having a business objective similar to ours, including private investors
(which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well
established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other
resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire
with the net proceeds of this offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This
inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our
initial business combination in conjunction with a shareholder vote or via a tender offer. Target companies will be aware that this may reduce the resources available to us for our initial business combination. Any of these obligations may place us
at a competitive disadvantage in successfully negotiating a business combination. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.89 per public
share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless. See “—If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share
redemption amount received by shareholders may be less than $10.89 per public share” and other risk factors herein.
As the number of SPACs evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive targets. This could increase the cost
of our initial business combination and could even result in our inability to find a target or to consummate an initial business combination.
In recent years, the number of SPACs that have been formed has increased substantially. Many potential targets for SPACs have already entered into an initial business combination, and there are
still many SPACs seeking targets preparing for their initial business combination public offering, as well as many such companies currently in registration with the Securities and Exchange Commission. As a result, at times, fewer attractive targets
may be available, and it may require more time, more effort and more resources to identify a suitable target and to consummate an initial business combination.
In addition, because there are more SPACs seeking to enter into an initial business combination with available targets, the competition for available targets with attractive fundamentals or
business models may increase, which could cause targets companies to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions, or increases
in the cost of additional capital needed to close business combinations or operate targets post-business combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find and consummate an initial business
combination, and may result in our inability to consummate an initial business combination on terms favorable to our investors altogether.
If the net proceeds from our IPO and the sale of the private placement warrants not being held in the Trust Account are insufficient to allow us to operate during the Extension
Period (or such later date as may be approved by our shareholders), it could limit our ability to complete our initial business combination, and we will depend on loans from our sponsor, its affiliates or members of our management team to fund 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 until July 18, 2023, assuming that our initial business combination is not completed during that
time. We believe that the funds available to us outside of the Trust Account, together with funds available from loans from our sponsor, its affiliates or members of our management team, will be sufficient to allow us to operate for at least the
Extension Period; however, we cannot assure you that our estimate is accurate, and our sponsor, its affiliates or members of our management team are under no obligation to advance funds to us in such circumstances. Of the funds available to us, we
expect to use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters
of intent designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not
have any current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or
otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.
If we are required to seek additional capital, we would need to borrow funds from our sponsor or its affiliates, members of our management team or other third parties to operate or may be forced to
liquidate. None of our sponsor, members of our management team or their affiliates is under any obligation to us in such circumstances. Any such advances may be repaid only from funds held outside the Trust Account or from funds released to us upon
the completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of $1.25 per warrant at the option of the lender, which would be identical to the
private placement warrants. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor, its affiliates or members of our management team as we do not believe third parties will be
willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account. If we have not consummated our initial business combination within the required time period because we do not have sufficient
funds available to us, we will be forced to cease operations and liquidate the Trust Account. Consequently, our public shareholders may only receive an estimated $10.89 per public share, or possibly less, on our redemption of our public shares, and
our warrants will expire worthless. See “—If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be less than $10.89 per public share” and
other risk factors herein.
Subsequent to our completion of our initial business combination, we may be required to take write-downs or write-offs, restructure our operations or incur impairment or other
charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.
Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will identify all material issues with a particular target business,
that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to
later write down or write off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and
previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature
could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a
target business or by virtue of our obtaining post-combination debt financing. Accordingly, any holders who choose to retain their securities following the business combination could suffer a reduction in the value of their securities. Such holders
are unlikely to have a remedy for such reduction in value.
If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be less than
$10.89 per public share.
Our placing of funds in the Trust Account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers, prospective target businesses
and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public shareholders, such parties may not execute
such agreements, or even if they execute such agreements, they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as
well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement
waiving such claims to the monies held in the Trust Account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes
that such third party’s engagement would be significantly more beneficial to us than any alternative.
Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are
believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee
that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason. Upon redemption
of our public shares, if we have not consummated an initial business combination within the Extension Period (or such later date as may be approved by our shareholders), or upon the exercise of a redemption right in connection with our initial
business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the ten years following redemption. Accordingly, the per-share redemption amount received by public
shareholders could be less than the $10.89 per public share initially held in the Trust Account, due to claims of such creditors. Pursuant to the letter agreement the form of which was filed as an exhibit to our IPO prospectus, our sponsor has
agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a
transaction agreement, reduce the amounts in the Trust Account to below the lesser of (i) $10.89 per public share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account if less
than $10.89 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, provided that such liability will not apply
to any claims by a third party or prospective target business that executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under our indemnity of the underwriters of our IPO against certain
liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third-party
claims.
However, we have not asked our sponsor to reserve for such indemnification obligations nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity
obligations, and we believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against
the Trust Account, the funds available for our initial business combination and redemptions could be reduced to less than $10.89 per public share. In such event, we may not be able to complete our initial business combination, and you would receive
such lesser amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target
businesses.
Our directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the Trust Account available for
distribution to our public shareholders.
In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.89 per public share and (ii) the actual amount per public share held in the Trust Account as of the date
of the liquidation of the Trust Account if less than $10.89 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, and our sponsor asserts that it is
unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations.
While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment
and subject to their fiduciary duties may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to
our public shareholders may be reduced below $10.89 per public share.
We may not have sufficient funds to satisfy indemnification claims of our directors and executive officers.
We have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right, title, interest or claim of any
kind in or to any monies in the Trust Account and to not seek recourse against the Trust Account for any reason whatsoever (except to the extent they are entitled to funds from the Trust Account due to their ownership of public shares).
Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the Trust Account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and
directors may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers
and directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our
officers and directors pursuant to these indemnification provisions.
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.
Recently, the market for directors and officers liability insurance for SPACs has changed in ways adverse to us and our management team. Fewer insurance companies are offering quotes for directors
and officers liability coverage, the premiums charged for such policies have generally increased and the terms of such policies have generally become less favorable. These trends may continue into the future.
The increased cost and decreased availability of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate an initial business combination. In
order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public company, the post-business combination entity might need to incur greater expense, accept less favorable terms or both. However, any
failure to obtain adequate directors and officers liability insurance could have an adverse impact on the post-business combination’s ability to attract and retain qualified officers and directors.
In addition, even after we were to complete an initial business combination, our directors and officers could still be subject to potential liability from claims arising from conduct alleged to
have occurred prior to the initial business combination. As a result, in order to protect our directors and officers, the post-business combination entity may need to purchase additional insurance with respect to any such claims (“run-off
insurance”). The need for run-off insurance would be an added expense for the post-business combination entity, and could interfere with or frustrate our ability to consummate an initial business combination on terms favorable to our investors.
If, after we distribute the proceeds in the Trust Account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up
petition is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby
exposing the members of our board of directors and us to claims of punitive damages.
If, after we distribute the proceeds in the Trust Account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed
against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a
bankruptcy or insolvency court could seek to recover some or all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith,
thereby exposing itself and us to claims of punitive damages, by paying public shareholders from the Trust Account prior to addressing the claims of creditors.
If, before distributing the proceeds in the Trust Account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up
petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per-share amount that would otherwise be received by our shareholders in connection with
our liquidation may be reduced.
If, before distributing the proceeds in the Trust Account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed
against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy or insolvency law and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the
claims of our shareholders. To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on
which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors may
be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves and our company to claims, by paying public shareholders from the Trust Account prior to addressing the
claims of creditors. We cannot assure you that claims will not be brought against us for these reasons. We and our officers and directors who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium
account while we were unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable for a fine of $18,292 and imprisonment for five years in the Cayman Islands.
We may not hold an annual general meeting until after the consummation of our initial business combination.
In accordance with the Nasdaq corporate governance requirements, we are not required to hold an annual general meeting until one year after our first fiscal year end following our listing on the
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 appoint
directors and to discuss company affairs with management. Our board of directors is divided into three classes with only one class of directors being appointed in each year and each class (except for those directors appointed prior to our first
annual general meeting) serving a three-year term.
Because we are not limited to evaluating a target business in a particular industry sector, you will not be able to ascertain the merits or risks of any particular target
business’s operations until we provide a basis to evaluate the target business’s operations that we select for our initial business combination.
We may pursue business combination opportunities in any sector, except that we will not, under our Articles, be permitted to effectuate our initial business combination solely with another blank
check company or similar company with nominal operations. Until we provide a basis to evaluate a particular target business, you will not be able to ascertain the merits or risks of any particular target business’s operations, results of
operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine (including those of
Prize, should the Business Combination be consummated). For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and
operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess
all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will
adversely impact a target business. We also cannot assure you that an investment in our Units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target.
Accordingly, any holders who choose to retain their securities following the business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value.
If we are unable to consummate the Business Combination with Prize, we may seek acquisition opportunities in industries or sectors which may or may not be outside of our
management’s area of expertise.
If we are unable to consummate the Business Combination with Prize, we may consider a business combination outside of our management’s area of expertise if a business combination target is
presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company. Although our management will endeavor to evaluate the risks inherent in any particular business combination target, we cannot assure
you that we will adequately ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our Units will not ultimately prove to be less favorable to investors than a direct investment, if an opportunity
were available, in a business combination target. In the event we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the
information contained in this Annual Report regarding the areas of our management’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately ascertain or
assess all of the significant risk factors. Accordingly, any holders who choose to retain their securities following the business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for
such reduction in value.
Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business
combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and
guidelines.
Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business
combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business
that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of shareholders may exercise their
redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if shareholder approval of the transaction is required
by applicable law or stock exchange listing requirements, or we decide to obtain shareholder approval for business or other reasons, it may be more difficult for us to attain shareholder approval of our initial business combination if the target
business does not meet our general criteria and guidelines. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.89 per public share, or less in
certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
We are not required to obtain an opinion from an independent accounting or investment banking firm, and, consequently, you may have no assurance from an independent source that
the price we are paying for the business is fair to our shareholders from a financial point of view.
Unless we complete our initial business combination with an affiliated entity (which is not the case with Prize), we are not required to obtain an opinion from an independent investment banking
firm or another independent entity that commonly renders valuation opinions that the price we are paying is fair to our shareholders from a financial point of view. If no opinion is obtained, our shareholders will be relying on the judgment of our
board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our proxy solicitation or tender offer materials, as applicable, related to our
initial business combination.
Management has performed an analysis of our ability to continue as a going concern and has
identified substantial doubt about our ability to continue as a going concern. If we are unable to obtain sufficient additional funding or do not have access to capital, we may be required to terminate or significantly curtail our operations.
As of December 31, 2022, the Company had $96,119 in its operating bank accounts and $148,742,661 in cash and securities held in the
Trust Account to be used for an initial business combination or to repurchase its Class A ordinary shares in connection therewith. On January 12, 2023, in connection with the
Extension Proposal, the holders of 14,118,106 Class A ordinary shares originally issued in our IPO exercised their right to redeem their shares for an aggregate redemption amount of approximately $146,122,397, leaving an aggregate of
approximately $2.8 million in the Trust Account to be used for an initial business combination or to repurchase its Class A ordinary shares in connection therewith. Further, we expect to incur significant costs in pursuit of our acquisition
plans, and any such pursuit may not be successful.
If the Company is unable to raise additional capital, it may be
required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of an initial business combination and reducing overhead expenses. Our plans to raise capital and to consummate our initial business combination may not be successful. These factors, among others, raise substantial doubt about our ability to continue
as a going concern. Our plans to raise capital and to consummate our initial business combination may not be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern.
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 U.S. federal securities laws require that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma
financial statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may
be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting standards as issued by the International Accounting
Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These
financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and
complete our initial business combination within the prescribed timeframe.
Resources could be wasted in researching an acquisition that was not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with
another business. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.89 per public share, or less in certain circumstances, on the liquidation of
our Trust Account and our warrants will expire worthless.
We anticipate that the investigation of each specific additional 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. The costs incurred up to that point likely would not be recoverable. Furthermore, we may fail to complete our initial business
combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred, which could materially adversely affect subsequent attempts to locate and acquire or merge with
another business. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.89 per public share, or less in certain circumstances, on the liquidation of
our Trust Account and our warrants will expire worthless.
Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate a business combination, require substantial financial and management
resources, and increase the time and costs of completing an acquisition.
We are required under Section 404 of the Sarbanes-Oxley to evaluate and report on our system of internal controls. 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.
We have identified a material weakness in our internal control over financial reporting. If we are unable to remediate the material weakness in a timely manner or if we experience
additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls in the future, we may not be able to accurately or timely report our financial condition or results of operations.
In connection with the audit of the 2022 financial statements, we identified a material weakness in internal control over
financial reporting. As a result of this material weakness, management has concluded that our disclosure controls and procedures were not effective as of December 31, 2022, as further described in Item 9A.—Controls and Procedures. 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. The material weakness identified is related to the Company’s failure to maintain adequate controls over the classification and presentation of the statement of cash flows, specifically the classification
of the purchase of marketable securities as operating activities instead of investing activities.
If we are unable to remediate the material weakness in a timely manner or we identify additional material weaknesses, we may be unable to provide required
financial information in a timely and reliable manner and we may incorrectly report financial information. Likewise, if our financial statements are not filed on a timely basis, we could be subject to sanctions or investigations by the stock
exchange on which our ordinary shares are listed, the SEC or other regulatory authorities. The existence of a material weakness in internal control over financial reporting could adversely affect our reputation or investor perceptions of us,
which could have a negative effect on the trading price of our Class A ordinary shares, warrants or Units.
We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with
which a substantial majority of our shareholders do not agree.
Our Articles does not provide a specified maximum redemption threshold, except that in no event, in connection with the approval of our initial business combination, will we redeem our public
shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). As a result, we may be able to complete our initial business combination even though a
substantial majority of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder approval of our initial business combination and do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or their affiliates. In the event the aggregate cash consideration we
would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash
available to us, we will not complete the business combination or redeem any shares, all Class A ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing
instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our Articles or governing instruments in a manner that will make it easier for us to complete our initial business combination that our
shareholders may not support.
In order to effectuate a business combination, blank check companies have, in the recent past, amended various provisions of their charters and governing instruments, including their warrant
agreements. For example, blank check companies have amended the definition of business combination, increased redemption thresholds, extended the time to consummate an initial business combination and, with respect to their warrants, amended their
warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending our Articles will require at least a special resolution of our shareholders as a matter of Cayman Islands law, meaning the approval of holders of
at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company, and amending our warrant agreement will require a vote of holders of at least 65% of the public warrants and, solely with respect to any amendment
to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 65% of the number of the then outstanding private placement warrants. In addition, our Articles will require us
to provide our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our Articles (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary
shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the Extension Period (or such later date as may
be approved by our shareholders) or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. To the extent any of such amendments would be deemed to fundamentally change the nature of any of the
securities offered through this registration statement, we would register, or seek an exemption from registration for, the affected securities.
The provisions of our Articles that relate to the rights of holders of our Class A ordinary shares (and corresponding provisions of the agreement governing the release of funds
from our Trust Account) may be amended with the approval of a special resolution, which requires the approval of the holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company, which is a lower
amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our Articles 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 that prohibits the amendment of certain of its provisions, including those which relate to the rights of a company’s shareholders,
without approval by a certain percentage of the company’s shareholders. In those companies, amendment of these provisions typically requires approval by between 90% and 100% of the company’s shareholders. Our Articles provides that any of its
provisions related to the rights of holders of our Class A ordinary shares (including the requirement to deposit proceeds of this offering and the private placement of warrants into the Trust Account and not release such amounts except in specified
circumstances, and to provide redemption rights to public shareholders as described herein) may be amended if approved by special resolution, meaning holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of
the company, and corresponding provisions of the trust agreement governing the release of funds from our Trust Account may be amended if approved by holders of at least 65% of our ordinary shares; provided
that the provisions of our Articles governing the appointment or removal of directors prior to our initial business combination may only be amended by a special resolution passed by not less than two-thirds of our ordinary shares who attend and
vote at our general meeting which shall include the affirmative vote of a simple majority of our Class B ordinary shares. Our sponsor and its permitted transferees, if any, who will collectively beneficially own, on an as-converted basis, 20% of
our Class A ordinary shares upon the closing of our initial business combination, will participate in any vote to amend our Articles 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 Articles which govern our pre-business combination behavior more easily than some other blank check companies, and this may increase our ability to complete a business combination with which you do not agree. Our
shareholders may pursue remedies against us for any breach of our Articles.
Our sponsor, officers and directors have agreed, pursuant to agreements with us, that they will not propose any amendment to our Articles (A) that would modify the substance or timing of our
obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination
within the Extension Period (or such later date as may be approved by our shareholders) or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, unless we provide our public shareholders with the
opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the
Trust Account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described herein. Our shareholders are not parties to, or third-party
beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, executive officers or directors for any breach of these agreements. As a result, in the event of a breach, our shareholders would
need to pursue a shareholder derivative action, subject to applicable law.
We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to
restructure or abandon our initial business combination. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.89 per public share, or less in certain
circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
Although we believe that the net proceeds from our IPO and the sale of the private placement warrants will be sufficient to allow us to complete our initial business combination, we may not be able
to ascertain the capital requirements because of the obligation to redeem for cash an unknown number of shares from shareholders who elect redemption in connection with our initial business combination. If the net proceeds from our IPO and the sale
of the private placement warrants prove to be insufficient because of the obligation to redeem for cash a significant number of shares from shareholders who elect redemption in connection with our initial business combination or the terms of
negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you that such financing will be
available on acceptable terms, if at all. The current economic environment may make it difficult for companies to obtain acquisition financing. To the extent that additional financing proves to be unavailable when needed to complete our initial
business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. If we have not consummated our initial business combination within
the required time period, our public shareholders may receive only approximately $10.89 per public share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless. In addition, even if we do
not need additional financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on
the continued development or growth of the target business. None of our sponsor, officers, directors or shareholders is required to provide any financing to us in connection with or after our initial business combination.
We may seek business combination opportunities with a high degree of complexity that require significant operational improvements, which could delay or prevent us from achieving
our desired results.
If we do not consummate the Business Combination with Prize, we may seek business combination opportunities with large, highly complex companies that we believe would benefit from operational
improvements. While we intend to implement such improvements, to the extent that our efforts are delayed or we are unable to achieve the desired improvements, the business combination may not be as successful as we anticipate.
To the extent we complete our initial business combination with a large, complex business or entity with a complex operating structure, we may also be affected by numerous risks inherent in the
operations of the business with which we combine, which could delay or prevent us from implementing our strategy. Although our management team will endeavor to evaluate the risks inherent in a particular target business and its operations, we may
not be able to properly ascertain or assess all of the significant risk factors until we complete our business combination. If we are not able to achieve our desired operational improvements, or the improvements take longer to implement than
anticipated, we may not achieve the gains that we anticipate. Furthermore, some of these risks and complexities may be outside of our control and leave us with no ability to control or reduce the chances that those risks and complexities will
adversely impact a target business. Such combination may not be as successful as a combination with a smaller, less complex organization.
We may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial business combination with a target business
whose management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management may be limited due to a
lack of time, resources or information. Our assessment of the capabilities of the target business’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the
target business’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any holders who choose
to retain their securities following the business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value.
We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial
condition and thus negatively impact the value of our shareholders’ investment in us.
Although we have no commitments as of the date of this Annual Report to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to
complete our initial business combination. We and our officers and directors 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 Class A 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 Class A 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 only be able to complete one business combination with the proceeds of the offering and the sale of the private placement warrants, which will cause us to be solely
dependent on a single business that may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability.
The net proceeds from our IPO and the sale of the private placement warrants, as of January 31, 2023 provided us with $2.8 million (after giving effect to the redemptions by the Company’s
shareholders in connection with the vote to approve the Extension Proposal) that we may use to complete our initial business combination. We may effectuate our initial business combination with a single-target business or multiple-target businesses
simultaneously or within a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business because of various factors, including the existence of complex accounting issues and the
requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial
business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible
spreading of risks or offsetting of losses, unlike other entities that may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may
be solely dependent upon the performance of a single business, property or asset; or dependent upon the development or market acceptance of a single or limited number of products, processes or services.
This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which
we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and
give rise to increased costs and risks that could negatively impact our operations and profitability.
As at the date of this Annual Report, we only intend to effectuate a business combination with a single target business, Prize. If however, we determine to simultaneously acquire
several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more
difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations
and due diligence (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to
adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial business combination with a private company (such as Prize) 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, including Prize, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information and certain information relating to projections and forecasts, which are
inherently based on various estimates and assumptions that are subject to the judgment of those preparing them, which may result in a business combination with a company that is less profitable than as we suspected, if at all.
Risks Relating to our Securities
The securities in which we invest the funds held in the Trust Account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that
the per-share redemption amount received by public shareholders may be less than $10.89 per share.
The proceeds held in the Trust Account may only be invested 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 Articles, our public shareholders are entitled to receive their pro rata share of the proceeds held in the
Trust Account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000 of interest). Negative interest rates could reduce the value of the assets held in trust
such that the per-share redemption amount received by public shareholders may be less than $10.89 per share.
If we were deemed to be an investment company for purposes of the Investment Company Act, our activities would be severely restricted, we would be required to institute burdensome compliance
requirement and we may be forced to abandon our efforts to complete an initial business combination and instead be required to liquidate the Company. To mitigate the risk that we might be deemed to be an investment company for purposes of the
Investment Company Act, we may, at any time, have to liquidate the securities held in the Trust Account and instead hold all funds in the Trust Account in cash until the earlier of the consummation of our initial business combination or our
liquidation. Following any such liquidation, we will likely receive minimal interest, if any, on the funds held in the Trust Account, which would reduce the dollar amount that our public shareholders would receive upon any redemption or
liquidation of the Company.
On March 30, 2022, the SEC issued proposed rules (the “SPAC Rule Proposals”), which include proposals relating to, among other matters, the circumstances in which SPACs such as us could potentially
be subject to the Investment Company Act and the regulations thereunder. The SPAC Rule Proposals would provide a safe harbor for SPACs satisfying certain criteria from the definition of “investment company” under Section 3(a)(1)(A) of the
Investment Company Act, provided that a SPAC satisfies certain criteria, including a limited time period to announce and complete a de-SPAC transaction. Specifically, to comply with the safe harbor, the SPAC Rule Proposals would require a company
to file a report on Form 8-K announcing that it has entered into an agreement with a target company for an initial business combination no later than 18 months after the effective date of the registration statement of our IPO (as defined below)
(the “IPO Registration Statement”). The company would then be required to complete its initial business combination no later than 24 months after the effective date of the IPO Registration Statement.
Given that the SPAC Rule Proposals have not yet been adopted, there is currently uncertainty concerning the applicability of the Investment Company Act to a SPAC, including a company like ours,
that may not complete its initial business combination within 24 months after the effective date of its IPO Registration Statement. As a result, it is possible that a claim could be made that we have been operating as an unregistered investment
company. If we were deemed to be an investment company for purposes of the Investment Company Act, our activities would be severely restricted, we would be subject to additional regulatory burdens and expenses and, unless we are able to modify our
activities so that we would not be deemed an investment company, we might be forced to abandon our efforts to complete an initial business combination and instead be required to liquidate the Company. If we are required to liquidate the Company,
our investors would not be able to realize the benefits of owning stock in a successor operating business, including the potential appreciation in the value of our shares and warrants following such a transaction, and our warrants would expire
worthless.
The funds in the Trust Account have, since our IPO, been held only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds investing solely in U.S.
government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. However, to mitigate the risk of us being deemed to have been operating as an unregistered investment company (including under the
subjective test of Section 3(a)(1)(A) of the Investment Company Act) and thus subject to regulation under the Investment Company Act, we may, at any time, and we expect that we will, on or prior to the 24-month anniversary of the effective date of
the IPO Registration Statement, instruct Continental Stock Transfer & Trust Company, the trustee with respect to the Trust Account, to liquidate the U.S. government treasury obligations or money market funds held in the Trust Account and
thereafter to hold all funds in the Trust Account in cash until the earlier of consummation of our initial business combination or liquidation. As a result, following such liquidation, we will likely receive minimal interest, if any, on the funds
held in the Trust Account, which would reduce the dollar amount our public shareholders would receive upon any redemption of their shares or liquidation of the Company.
In addition, even prior to the 24-month anniversary of the effective date of our IPO Registration Statement, we may be deemed to be an investment company. The longer that the funds in the Trust
Account are held in short-term U.S. government treasury obligations or in money market funds invested exclusively in such securities, even prior to such 24-month anniversary, the greater the risk that we may be considered an unregistered investment
company, in which case we may be required to liquidate the Company. Accordingly, we may determine, in our discretion, to liquidate the securities held in the Trust Account at any time, even prior to the 24-month anniversary of the effective date of
our IPO Registration Statement, and instead hold all funds in the Trust Account in cash, which would further reduce the dollar amount our public shareholders would receive upon any redemption of their shares or liquidation of the Company.
The value of the founder shares following completion of our initial business combination is likely to be substantially higher than the nominal price paid for them, even if the
trading price of our ordinary shares at such time is substantially less than $10.00 per share.
Even if the trading price of our ordinary shares was as low as approximately $1.29 per share, the value of the founder shares would be equal to the sponsor’s initial investment in us. As a result, our sponsor is
likely to be able to recoup its investment in us and make a substantial profit on that investment, even if our public shares have lost significant value. Accordingly, our management team, which owns interests in our sponsor, may have an economic
incentive that differs from that of the public shareholders to pursue and consummate an initial business combination rather than to liquidate and to return all of the cash in the trust to the public shareholders, even if that business combination
were with a riskier or less-established target business. For the foregoing reasons, you should consider our management team’s financial incentive to complete an initial business combination when evaluating whether to redeem your shares prior to
or in connection with the initial business combination.
We may issue additional Class A ordinary shares or preference shares to complete our initial business combination or under an
employee incentive plan after the completion of our initial business combination. We may also issue Class A ordinary shares upon the conversion of the founder shares at a ratio greater than one-to-one at the time of our initial business
combination as a result of the anti-dilution provisions contained in our Articles. Any such issuances would dilute the interest of our shareholders and likely present other risks.
Our Articles authorizes the issuance of up to 200,000,000 Class A ordinary shares, par value $0.0001 per share, 20,000,000 Class B ordinary shares, par value $0.0001 per share, and 2,000,000
preference shares, par value $0.0001 per share. As of January 31, 2023, there were 183,750,000 and 14,968,750 authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance which amount does not
take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the Class B ordinary shares, if any. The Class B ordinary shares will automatically convert into Class A ordinary shares
(which such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the Trust Account if we fail to consummate an initial business combination) at the time of our
initial business combination or earlier at the option of the holders thereof as described herein and in our Articles. As of December 31, 2022, there are no preference shares issued and outstanding.
We may issue a substantial number of additional Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after the completion of
our initial business combination. We may also issue Class A ordinary shares in connection with our redeeming the warrants or upon conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business
combination as a result of certain anti-dilution provisions contained in such securities.
However, our Articles provides, among other things, that prior to or in connection with our initial business combination, we may not issue additional shares that would entitle the holders thereof
to (i) receive funds from the Trust Account or (ii) vote on any initial business combination or on any other proposal presented to shareholders prior to or in connection with the completion of an initial business combination. These provisions of
our Articles, like all provisions of our Articles, may be amended with a shareholder vote. The issuance of additional ordinary or preference shares:
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may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater
than one-to-one basis upon conversion of the Class B ordinary shares;
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may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares;
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could cause a change in control if a substantial number of Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or
removal of our present officers and directors;
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may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us;
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may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants; and
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may not result in adjustment to the exercise price of our warrants.
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We have not registered the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such
registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants except on a cashless basis and potentially causing such warrants to expire worthless.
We have not registered the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the warrant
agreement, we have agreed that, as soon as practicable, but in no event later than 20 business days after the closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a registration statement
covering the issuance of such shares, and we will use our commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of our initial business combination and to maintain the effectiveness of such
registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed. We cannot assure you that we will be able to do so if, for example, any facts or events arise that 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, 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. Additionally, if we call the
warrants for redemption, our management will have the option to require all holders that wish to exercise warrants to do so on a cashless basis. In the event of an exercise on a cashless basis, a holder would pay the warrant exercise price by
surrendering the warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the difference between the exercise
price of the warrants and the “fair market value” (as defined in the next sentence) by (y) the fair market value. The “fair market value” is the average last reported sale price of the Class A ordinary shares for the 10 trading days ending on the
third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable. Exercising the warrants on a cashless basis could have the
effect of reducing the potential “upside” of the holder’s investment in our company because the warrant holder will hold a smaller number of Class A ordinary shares upon a cashless exercise of the warrants they hold. In no event will we be required
to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities laws and no exemption
is available. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may
have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the Class A ordinary shares included in the units. There may be a
circumstance where an exemption from registration exists for holders of our private placement warrants to exercise their warrants while a corresponding exemption does not exist for holders of the public warrants included as part of units sold in
this offering. In such an instance, our sponsor and its permitted transferees (which may include our directors and officers) would be able to exercise their warrants and sell the ordinary shares underlying their warrants while holders of our public
warrants would not be able to exercise their warrants and sell the underlying ordinary shares. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying Class
A ordinary shares for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise their warrants.
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 were 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 correcting 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 our IPO prospectus, or defective provision (ii) amending the provisions relating to cash dividends on ordinary shares as contemplated by and in accordance with the warrant agreement or (iii) adding or changing any
provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of
the warrants, provided that the approval by the holders of at least 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.
Our warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum
for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.
Our warrant agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the
Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the
exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
Notwithstanding the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which
the federal district courts of the United States of America are the sole and exclusive forum. Accordingly, our exclusive forum provision will not relieve us of our duties to comply with the federal securities laws and the rules and regulations
thereunder, and holders of our warrants will not be deemed to have waived our compliance with these laws, rules and regulations. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have
notice of and to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope the forum provisions of the warrant agreement, is filed in a court other than a court of the State of
New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and
federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such
enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits.
Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such
matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.
We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under
the heading “Description of Securities—Warrants—Public Shareholders’ Warrants—Anti-Dilution Adjustments”) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for
sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants could force you to (i) exercise
your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal
redemption price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the market value of your warrants.
None of the private placement warrants will be redeemable by us so long as they are held by our sponsor, Cantor, CCM or their permitted transferees.
Our warrants may have an adverse effect on the market price of our Class A ordinary shares and make it more difficult to effectuate our initial business combination.
We have issued warrants to purchase 7,187,500 Class A ordinary shares as part of the units sold in our IPO and have issued in a private placement an aggregate of 6,100,000 private placement
warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, subject to adjustment. In addition, if the sponsor, its affiliates or a member of our management team makes any working capital loans, it may convert up to
$1,500,000 of such loans into up to an additional 1,200,000 private placement warrants, at the price of $1.25 per warrant.
To the extent we issue ordinary shares for any reason, including to effectuate a business combination, the potential for the issuance of a substantial number of additional Class A ordinary shares
upon exercise of these warrants could make us a less attractive acquisition vehicle to a target business. Such warrants, when exercised, will increase the number of issued and outstanding Class A ordinary shares and reduce the value of the Class A
ordinary shares issued to complete the business transaction. Therefore, our warrants may make it more difficult to effectuate a business transaction or increase the cost of acquiring the target business.
Because each unit contains one-half of one redeemable warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
Each unit contains one-half of one redeemable warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole units will trade. If,
upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of Class A ordinary shares to be issued to the warrant holder. This is
different from other special purpose acquisition companies whose units include one ordinary share and one whole warrant to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect
of the warrants upon the completion of a business combination since the warrants will be exercisable in the aggregate for one-half of the number of shares compared to units that each contain a whole warrant to purchase one whole share, thus making
us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if a unit included a warrant to purchase one whole share.
A provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.
Unlike most blank check companies, if (i) we issue additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business
combination at a Newly Issued Price of less than $9.20 per ordinary share, (ii) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial
business combination on the date of the consummation of our initial business combination (net of redemptions), and (iii) the Market Value is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be
equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger prices will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
This may make it more difficult for us to consummate an initial business combination with a target business.
Our warrants are accounted for as a warrant liability and were recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may have
an adverse effect on the market price of our Class A ordinary shares or may make it more difficult for us to consummate an initial business combination.
We have issued an aggregate of 13,287,500 warrants in connection with our IPO (comprised of the 7,187,500 warrants included in the units and the 6,100,000 private placement warrants). We accounted
for these as a warrant liability and were recorded at fair value upon issuance with any changes in fair value each period reported in earnings as determined by us based upon a valuation report obtained from our independent third party valuation
firm. The impact of changes in fair value on earnings may have an adverse effect on the market price of our Class A ordinary shares. In addition, potential targets may seek a SPAC that does not have warrants that are accounted for as a warrant
liability, which may make it more difficult for us to consummate an initial business combination with a target business.
The determination of the offering price of our units and the size of the IPO is more arbitrary than the pricing of securities and size of an offering of an operating company in
a particular industry. You may have less assurance, therefore, that the offering price of our units properly reflects the value of such units than you would have in a typical offering of an operating company.
Prior to our IPO there was no public market for any of our securities. The public offering price of the units and the terms of the warrants were negotiated between us and the underwriters. In
determining the size of this offering, management held customary organizational meetings with the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount the underwriters
believed they reasonably could raise on our behalf. Factors considered in determining the size of our IPO, prices and terms of the units, including the Class A ordinary shares and warrants underlying the units, include:
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the history and prospects of companies whose principal business is the acquisition of other companies;
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prior offerings of those companies;
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our prospects for acquiring an operating business at attractive values;
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a review of debt-to-equity ratios in leveraged transactions;
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an assessment of our management and their experience in identifying operating companies;
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general conditions of the securities markets at the time of this offering; and
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other factors as were deemed relevant.
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Although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities of an operating company in a particular industry since we have no
historical operations or financial results.
We may issue our shares to investors in connection with our initial business combination at a price that is less than the prevailing market price of our shares at that time.
In connection with our initial business combination, we may issue shares to investors in a private placement transaction (“PIPE”) at a price of $10.89 per share or which approximates the per-share
amounts in our Trust Account at such time, which is generally approximately $10.89. The purpose of such issuances will be to enable us to provide sufficient liquidity to the post-business combination entity. The price of the shares we issue may
therefore be less, and potentially significantly less, than the market price for our shares at such time.
A market for our securities may not continue, which would adversely affect the liquidity and price of our securities.
The price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions, including as a result of the COVID-19 outbreak.
Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.
Provisions in our Articles 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 Articles contains provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests. These provisions include a staggered board of
directors and the ability of the board of directors to designate the terms of and issue new series of preference shares, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of
a premium over prevailing market prices for our securities.
Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the
U.S. federal courts may be limited.
We are an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon our directors
or executive officers, or enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs will be governed by our Articles, the Companies Act (as the same may be supplemented or amended from time to time) and the common law of the Cayman Islands. We will also be
subject to the federal securities laws of the United States. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to
a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedents in the Cayman Islands as well as from English common law, the decisions of whose
courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under
statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully
developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a federal court of the United States.
We have been advised by our Cayman Islands legal counsel that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States
predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability
provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of
judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a
competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final
and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a
kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands court may stay enforcement
proceedings if concurrent proceedings are being brought elsewhere.
As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or
controlling shareholders than they would as public shareholders of a United States company.
If we have not consummated an initial business combination within the Extension Period (or such later date as may be approved by our shareholders), our public shareholders may
be forced to wait beyond such date before redemption from our Trust Account.
If we have not consummated an initial business combination within the Extension Period, the proceeds then on deposit in the Trust Account, including interest earned on the funds held in the Trust
Account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. Any redemption of public
shareholders from the Trust Account will be effected automatically by function of our Articles prior to any voluntary winding up. If we are required to wind up, liquidate the Trust Account and distribute such amount therein, pro rata, to our public
shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Act. In that case, investors may be forced to wait beyond the Extension Period before the
redemption proceeds of our Trust Account become available to them and they can 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 Articles, and only then in cases where investors have sought to redeem their Class A ordinary shares. Only upon our
redemption or any liquidation will public shareholders be entitled to distributions if we do not complete our initial business combination and do not amend certain provisions of our Articles. Our Articles provides that, if we wind up for any other
reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the Trust Account as promptly as reasonably possible but not more than ten business days thereafter,
subject to applicable Cayman Islands law.
The warrants may become exercisable and redeemable for a security other than the Class A ordinary shares, and you will not have any information regarding such other security at
this time.
In certain situations, including if we are not the surviving entity in our initial business combination, the warrants may become exercisable for a security other than the Class A ordinary shares.
As a result, if the surviving company redeems your warrants for securities pursuant to the warrant agreement, you may receive a security in a company of which you do not have information at this time. Pursuant to the warrant agreement, the
surviving company will be required to use commercially reasonable efforts to register the issuance of the security underlying the warrants within 20 business days of the closing of an initial business combination.
The grant of registration rights to our sponsor 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.
Our sponsor and its permitted transferees can demand that we register the resale of the Class A ordinary shares into which founder shares are convertible, the private placement warrants and the
Class A ordinary shares issuable upon exercise of the private placement warrants, and warrants that may be issued upon conversion of working capital loans and the Class A ordinary shares issuable upon conversion of such warrants. The registration
rights will be exercisable with respect to the founder shares and the private placement warrants and the Class A ordinary shares issuable upon exercise of such private placement warrants. We will bear the costs of registering these securities. The
registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A ordinary shares. In addition, the existence of the registration rights may make
our initial business combination more costly or difficult to conclude. This is because the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative
impact on the market price of our securities that is expected when the securities owned by our sponsor or its permitted transferees are registered for resale.
We may reincorporate or become a tax resident in another jurisdiction in connection with our initial business combination and such reincorporation or change in tax residency may
result in taxes imposed on shareholders and warrant holders.
We may, in connection with our initial business combination and subject to requisite shareholder approval under the Companies Act, reincorporate in the jurisdiction in which the target company or
business is located or in another jurisdiction. Tax structuring considerations are complex, the relevant facts and law are uncertain and may change, and we may prioritize commercial and other considerations over tax considerations. The transaction
may require a shareholder or warrant holder to recognize taxable income in the jurisdiction in which the shareholder or warrant holder is a tax resident or in which its members are resident if it is a tax transparent entity. We do not intend to
make any cash distributions to shareholders or warrant holders to pay such taxes. Shareholders or warrant holders may be subject to withholding taxes or other taxes with respect to their ownership of us after the reincorporation. In addition,
regardless of whether we reincorporate in another jurisdiction, we could be treated as tax resident in the jurisdiction in which the partner company or business is located, which could result in adverse tax consequences to us (e.g., taxation on our
worldwide income in such jurisdiction) and to our shareholders or warrant holders (e.g., withholding taxes on dividends and taxation of disposition gains).
Risks Relating to our Sponsor and Management Team
Past performance by our management team or their respective affiliates may not be indicative of future performance of an investment in us.
Information regarding performance is presented for informational purposes only. Any past experience or performance of our management team or their respective affiliates is not a guarantee of either
(i) our ability to successfully identify and execute a transaction or (ii) success with respect to any business combination that we may consummate. You should not rely on the historical record of our management team or their respective affiliates
as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. Our management has no experience in operating special purpose acquisition companies.
Our ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom
may join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot
presently be ascertained. Although some of our key personnel may remain with the target business in senior management, director or advisory positions following our initial business combination, it is likely that some or all of the management of the
target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals
may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination, and a particular business
combination may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of
interest in determining whether a particular business combination is the most advantageous.
Our key personnel may be able to remain with our company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in
connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our
securities for services they would render to us after the completion of the business combination. Such negotiations also could make such key personnel’s retention or resignation a condition to any such agreement. The personal and financial
interests of such individuals may influence their motivation in identifying and selecting a target business.
The officers and directors of an acquisition candidate may resign upon the completion of our initial business combination. The loss of a business combination target’s key
personnel could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain member 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.
Certain of our executive officers and directors may allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to
devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Certain of our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between
our operations and our search for a business combination and their other businesses. Our executive officers may be engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are
not obligated to contribute any specific number of hours per week to our affairs. Our independent directors also serve as officers and board members for other entities. If our executive officers’ and directors’ other business affairs require them
to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business
combination. For a complete discussion of our executive officers’ and directors’ other business affairs, please see “Management—Officers and Directors.”
Our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities, including another blank
check company, and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
We are engaged in the business of identifying and combining with one or more businesses or entities. Each of our officers and directors presently has, and any of them in the future may have
additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity, subject to his or her fiduciary duties under Cayman
Islands law. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to
another entity prior to its presentation to us, subject to their fiduciary duties under Cayman Islands law.
In addition, our sponsor, officers and directors may in the future become affiliated with other blank check companies that may have acquisition objectives that are similar to ours. Accordingly,
they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to such other blank check
companies prior to its presentation to us, subject to our officers’ and directors’ fiduciary duties under Cayman Islands law. Our Articles provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or
an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or
expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other, unless such opportunity is expressly
offered to such person in their capacity as a director or officer of our company and the opportunity is one we are permitted to complete on a reasonable basis.
For a complete discussion of our executive officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see “Management—Officers and
Directors,” “Management—Conflicts of Interest” and “Certain Relationships and Related Party Transactions.”
From time to time, we and members of our management team may be subject to legal proceedings, regulatory disputes, and governmental inquiries that could cause us to incur
significant expenses, divert our management’s attention, and materially harm our financial condition.
From time to time, we may be subject to claims, lawsuits, government investigations, and other proceedings involving competition and antitrust, securities, tax, commercial disputes, and other
matters that could adversely affect our financial condition. Litigation and regulatory proceedings may be protracted and expensive, and the results are difficult to predict. Additionally, such litigation and regulatory proceedings require a great
deal of financial resources and attention from us and our management team. Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, or penalties and fines, and could
negatively affect our ability to identify and complete an initial business combination and may have an adverse effect on the price of our securities.
Members of our management team have been involved in a wide variety of businesses. Such involvement has, and may lead to, media coverage and public awareness. As a result, members of our management
team and the related companies may from time to time be involved in civil disputes or governmental investigations unrelated to our business. Any such claims or investigations may be detrimental to our reputation and could negatively affect our
ability to identify and complete an initial business combination and may have an adverse effect on the price of our securities.
Our executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any
investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or
executive officers. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their
interests and ours.
The personal and financial interests of our officers and directors may influence their motivation in timely identifying and selecting a target business and completing a business combination.
Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are
appropriate and in our shareholders’ best interest. If this were the case, it would be a breach of their fiduciary duties to us as a matter of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing
on our shareholders’ rights. However, we might not ultimately be successful in any claim we may make against them for such reason.
We may engage one or more of our underwriters from our IPO or one of their respective affiliates to provide additional services to us, which may include acting as financial
advisor in connection with an initial business combination or as placement agent in connection with a related financing transaction. Our underwriters from our IPO are entitled to receive deferred underwriting commissions that will be released from
the Trust Account only upon a completion of an initial business combination. These financial incentives may cause them to have potential conflicts of interest in rendering any such additional services to us after this offering, including, for
example, in connection with the sourcing and consummation of an initial business combination.
We may engage one or more of our underwriters from our IPO or one of their respective affiliates to provide additional services to us, including, for example, identifying potential targets,
providing financial advisory services, acting as a placement agent in a private offering or arranging debt financing transactions. We may pay such underwriter or its affiliate fair and reasonable fees or other compensation that would be determined
at that time in an arm’s length negotiation; provided that no agreement will be entered into with any of the underwriters or their respective affiliates and no fees or other compensation for such services will be paid to any of the underwriters or
their respective affiliates prior to the date that is 60 days from the date of our IPO, unless such payment would not be deemed underwriters’ compensation in connection with the offering. The underwriters from our IPO are also entitled to receive
deferred underwriting commissions that are conditioned on the completion of an initial business combination. The underwriters’ or their respective affiliates’ financial interests tied to the consummation of a business combination transaction may
give rise to potential conflicts of interest in providing any such additional services to us, including potential conflicts of interest in connection with the sourcing and consummation of an initial business combination.
We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, executive officers,
directors or initial shareholders, which may raise potential conflicts of interest.
In light of the involvement of our sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, executive officers,
directors or initial shareholders. Our directors also serve as officers and board members for other entities, including, without limitation, those described under “Management—Conflicts of Interest.” Our sponsor, officers and directors may sponsor,
form or participate in other blank check companies similar to ours during the period in which we are seeking an initial business combination. Such entities may compete with us for business combination opportunities. Despite our agreement to obtain
an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions regarding the fairness to our company from a financial point of view of a business combination with one or more domestic
or international businesses affiliated with our sponsor, executive officers, directors or initial shareholders, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to
our public shareholders as they would be absent any conflicts of interest.
Since our sponsor, executive officers and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to
public shares they may acquire during or after this offering), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
On June 15, 2021, our sponsor paid $25,000, or approximately $0.005 per share, in consideration of 5,031,250 Class B ordinary shares, par value $0.0001 (which amount of Class B ordinary shares had
been adjusted pursuant to an Amended and Restated Subscription Agreement by and between us and our sponsor, dated August 25, 2021). Prior to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or
intangible. The per-share price of the founder shares was determined by dividing the amount contributed to the company by the number of founder shares issued. The founder shares will be worthless if we do not complete an initial business
combination. In addition, our sponsor, Cantor and CCM have committed, pursuant to a written agreement, to purchase an aggregate of 6,100,000 private placement warrants (4,950,000 private placement warrants by our sponsor, 805,000 private placement
warrants by Cantor and 345,000 private placement warranty by CCM, if the underwriters’ over-allotment option is exercised in full), each exercisable to purchase one Class A ordinary share at $11.50 per share, subject to adjustment, at a price of
$1.25 per warrant in a private placement that closed simultaneously with our IPO. If we do not consummate an initial business within the Extension Period (or such later date as may be approved by our shareholders), the private placement warrants
will expire worthless. The personal and financial interests of our executive officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and
influencing the operation of the business following the initial business combination. This risk may become more acute as the 21-month anniversary of the closing of our IPO nears, which is the deadline for our consummation of an initial business
combination.
Our management may not be able to maintain control of a target business after our initial business combination. Upon the loss of control of a target business, new management may
not possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination so that the post-business combination company in which our public shareholders own shares will own less than 100% of the equity interests or assets
of a target business, but we will only complete such business combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the
target business sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-business combination company owns
50% or more of the voting securities of the target, our shareholders prior to our initial business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us
in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new Class A ordinary shares in exchange for all of the outstanding capital stock, shares or other entity interests of a target. In
this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new Class A ordinary shares, our shareholders immediately prior to such transaction could own less than a majority of our
outstanding Class A ordinary shares subsequent to such transaction. In addition, other minority shareholders may subsequently combine their holdings resulting in a single person or group obtaining a larger portion the company’s shares than we
initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain control of the target business.
Our sponsor controls a substantial interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not
support.
Our sponsor owns, on an as-converted basis, 95% of our issued and outstanding ordinary shares. Accordingly, it may exert a substantial influence on actions requiring a shareholder vote, potentially
in a manner that you do not support, including amendments to our Articles. If our sponsor purchases any units in this offering or if our sponsor purchases any additional Class A ordinary shares in the aftermarket or in privately negotiated
transactions, this would increase its control. Neither our sponsor nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in our IPO prospectus. Factors that
would be considered in making such additional purchases would include consideration of the current trading price of our Class A ordinary shares. In addition, our board of directors, whose members were elected by our sponsor, is and will be divided
into three classes, each of which will generally serve for a term of three years with only one class of directors being appointed in each year. We may not hold an annual general meeting to appoint new directors prior to the completion of our
initial business combination, in which case all of the current directors will continue in office until at least the completion of the business combination. If there is an annual general meeting, as a consequence of our “staggered” board of
directors, only a minority of the board of directors will be considered for election. Accordingly, our sponsor will continue to exert control at least until the completion of our initial business combination. In addition, we have agreed not to
enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor.
After our initial business combination, it is possible that a majority of our officers and directors will live outside the United States and all of our assets will be located
outside the United States. Therefore, investors may not be able to enforce federal securities laws or their other legal rights.
It is possible that after our initial business combination, a majority of our officers and directors will reside outside of the United States and all of our assets will be located outside of the
United States. As a result, it may be difficult, or in some cases not possible, for investors in the United States to enforce their legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United
States courts predicated upon civil liabilities and criminal penalties on our officers and directors under United States laws.
We are dependent upon our executive officers and directors and their loss could adversely affect our ability to operate.
Our operations are dependent upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the continued service of
our officers and directors, at least until we have completed our initial business combination. In addition, our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have
conflicts of interest in allocating their time among various business activities, including identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on
the life of, any of our directors or executive officers.
The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.
Risks Associated with Acquiring and Operating a Business in Foreign Countries
If we pursue a target company with operations or opportunities outside of the United States, including in Latin America, for our initial business combination, we may face
additional burdens in connection with investigating, agreeing to and completing such initial business combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact
our operations.
If we pursue a target company with operations or opportunities outside of the United States, including in Latin America, for our initial business combination, we would be subject to risks
associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any
local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting,
including in Latin America, including any of the following:
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costs and difficulties inherent in managing cross-border business operations;
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rules and regulations regarding currency redemption;
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complex withholding tax laws, including those relating to distributions or other payments;
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laws governing the manner in which future business combinations may be effected;
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exchange listing and/or delisting requirements;
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tariffs and trade barriers;
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regulations related to customs and import/export matters;
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local or regional economic policies and market conditions;
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unexpected changes in regulatory requirements;
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tax issues, such as tax law changes and variations in tax laws as compared to the United States;
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currency fluctuations and exchange controls;
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challenges in collecting accounts receivable;
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cultural and language differences;
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employment regulations;
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underdeveloped or unpredictable legal or regulatory systems;
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protection of intellectual property;
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social unrest, crime, strikes, riots and civil disturbances;
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regime changes and political upheaval;
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terrorist attacks, natural disasters and wars; and
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deterioration of political relations with the United States.
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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 initial business combination, or, if we complete such combination, our
operations might suffer, either of which may adversely impact our business, financial condition and results of operations.
If we were considered to be a “foreign person,” we might not be able to complete an initial business combination with a U.S. target company if such initial
business combination is subject to U.S. foreign investment regulations or review by a U.S. government entity, such as the Committee on Foreign Investment in the United States (“CFIUS”).
Our sponsor, Rose Hill Sponsor LLC, a Delaware limited liability company, is controlled by or has substantial ties with non-U.S. persons. Acquisitions and investments by non-U.S. persons in certain
U.S. businesses may be subject to rules or regulations that limit foreign ownership. CFIUS is an interagency committee authorized to review certain transactions involving investments by foreign persons in U.S. businesses that have a nexus to
critical technologies, critical infrastructure and/or sensitive personal data in order to determine the effect of such transactions on the national security of the United States. Were we or our sponsor considered to be a “foreign person” under such
rules and regulations, any proposed business combination between us and a U.S. business engaged in a regulated industry or which may affect national security could be subject to such foreign ownership restrictions, CFIUS review and/or mandatory
filings. For example, CFIUS could decide to block or delay our initial business combination, impose conditions to mitigate national security concerns with respect to such initial business combination or order us to divest all or a portion of a U.S.
business of the combined company if we had proceeded without first obtaining CFIUS clearance.
While we do not believe the Business Combination with Prize is subject to CFIUS review, if the Business Combination falls within the scope of applicable foreign ownership restrictions, we may be
unable to consummate the Business Combination or we may be required to make a mandatory filing or determine to submit a voluntary notice to CFIUS, or to proceed with the Business Combination without notifying CFIUS and risk CFIUS intervention,
before or after closing the Business Combination. If we were to seek an initial business combination other than the Business Combination, the potential limitations and risks may limit the attractiveness of a transaction with us or prevent us from
pursuing certain initial business combination opportunities that we believe would otherwise be beneficial to us and our shareholders. As a result, the pool of potential targets with which we could complete an initial business combination may be
limited and we may be adversely affected in terms of competing with other SPACs which do not have similar foreign ownership issues. Moreover, the process of any government review, whether by CFIUS or otherwise, could be lengthy, which could delay
our ability to close our initial business combination within the requisite time period, which means we may be required to liquidate.
If we liquidate, our public shareholders may only receive their pro rata share of amounts held in the Trust Account, and our warrants will expire worthless. This will also cause you to lose any
potential investment opportunity in a target company and the chance of realizing future gains on your investment through any price appreciation in the combined company.
If our management following our initial business combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with
such laws, which could lead to various regulatory issues.
Following our initial business combination, our management may resign from their positions as officers or directors of the company and the management of the target business at the time of the
business combination will remain in place. Management of the target business may not be familiar with United States securities laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources
becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.
After our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our
operations in any such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and social conditions and government policies, developments and conditions in the country in
which we operate.
The economic, political and social conditions, as well as government policies, of the country in which our operations are located could affect our business. Economic growth could be uneven, both
geographically and among various sectors of the economy and such growth may not be sustained in the future. If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for
spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find an attractive target business with which to consummate our initial business combination and if we
effect our initial business combination, the ability of that target business to become profitable.
Exchange rate fluctuations and currency policies may cause a target business’ ability to succeed in the international markets to be diminished.
In the event we acquire a non-U.S. target, all revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and distributions, if any, could be
adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions fluctuate and are affected by, among other things, changes in political and economic conditions. Any change in the relative value
of such currency against our reporting currency may affect the attractiveness of any target business or, following the consummation of our initial business combination, our financial condition and results of operations. Additionally, if a currency
appreciates in value against the dollar prior to the consummation of our initial business combination, the cost of a target business as measured in dollars will increase, which may make it less likely that we are able to consummate such
transaction.
We may reincorporate in another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material
agreements and we may not be able to enforce our legal rights.
In connection with our initial business combination, we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine to do this, the laws of
such jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The
inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital.
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our
initial business combination, and results of operations.
We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance
with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material
adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to
negotiate and complete our initial business combination, and results of operations.
Risks Related to Rose Hill and the Business Combination
Each of Rose Hill and Prize will incur significant transaction costs in connection with the Business Combination.
Each of Rose Hill and Prize has incurred and expects that it will incur significant, non-recurring costs in connection with consummating the Business Combination. Rose Hill may also incur
additional costs to retain key employees of Prize. Rose Hill and Prize will also incur significant legal, financial advisor, accounting, banking and consulting fees, fees relating to regulatory filings and notices, SEC filing fees, printing and
mailing fees and other costs associated with the Business Combination.
The Business Combination may not be completed in a timely manner, or at all, which may adversely affect the price of our ordinary shares.
The consummation of the Business Combination is subject to the satisfaction (or, if applicable, valid waiver) of various conditions, including (a) approval of the Business Combination by our
shareholders and Prize’s administrator, (b) the absence of any legal restraint (including legal actions or proceedings pursued by U.S. state authorities in the relevant states) preventing the consummation of the transactions and receipt of certain
governmental and regulatory approvals, (c) the satisfaction of minimum cash conditions following redemptions by our public shareholders, (d) the effectiveness of this registration statement, (e) the delivery by each party to the other party of a
certificate with respect to (i) the truth and accuracy of such party’s representations and warranties as of the execution of the Business Combination Agreement and as of the Closing and (ii) the performance by such party of covenants contained in
the Business Combination Agreement and (f) other customary closing conditions. There is no guarantee that these conditions will be satisfied (or, if applicable, validly waived) in a timely manner or at all, in which case closing of the transactions
may be delayed or may not occur and the benefits expected to result from the transactions may not be achieved.
If the conditions to closing the Business Combination are not completed for any reason, the price of our ordinary shares may decline to the extent that the market price of such shares reflects or
previously reflected positive market assumptions that the Business Combination would be completed, and the related benefits would be realized. As a result of the conditions to closing of the Business Combination, some of which are dependent upon
the actions of third parties, the parties cannot provide any assurance that the Business Combination will be consummated in a timely manner or at all.
Rose Hill or Prize may waive one or more of the conditions to the Business Combination.
Rose Hill or Prize may agree to waive, in whole or in part, some of the conditions to its obligations to complete the Business Combination, to the extent permitted by the Existing Governing
Documents and Prize’s certificate of incorporation. For example, it is a condition to Rose Hill’s obligations to close the Business Combination that certain of Prize’s representations and warranties are true and correct in all respects as of the
Closing, except where the failure of such representations and warranties to be true and correct, taken as a whole, does not result in a material adverse effect. However, if Rose Hill’s Board determines that it is in Rose Hill Shareholders’ best
interest to waive any such breach, then Rose Hill’s Board may elect to waive that condition and consummate the Business Combination.
Notwithstanding the foregoing, certain closing conditions may not be waived due to the parties’ organizational documents, applicable law, or otherwise. The following closing conditions may not be
waived: receipt of the requisite shareholder approvals, the registration statement having been declared effective and the absence of any law or order that would prohibit the consummation of the Business Combination. The foregoing closing conditions
are the only closing conditions to the Business Combination that may not be waived. All other closing conditions to the Business Combination may be waived by Rose Hill or Prize.
If we are unable to complete a PIPE, we may not be able to meet the closing conditions of the Business Combination Agreement or the post-combination business may be
undercapitalized following the Business Combination.
If we are unable to complete a PIPE at a sufficient level of investment, we may not have sufficient net tangible assets or sufficient cash on hand to satisfy the conditions to consummate the
Business Combination. Even if we can satisfy such conditions, we may not be sufficiently capitalized to execute on its post-combination business plan. The obligation of investors in a PIPE will be subject to conditions which, if not satisfied, will
allow the investors to decline to participate in the PIPE. These conditions may depend on matters which fluctuate based on market conditions, including the trading price of our ordinary shares, or other matters which are not under our control.
Certain of the closing conditions to the Business Combination Agreement and the PIPE may be waived by the parties, but there can be no assurance that such a waiver will occur. If the Business Combination does not close as a result of unmet closing
conditions, we may have to liquidate without completing our initial business combination. If the Business Combination is consummated, but PubCo is undercapitalized, our business, financial condition and results of operations may be adversely
affected, reducing shareholders’ return on their investment.
We may need to obtain additional financing to satisfy the closing condition in the Business Combination Agreement to have the minimum cash requirements after giving effect to the payment of Rose
Hill’s and Prize’s expenses in connection with the Business Combination and the completion and payment of Rose Hill’s obligation to redeem a significant number of its ordinary shares in connection with the consummation of the Business Combination.
Rose Hill currently intends to address the need for additional financing through a PIPE investment; however, Rose Hill has currently not completed a PIPE investment, and there can be no assurance that it will raise any or sufficient funds in any
PIPE investment. Rose Hill will only complete any PIPE investment simultaneously with the completion of the Business Combination. If Rose Hill is unable to complete a PIPE investment or to raise sufficient funds in any PIPE investment, it could
seek to borrow the necessary funds; however, there can be no assurance that we will be able to borrow sufficient funds or any funds. If we are unable to complete the Business Combination because we do not have sufficient available funds, we will be
forced to cease operations and liquidate the Trust Account. In addition, following the consummation of the Business Combination, if PubCo’s cash on hand is insufficient PubCo may need to obtain additional financing in order to meet its obligations
or to expand its business sufficiently or at all.
There is no assurance that a shareholder’s decision whether to redeem its share for a pro rata portion of the Trust Account will put the shareholder in a better future economic
position.
No assurance can be given as to the price at which a shareholder may be able to sell his, her or its public shares in the future following the completion of the Business Combination. Certain events
following the consummation of any business combination, including the Business Combination, may cause an increase in our share price, and may result in a lower value realized now than a public shareholder might realize in the future had the
shareholder not elected to redeem such shareholder’s public shares. Similarly, if a public shareholder does not redeem his, her or its public shares, such shareholder will bear the risk of ownership of PubCo ordinary shares after the consummation
of the Business Combination, and there can be no assurance that a shareholder can sell his, her or its shares in the future for a greater amount than the redemption price set forth in a proxy statement/prospectus. Our shareholders should consult
his, her or its own tax and/or financial advisors for assistance on how this may affect his, her or its individual situation.
The consummation of the Business Combination may be materially adversely affected by any negative impact on the global economy, financial markets or otherwise resulting from the
conflict in Ukraine or any other geopolitical tensions.
Global and regional markets, including in the United States and Chile, are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military
conflict between Russia and Ukraine. On February 24, 2022, a full-scale military invasion of Ukraine by Russian troops was reported. Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine
could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets.
Additionally, Russia’s prior annexation of Crimea, recent recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military interventions in Ukraine have
led to sanctions and other penalties being levied by the United States, European Union and several other countries against Russia, Belarus, the Crimea Region of Ukraine, the so- called Donetsk People’s Republic, and the so-called Luhansk People’s
Republic, including agreement to remove certain Russian financial institutions from the Society for Worldwide Interbank Financial Telecommunication payment system. Additional potential sanctions and penalties have also been proposed and/or
threatened. In addition, in response to Russia’s recent invasion of Ukraine, the North Atlantic Treaty Organization deployed additional military forces to eastern Europe. Although the length and impact of the ongoing military conflict in Ukraine is
highly unpredictable, the conflict could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions.
Additionally, Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets,
particularly if current or new sanctions continue for an extended period of time or if geopolitical tensions result in expanded military operations on a global scale. In addition, the recent military conflict between Russian and Ukraine, and the
impact of sanctions against Russia and the potential for retaliatory acts from Russia, could result in increased cyberattacks.
Our ability to consummate the Business Combination, is subject to the satisfaction a minimum cash condition, which, if Prize does not waive such condition, will be dependent on the ability to raise
equity and debt financing. The ability to raise equity and debt financing may be impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine, 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.
The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions may also magnify the impact of
other risks described in this Annual Report.
There can be no assurance that the PubCo ordinary shares will be approved for listing on the Nasdaq or that PubCo will be able to comply with the continued listing standards of
Nasdaq.
Rose Hill and Prize will apply to have the PubCo ordinary shares listed on Nasdaq, which will be subject to official notice of issuance, and expect that the PubCo ordinary shares will begin trading
on Nasdaq immediately following the consummation of the Business Combination. Although following the consummation of the Business Combination PubCo expects to meet the minimum initial listing standards set forth in Nasdaq listing standards, it
cannot assure you that the PubCo ordinary shares will be, or will continue to be, listed on Nasdaq in the future. In order to maintain such a listing, PubCo must satisfy minimum financial and other continued listing requirements and standards,
including those regarding director independence and independent committee requirements, minimum shareholders’ equity, minimum share price, and certain corporate governance requirements. PubCo may not be able to comply with the applicable listing
standards and Nasdaq could delist their securities as a result.
We cannot assure you that the PubCo ordinary shares, if delisted from Nasdaq, will be listed on another national securities exchange. If the PubCo ordinary shares are delisted by Nasdaq, the PubCo
ordinary shares would likely trade on the OTC Bulletin Board or another over-the-counter market where an investor may find it more difficult to sell the securities or obtain accurate quotations as to the market value of such securities.
Rose Hill Shareholders will experience immediate dilution as a consequence of the issuance of PubCo ordinary shares as consideration in the Business Combination and due to
future issuances pursuant to PubCo’s employee incentive plan(s) or at-the-market issuances.
Our shareholders who do not redeem their shares will experience immediate dilution as a consequence of the issuance of PubCo ordinary shares as consideration in the Business Combination and may
experience dilution from several additional sources to varying degrees in connection with and after the Business Combination, including the following:
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PubCo ordinary shares issued to PIPE investors pursuant to a PIPE investment;
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PubCo ordinary shares granted pursuant to PubCo’s employee incentive plan(s);
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Pubco ordinary shares issued pursuant to an at-the-market issuance; and
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PubCo’s obligation to issue Earn-Out Shares to Prize of PubCo upon the achievement by PubCo of certain financial and share price milestones.
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Failure to realize the anticipated benefits of the Business Combination.
The future success of PubCo following the consummation of the Business Combination, including anticipated benefits, depends, in part, on PubCo’s ability to optimize their operations as a public
company. The optimization of PubCo’s operations following the Business Combination will be a complex, costly and time-consuming process and if PubCo experiences difficulties in this process, the anticipated benefits may not be realized fully or at
all, or may take longer to realize than expected, which could have an adverse effect on PubCo for an undetermined period. There can be no assurances that PubCo will realize the potential operating efficiencies, synergies and other benefits
currently anticipated from the Business Combination.
Some of the factors involved in this are outside of PubCo’s control, and any one of them could result in delays, increased costs, decreases in the amount of potential revenues, potential cost
savings, and diversion of management’s time and energy, which could materially affect PubCo’s business, financial condition and results of operations.
Future sales of PubCo ordinary shares after the consummation of the Business Combination may cause the market for the PubCo ordinary shares to drop significantly, even if its
business is doing well.
Pursuant to the Registration Rights and Lock-Up Agreement, after the consummation of the Business Combination and subject to certain exceptions, the Sponsor, certain of our officers, certain of
Prize’s officers and certain of our shareholders will be contractually restricted from selling or transferring any of their lock-up shares during the lock-up period. However, following the expiration of such lock-up period, the Sponsor, certain of
our officers, certain of Prize’s officers and certain of our shareholders will not be restricted from selling PubCo ordinary shares held by them, other than by applicable securities laws. Additionally, the PIPE investors will not be restricted from
selling any of their PubCo ordinary shares following the consummation of the Business Combination, other than by applicable securities laws. As such, sales of a substantial number of PubCo ordinary shares in the public market could occur at any
time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of the PubCo ordinary shares.
The shares held by Sponsor, certain of Prize’s officers, certain of our officers and certain of our shareholders may be sold after the expiration of the applicable lock-up period under the
Registration Rights and Lock-Up Agreement. As restrictions on resale end and registration statements (filed after the consummation of the Business Combination to provide for the resale of such shares from time to time) are available for use, the
sale or possibility of sale of these shares could have the effect of increasing the volatility in PubCo’s share price or the market price of the PubCo ordinary shares could decline if the holders of currently restricted shares sell them or are
perceived by the market as intending to sell them.
Litigation or legal proceedings could expose any of Rose Hill, Prize and, following the consummation of the Business Combination, PubCo, to significant liabilities and have a
negative impact on Rose Hill’s, Prize’s or PubCo’s respective reputations or business, as applicable.
Each of Rose Hill, Prize and, following the consummation of the Business Combination, PubCo, may become subject to claims, litigation, disputes and other legal proceedings from time to time. Rose
Hill, Prize and PubCo, as the case may be, shall evaluate these claims, litigation, disputes and other legal proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, the amount of potential losses. Based on these
assessments and estimates, Rose Hill, Prize and, following the consummation of the Business Combination, PubCo may establish reserves, as appropriate. These assessments and estimates are based on the information available to each management team at
the time of its respective assessment and involve a significant amount of management judgment. Actual outcomes or losses may differ materially from the assessments and estimates.
Under the terms of the underwriting agreement of the IPO, Rose Hill agreed to indemnify and hold harmless Continental Stock Transfer & Trust Company, its directors, officers, employees,
affiliates and agents, and each person who controls Continental Stock Transfer & Trust Company, from and against certain losses and claims arising in connection with certain services provided to Rose Hill thereunder. Accordingly, if any claims,
litigation, disputes or other legal proceedings are brought by third parties against the agreement with Continental Stock Transfer & Trust Company, then Rose Hill may be liable to pay for or reimburse Continental Stock Transfer & Trust
Company for the losses and costs they incur, subject to certain exceptions.
If such losses and claims are brought following the consummation of the Business Combination, then PubCo may be exposed to similar liabilities and negative impact. Even when not merited or whether
or not Rose Hill, Prize or PubCo, as applicable, ultimately prevails, the defense of these lawsuits may divert management’s attention, and Rose Hill, Prize or PubCo, as applicable, may incur significant expenses in defending these lawsuits. The
results of litigation and other legal proceedings are inherently uncertain, and adverse judgments or settlements in some of these legal disputes may result in adverse monetary damages, penalties or injunctive relief against any of Rose Hill, Prize,
and, following the consummation of the Business Combination, PubCo, which could negatively impact any their respective financial positions, cash flows or results of operations. An unfavorable outcome of any legal dispute following the consummation
of the Business Combination could imply that PubCo becomes liable for damages or may have to modify its business model. Further, any liability or negligence claim against PubCo in US courts may, if successful, result in damages being awarded that
contain punitive elements and therefore may significantly exceed the loss or damage suffered by the successful claimant. Any claims or litigation, even if fully indemnified or insured, could damage the reputation of Rose Hill, Prize or PubCo, as
applicable, and make it more difficult to compete effectively or to obtain adequate insurance in the future. A settlement or an unfavorable outcome in a legal dispute could have an adverse effect on PubCo’s business, financial condition, results of
operations, cash flows and/or prospects.
Furthermore, while Rose Hill and Prize maintain and, following the consummation of the Business Combination, PubCo will maintain, insurance for certain potential liabilities, such insurance does
not cover all types and amounts of potential liabilities and is subject to various exclusions as well as caps on amounts recoverable. Even if Rose Hill, Prize or PubCo, as applicable, believes a claim is covered by insurance, insurers may dispute
its entitlement to recovery for a variety of potential reasons, which may affect the timing and, if the insurers prevail, the amount of recovery.
We may be the target of securities class action and derivative lawsuits which could result in substantial costs and may delay or prevent the Business Combination from being
completed.
Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger or business combination agreements. Even if the lawsuits are
without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on Rose Hill’s or Prize’s liquidity and
financial condition. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Business Combination, then that injunction may delay or prevent the Business Combination from being completed, which may
adversely affect Prize’s or, if the Business Combination is completed but delayed, PubCo’s business, financial position and results of operations. Rose Hill, Prize and PubCo cannot predict whether any such lawsuits will be filed.
We may be, or PubCo may become a PFIC, which could result in adverse U.S. federal income tax consequences to U.S. Holders.
If PubCo is treated as a PFIC for any taxable year, or portion thereof, that is included in the holding period of a “U.S. Holder” of PubCo ordinary shares, such U.S. Holder may be subject to
certain adverse U.S. federal income tax consequences and may be subject to additional reporting requirements. U.S. Holder, as used herein, means a beneficial owner of our Class A ordinary shares, public warrants or securities of PubCo, as the case
may be, who or that is for U.S. federal income tax purposes, (i) a citizen or individual resident of the United States, (ii) a corporation (or other entity that is treated as a corporation for U.S. federal income tax purposes) created or organized
in or under the laws of the United States, any state therein or the District of Columbia; or (iii) an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source, of PubCo ordinary shares, such U.S.
Holder may be subject to certain adverse U.S. federal income tax consequences and may be subject to additional reporting requirements.
Based upon the composition of our income and assets and the anticipated date of closing of the Business Combination, we believe that we have been a PFIC since our first taxable year. Assuming the
First Merger qualifies as an F Reorganization, PubCo should be treated as the same corporation as us for purposes of the PFIC rules. PubCo’s PFIC status for its taxable year that includes the anticipated date of closing of the Business Combination,
or any future taxable year, is an annual determination that can be made only after the end of that year and will depend on the composition of PubCo’s income and assets and the value of its assets from time to time (including the value of its
goodwill, which may be determined by reference to the market price of PubCo ordinary shares from time to time). Accordingly, there can be no assurances regarding PubCo’s status as a PFIC for its taxable year that includes the anticipated closing
date of the Business Combination or any future taxable year.
If, as expected, Rose Hill does not qualify for the start-up exception and is determined to be a PFIC with respect to a U.S. Holder, and such U.S. Holder did not make either of the elections for
optional methods of taxation available for certain PFIC with respect to our Class A ordinary shares, then PubCo should also be treated as a PFIC as to such U.S. Holder with respect to such PubCo ordinary shares even if PubCo does not meet a test
for PFIC status in its own right, unless such U.S. Holder makes a purging election with respect to its shares.
U.S. Holders are urged to consult their tax advisors regarding the possible application of the PFIC rules to them.
General Risk Factors
Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and
deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or
confidential data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against, or to
investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss.
The SEC has issued proposed rules to regulate special purpose acquisition companies. Certain of the procedures that we, a potential business combination target, or others may determine to
undertake in connection with such proposals may increase our costs and the time needed to complete our initial business combination and may constrain the circumstances under which we could complete a business combination.
On March 30, 2022, the SEC issued the SPAC Rule Proposals, which include proposals relating to, among other items, disclosures in business combination transactions between SPACs such as us and private operating
companies; the condensed financial statement requirements applicable to transactions involving shell companies; the use of projections by SPACs in SEC filings in connection with proposed business combination transactions; the potential liability
of certain participants in proposed business combination transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act, including a proposed rule that would provide SPACs a safe harbor from
treatment as an investment company if they satisfy certain conditions that limit a SPAC’s duration, asset composition, business purpose and activities. Certain of the procedures that we, a potential business combination target, or others may
determine to undertake in connection with the SPAC Rule Proposals, or pursuant to the SEC’s views expressed in the SPAC Rule Proposals, may increase the costs and the time required to consummate a business combination, and may constrain the
circumstances under which we could complete a business combination.
We are subject to changing laws and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of
non-compliance.
We are subject to rules and regulations by various governing bodies, including, for example, the SEC, which is charged with the protection of investors and the oversight of companies whose
securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased general and
administrative expenses and a diversion of management time and attention from seeking a business combination target.
Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution
may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes,
we may be subject to penalty and our business may be harmed.
We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure
requirements available to “emerging growth companies” or “smaller reporting companies,” this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that
are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure
obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute
payments not previously approved. As a result, our shareholders may not have access to certain information they may deem important. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the
fifth anniversary of the completion of our IPO, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares
that are held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. 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 that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended
transition period difficult or impossible because of the potential differences in accounting standards used.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations,
including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates
exceeds $250 million as of the prior June 30 and (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30. To the
extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.